Anchorage Daily News

JUNEAU -- A top adviser told Alaska legislators Thursday he sees no major reason why they shouldn't vote to award a state license and half a billion dollars in seed money to a potential natural gas pipeline builder.

Dan Dickinson, a former state tax director, told lawmakers that supporting the license and cash for TransCanada Corp. "probably won't harm the prospects for a line and may strengthen them."

Dickinson's comments came on the third day of a special legislative session Gov. Sarah Palin called on the gas line. The governor and her own advisers believe that awarding the license and money could spur TransCanada to build an elusive project that could shower the state with jobs and billions of dollars in tax collections.

TransCanada is a Calgary-based energy company with pipelines and power plants across the continent.

The company bid for the exclusive state license and $500 million after Palin invited companies to submit pipeline proposals. The incentives were offered under a law the Legislature passed last year at Palin's behest, the Alaska Gasline Inducement Act or AGIA.

TransCanada's proposed 1,715-mile pipeline down the Alaska Highway from the North Slope gas fields to Alberta isn't the only proposed pipeline project out there.

Two oil companies that control much of the gas but didn't bid under AGIA, Conoco Phillips and BP, say they're pursuing their own gas line project.

Dickinson, an accountant, is familiar to many legislators.

A couple of years ago, he was a top consultant to Palin's predecessor, Gov. Frank Murkowski, on a proposed tax contract between the state and the oil companies that Murkowski believed would lead them to build the gas line.

But many lawmakers believed the contract made too many concessions to the oil companies and the contract never came to a vote in the Legislature.

Dickinson, now working as a legislative consultant, said awarding a license to TransCanada could help maintain competition for a gas line. And contributing $500 million toward pipeline planning seems a reasonable gamble given that the state is now flush with surplus oil dollars, he said.

But he cautioned that licensing TransCanada doesn't assure a pipeline will be built.

Many major engineering, financing and regulatory steps remain, Dickinson said. He likened awarding the license to a football play that gains a few yards, not a touchdown.

The contract the Murkowski administration negotiated with the oil companies also wasn't a touchdown, Dickinson said.

Lawmakers are listening to hours of highly technical analysis, much of which shows that a gas line has potential to enrich both the state and industry, assuming key assumptions such as a rising price for natural gas prove out.

Alaska already has raked in many billions of dollars thanks to its famous oil pipeline, which began carrying oil from the huge Prudhoe Bay field in 1977.

Many expected a second pipeline to carry the North Slope's extraordinary gas reserves would soon follow. Instead, Alaska political leaders have been frustrated for decades that the oil companies -- or some other company such as TransCanada -- haven't build it yet.

Big reasons for that include the project's daunting scale, enormous cost -- perhaps $30 billion or more -- and extreme business risk.

Sen. Fred Dyson, R-Eagle River, said he was pleased with Dickinson's views. He said Dickinson has a lot of involvement in the gas line game, much of which Dyson believes is raging out of the public eye in corporate boardrooms.

"We're early in the first rounds of a very big poker game," Dyson said. "People are playing bluffs and trying to psych each other out."

From the state perspective, it's best to encourage competing pipeline proposals, he said.

But some legislators remain skeptical about the state licensing TransCanada and giving it the $500 million.

Hearings are to continue today. House Speaker John Harris said he believes lawmakers will be ready to vote on the TransCanada matter sometime next month.

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

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