The countdown has started for Alaska Gov. Sarah Palin to convince state lawmakers that TransCanada's plan for a gas pipeline from the North Slope to the Lower 48 is the only way to go. Palin will have 60 days to convince the Legislature that TransCanada deserves to be awarded the license to build a pipeline that will travel 1,715 miles from the North Slope to a hub in Calgary and then to markets in the U.S. The cost of the project is now being tagged at between $26 billion and $30 billion. The North Slope is believed to contain, at least by very conservative estimates, as much as 35 trillion cubic feet of proved gas reserves. And just like anything these days, it's not that simple. BP and ConocoPhillips have teamed up and are moving forward with a project that actually lies outside the state's bid requirements. The flurry of activity followed the Alaskan Legislature passing the Alaska Gasline Inducement Act (AGIA) in 2007, a bill that calls for bidders to guarantee the pipeline will be built. Palin's choice was TransCanada and this week gave lawmakers more tan 2,000 pages that support the plan. Many lawmakers have expressed concern that the company can build the pipeline by itself and have openely questioned whether this was the best bid. "I welcome the scrutiny," Palin said. "But if any lawmakers have intentions of trying to shoot down AGIA for any illegitimate or political reason, they are not doing their job as a legislator." While Palin's team has been busy pitching the plan to state lawmakers before they begin their special session, a quick win i anything but assured. State Sen. Hollis French, a Democrat representing Anchorage, released a statement saying, "For us to do our job, we have to truth-test every single word in these 2,000 pages. We cant go to the Alaskan public 10 years from now if this deal goes sideways and say we voted fr this because Sarah Palin said so." Over the next 60 days, some of the key questions lawmakers will be asking are: -- Can the state afford to give the winning company $500 million in seed money. Some lawmakers have asked why the state should be giving money to a project that could reap huge windfalls for the company. -- Does TransCanada really have the financial muscle for the project? -- Should the Legislature take a closer look at the BP-ConocoPhillips project? French said the Legislature has a lot of work to do, hearing from the company, the governor and her team as well as listening to the public. No matter who gets the job to build the pipeline, they will be faced with the challenge of getting involved with what could be the single largest private-sector construction project ever started in North America. --John A. Sullivan, News Editor, Oil and Gas Investor, www.OilandGasInvestor.com, jsullivan@hartenergy.com
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