Anchorage Daily News

JUNEAU -- If TransCanada builds a North Slope natural gas pipeline, Exxon Mobil Corp. expects to own a share of the project.

The Texas oil giant said so in comments it submitted last week on TransCanada Corp.'s bid for an exclusive state license and $500 million in public money to help plan the pipeline.

State officials said they received more than 300 comments, including Exxon's, before a 60-day public comment period closed Thursday.

Exxon is the largest holder of North Slope natural gas, controlling more than 36 percent in the enormous Prudhoe Bay field. Bringing the gas to market would be a powerful business move for Exxon, boosting its daily worldwide gas production by 10 percent and nearly doubling its U.S. production, the company said.

While stopping short of asking state officials to reject TransCanada's bid, Exxon in a 14-page analysis faulted numerous aspects of the Calgary-based company's pipeline proposal.

TransCanada is the only bidder Gov. Sarah Palin is considering for the license, which requires the Legislature's approval.

One Exxon criticism is that TransCanada, which proposes a 1,715-mile, $26 billion pipeline down the Alaska Highway through Canada, is seeking too much profit, which could trim state gas tax and royalty collections by billions of dollars.

Another criticism is that TransCanada aims to funnel Alaska gas exclusively into its own Alberta pipeline network, Exxon said, preventing gas shippers from using pipes run by other companies.

In its proposal, TransCanada offers to share ownership of the North Slope pipeline with other companies, and Exxon "plans to be a co-owner," the company wrote.

Exxon said it expects to own a stake equal to its share of the gas moving through the huge pipeline.

Joe Balash, Palin's oil and gas adviser, said the state has hired a range of financial, legal and technical experts to review the public comments on TransCanada's proposal.

Palin and members of her gas team have said it's not a sure thing the administration will recommend TransCanada get the license. It's looking unlikely legislators will see any recommendation before adjourning April 13.

Exxon is among several commenters who insist the pipeline -- for decades an economic development dream of Alaska politicians and business leaders -- won't be built unless the state first negotiates a deal on how to tax Slope gas.

So far, Palin has shown little willingness to talk taxes with the three big companies controlling most of the gas -- Exxon, Conoco Phillips and BP.

Here's what some other commenters said:

• Conoco joined Exxon and BP in warning that TransCanada's "withdrawn partners" liability could doom its pipeline project.

The liability stems from an old partnership involving TransCanada. The partnership spent hundreds of millions of dollars pursing a pipeline before stopping work in the early 1980s. The partnership agreement calls for former partners to get back their investments with interest if a pipeline starts up, and the tally now stands at about $9 billion.

TransCanada contends the liability issue isn't a big worry.

Conoco also vowed to start fieldwork in June for its own gas pipeline, which stands as a competitor to TransCanada's proposal. Conoco, however, isn't seeking the state license or seed money.

• BP wrote that awarding TransCanada the license "would significantly delay, and possibly prevent, a successful gas pipeline project from moving forward." The company noted that TransCanada itself has urged the state to reach a tax deal with the oil companies holding the gas.

• Houston-based Anadarko Petroleum Corp., a North Slope explorer and partner with Conoco in the large Alpine oil field, said it has some concerns but "fully supports TransCanada's application in principle."

Anadarko said TransCanada is seeking what could be "extraordinary" profits on the pipeline, meaning higher shipping rates that could discourage drillers from finding and developing new gas supplies.

However, TransCanada's rate estimate is "considerably lower" than what Conoco has proposed, Anadarko said.

• The Resource Development Council for Alaska, a trade association for the oil, mining, fishing, forest and tourism industries, said the Palin administration is being "inconsistent" in creating an imaginary or "straw man" liquefied natural gas project to compare against TransCanada's project, while shunning Conoco's pipeline proposal.

TransCanada is a member of the council.

• Marc Langland, president of Anchorage-based Northrim Bank, urged the state not to give TransCanada the license, saying the company controls no gas and is depending too heavily on state subsidies for a plan that could cost the state years of delay.

Conoco's pipeline proposal "is superior in many ways," Langland said.

State officials plan to post all the public comments online by Friday at www.gov.state.ak.us/agia.

Find Wesley Loy online at adn.com/contact/wloy or call him in Juneau at 1-907-586-1531.