Walker fights to open gas pipeline files

  • Author: Richard Mauer
  • Updated: September 27, 2016
  • Published July 2, 2010

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Bill Walker, a Republican seeking to take Gov. Sean Parnell's job, is demanding the state provide details by August about who wants to ship gas through the proposed TransCanada pipeline, months before any final transportation agreements are reached.

State officials say they don't expect TransCanada to provide that information before year's end, long after the Republican primary in August. But even if the pipeline company gave the information to the state, they said they couldn't disclose it anyway.

Walker, an Anchorage lawyer, is a long-term advocate for an all-Alaska gas pipeline from the North Slope to a liquified natural gas plant in Valdez, with spurs to populated areas of the state. His campaign logo shows an Alaska image of blue bisected north-to-south by a pipeline of gold; his slogan is "All-Alaska Governor."

He strongly disagrees with the strategy of Parnell, and Gov. Sarah Palin before him, for bringing North Slope gas to market with a $500 million state subsidy on a line that may go to Canada. He says the state has given additional tax breaks to oil companies to keep the project alive.

Now, with the TransCanada project two-thirds through its "open season" in search of bidders to fill the line with gas, Walker says Alaskans shouldn't have to wait till December or January to learn what the bids are.

TransCanada and partner Exxon Corp. say they will build a pipeline to either TransCanada's hub in Alberta or to Valdez, depending on what the market demands. In the 90-day open season, which concludes at the end of July, they are taking secret bids from shippers, hoping to get enough orders to fill a pipeline and make its construction economically feasible despite a price tag as high as $41 billion.

Because bids are expected to contain conditions, the close of bidding at 5 p.m. Central time July 30 will start a protracted period of negotiations -- assuming any bids are received. TransCanada isn't required to disclose the bids until the negotiations are complete and a contract -- called a "precedent agreement" -- is filed with the Federal Energy Regulatory Commission. TransCanada's top Alaska pipeline official, Tony Palmer, has said that likely won't happen till after Christmas -- long after both the primary and general elections.

"I've had a lot of members of the public saying, 'We're going to go vote and not know if we just had an incredibly great open season or a complete failure?'" Walker said Friday. "I don't think I'm the only one out there saying, really? Why is this being confidential?"

Walker filed a public records request to the governor's office June 24 demanding the open season bids submitted to TransCanada or the state. His demand letter mistakenly refers in three places to federal law, the Freedom of Information Act, or "FOIA," as the basis for his request.

Bill McAllister, a spokesman for the Attorney General's office, said Parnell has until July 9 to respond. "There's nothing to say about it -- it is being processed, that's all," McAllister said.

But the administration's top gas line official expects Walker will get very little.

Mark Myers, gas pipeline coordinator in the Department of Natural Resources, said bids in large projects are normally closely held by bidders and the pipeline company as each seeks a competitive edge in negotiations.

"You're always trying to cut a better deal than the next party," Myers said.

Negotiating points could include ownership stakes in the pipeline, the level of debt required to build it, and how cost overruns would be paid -- all items that could effect future shipping rates.

While bidders are competing against each other and trying to get the best rates out of TransCanada, there's another wrinkle, Myers said: a competing project, Denali, by BP and Conoco Phillips. Denali begins its 90-day open season July 6, and TransCanada has a commercial interest in keeping bids secret from that pipeline project too, Myers said.

"Given those complications, my druthers would be to not know what the commercial processes were," Myers said.

Unlike Denali, TransCanada is a licensee of the state under the Alaska Gasline Inducement Act, or AGIA, which provides up to $500 million for costs and other incentives. AGIA, a centerpiece of Palin's administration and firmly backed by Parnell, specifically declares that trade secrets and proprietary information obtained by the state are not subject to disclosure under Alaska's public records law.

Myers said he didn't think the state would see the bids anyway until negotiations are complete, and so would not have bid documents to withhold from Walker. But he said TransCanada's Palmer has promised to issue a general statement about bids after the conclusion of open season, and will declare if no qualifying bids are received.

Walker said that's inappropriate.

"We've paid over $100 million for this -- we should see what the results are, and also the conditions," Walker said. "If we didn't have any public money in there, I wouldn't have much of an argument. When you take public funds, there's a certain obligation to the public to know what's going on."

Find Richard Mauer online at adn.com/contact/rmauer or call 257-4345.

By RICHARD MAUER

rmauer@adn.com