Fate of Alaska gas pipeline with state Senate

On Wednesday, the Alaska House of Representatives reaffirmed its Tuesday night vote to award an exclusive license to TransCanada Corp., which must move forward on federal permitting applications for the 1,715-mile pipeline estimated to cost between $26 billion and $30 billion.

This leaves the Senate to approve or reject the license by Aug. 2. Republican Senate President Lyda Green said her energy committee still has a few questions to pose, but she expects for the Senate to vote on Gov. Sarah Palin's license recommendation by late next week.

While the license in no way guarantees construction, it calls for TransCanada to move forward on a costly process of pursuing a federal certificate, but also with up to $500 million in state seed money.

"We are not pursuing this project to spend a lot of our money and the state's money and just end up with a certificate," said TransCanada vice president Tony Palmer. "Our goal is to successfully get a certificate, successfully attract customers and successfully complete a project."

As the debate on Capitol Hill over domestic natural gas and oil production grows increasingly divisive and partisan, Alaska's pipeline discussion is being closely watched.

And should Alaska's Senate concur, it will still be at least another 10 years before any market sees Alaska's gas. Plus, there is still a competing pipeline moving forward without the state's startup money.

That project is a joint venture between North Slope oil producers and gas leaseholders ConocoPhillips and BP PLC, which believed Palin's Alaska Gasline Inducement Act, or AGIA, was too restrictive.

On Wednesday, ConocoPhillips Chief Executive Jim Mulva told analysts that the joint venture project named Denali will progress even if the TransCanada proposal gets full legislative support.

The two companies already have filed paperwork for preliminary federal permitting and $40 million worth of field work is under way. They also plan to eventually solicit bids to ship gas in the pipeline, a process known as open season.