Anchorage Daily News

While the state Legislature is in special session to decide whether to give TransCanada Corp. a license for a gas pipeline, two former governors are arguing doing so would be a big mistake.

Former Gov. Tony Knowles wants legislators to postpone the decision and have TransCanada negotiate with the oil companies that have their own pipeline project. Former Gov. Wally Hickel, meanwhile, is calling for the Legislature to reject the proposed license for TransCanada. He wants the state to build its own "all-Alaska" natural gas pipeline from the North Slope to Valdez.

Gov. Sarah Palin wants to give TransCanada the license and a $500 million subsidy to pursue construction of the gas pipeline. Palin has said it is far more likely to be successful and lucrative than a standalone all-Alaska option.

But Hickel argues this is too important to be left in the hands of the Canadians.

"Why turn over control of a resource this valuable to a foreign country?" Hickel said in a written statement Thursday. "If TransCanada gets the license, they and their government will determine when it will be built, who gets the jobs, how much it will be taxed ... and how our gas will be used."

Hickel was co-chair of Palin's 2006 campaign for governor and said it's nothing personal.

"I admire Sarah. She is a caring leader and has done a great job. But on this issue, her advisors have taken her down the wrong road," Hickel said. "It's up to the Legislature to save her, save Alaska and save themselves from the worst decision of the 21st century."

Palin also says the TransCanada plan is better than the competing "Denali" project the oil companies BP and Conoco Phillips are working on. Palin argues the TransCanada proposal includes guarantees that benefit the state -- such as shipping rates and timelines -- and doesn't leave Alaska at the mercy of the oil companies and what she expects will be their demands for tax breaks.

But BP and Conoco, unlike TransCanada, hold leases to the North Slope gas that is needed for the pipeline and aren't asking for a $500 million subsidy. Knowles said what's needed is for the companies and TransCanada to unite in a single project.

That's what the state should focus on, he said, rather than committing to TransCanada.

"Let's start the negotiation now with all the parties. All the Legislature would have to do is put (the license decision) on hold, 90 days, 120 days, into next session," Knowles said Thursday at a Resource Development Council lunch. "Put it on hold and let's see how serious the parties are ... we'll save $500 million in the process."

Find Sean Cockerham online at adn.com/contact/scockerham or call him at 257-4344.

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