- The Washington Times - Sunday, March 15, 2009

FAIRBANKS, ALASKA (AP) - Two Republican lawmakers want Gov. Sarah Palin to review a state license awarded to TransCanada Corp. for a natural gas pipeline.

Reps. Jay Ramras and Craig Johnson said the global recession and the availability of potentially cheap U.S. gas have changed the project’s dynamics.

A $500,000 state investment under the Alaska Gasline Inducement Act is no longer sound, Ramras said.

“There have been significant changes in the larger, global marketplace,” Ramras said. “In the private sector, you review your business plan. Only government can put itself on autopilot.”

Ramras and Johnson on Thursday filed a House Concurrent Resolution that calls on Palin and the Alaska attorney general to review the license issued to TransCanada. HCR 12 also states that Alaskans need North Slope gas within the state in advance of a large-diameter pipeline and notes that Alaska Gasline Inducement Act prohibits the state from offering certain aid to a competing project.

“It is very reasonable. It is not incendiary. It’s an exercise of the fiduciary responsibility of the state, because the state has $500 million at risk,” Ramras said.

Palin while campaigning in 2008 for the vice presidency touted her work in advancing a $40 billion, large-diameter natural gas pipeline between Alaska’s North Slope and markets in Alberta, Canada, and the Lower 48.

TransCanada was awarded the state license and $500 million in December.

Not everyone is buying the argument that the arrangement with TransCanada is flawed.

“The Democrats in general are very worried that this resolution will set the gas line back,” said Rep. Les Gara, a Democrat. “What this resolution wants us to do is welch out on a contract to build the largest project in North America. You can’t behave like that and be viewed as a serious gas line partner.”

Administration officials said the state’s investment in AGIA is solid.

Ramras has promoted development of an in-state bullet line between the North Slope and southcentral Alaska as proposed by gas utility Enstar.

Joe Balash, special assistant to Palin, said the administration will testify on the bill when it comes before the House Energy Committee.

“This isn’t new information,” he said. “These questions were asked of the governor and (TransCanada CEO) Hal Kvisle in December when the AGIA license was signed.”

He acknowledged market troubles but said project financing will not be a serious consideration for several years.

“There is plenty of time for the markets to recover and get back to some semblance of normalcy,” Balash said. “We do need to keep an eye on what kind of dynamics are at play in the North American gas market, but there is no need to panic at every price fluctuation.”

State Revenue Commissioner Pat Galvin told a Senate committee last week that the administration believes the gas pipeline is still a viable project.

Pipeline economics, he said, are driven by what might happen in the market 10 or more years down the road, not now. Development of shale gas and liquefied natural gas facilities, as well as the credit crunch, are short-term issues, he told the committee.

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Information from: Fairbanks Daily News-Miner, http://www.newsminer.com

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