Anchorage Daily News

A state senator is calling for a timeout in the natural gas pipeline debate, proposing the Legislature bring in an East Coast mediator to try to work out a "creative alternative."Sen. Lesil McGuire, R-Anchorage, said all the parties pursuing a pipeline - the state, a Canadian energy company and the major oil companies controlling the North Slope gas - need to come together and talk.

McGuire said she'd like to see the mediation happen before state lawmakers vote on whether to award an exclusive state license and up to $500 million in incentive dollars to TransCanada Corp., which is proposing a 1,715-mile pipeline from the North Slope gas fields to Alberta.

Giving the exclusive license could box in the state and lead to lawsuits or other conflict, further delaying the state's long-frustrated economic development dream, McGuire said.

Confidential mediation might help all the players find a unified path without a $500 million state outlay, she said, adding many lawmakers are uncomfortable with the coming vote on the TransCanada license.

"I know my colleagues, and I can feel the unease in the room," she said.

By law, legislators must vote on the TransCanada license by Aug. 2.

A top member of Gov. Sarah Palin's gas team, which is touting the TransCanada license as the best way to get a gas line, said he doesn't favor McGuire's idea.

"The Legislature has to vote the license up or down," said Pat Galvin, state revenue commissioner under Palin. "We see no value in a closed-door, private negotiation."

Only after a vote will the state's position be clear, and a few days of mediation would be unlikely to yield a deal among the administration, lawmakers, pipeline builders and oil companies BP, Conoco Phillips and Exxon Mobil, Galvin said.

Palin called lawmakers into special session beginning June 3 to consider whether to award the license and seed money to TransCanada.

Since then, legislators have been holding hearings in Juneau and elsewhere around the state. They've been meeting all this week in Anchorage, and will continue from 9 a.m. to 5 p.m. today at the Howard Johnson hotel downtown.

On Thursday, McGuire said she would ask Senate and House leaders to hire a mediator from the Consensus Building Institute, a nonprofit organization based in Cambridge, Mass. It was founded by a professor at the Massachusetts Institute of Technology.

Awarding an exclusive license gives the impression that the state isn't open to any other options for a pipeline, McGuire said.

By gathering all the parties around the table with a mediator, "we hit the pause button" and maybe find an agreement, she said.

But the Palin administration and other lawmakers say nothing about the proposed TransCanada license blocks the oil companies or anyone else from pursuing a pipeline.

And they say the state, by granting the $500 million, gains firm commitments from TransCanada to try to line up the customers, financing and regulatory approval for a megaproject that could cost $30 billion.

The oil companies, who hold the gas, are skeptical of a state license for TransCanada, and two of them - BP and Conoco - are vowing to build a pipeline themselves.

Rep. Les Gara, D-Anchorage, opposes McGuire's mediation idea.

He said he hopes lawmakers aren't "naive" enough to believe that the oil companies will "sit down and be nice to us just because there's a mediator at the table."

Find Wesley Loy online at adn.com/contact/wloy or call 257-4590.

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