To buyout, or not to buyout? The Legislature debates

The Legislature is meeting in Juneau this week for a special session on the Alaska LNG project — that’s the proposal to build a giant natural gas pipeline from the North Slope.

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The big question before lawmakers this session is whether the state should take a larger stake in the project, by buying out one of its partners. APRN’s Rachel Waldholz is covering the legislative session.

TOWNSEND: Rachel, what did lawmakers talk about today?

WALDHOLZ: The focus today, and since Saturday, has been on one big issue: whether or not to buy out the pipeline builder TransCanada and take over a larger share of the project. The governor has been very clear he wants to do that — his administration has been making their case to the Legislature. Republican leadership has said they’re open to the idea, but so far have been skeptical during questioning.

TOWNSEND: Walk us through this. Who is TransCanada, and what’s their role in the project now?

WALDHOLZ: Right now, the project is a five-way partnership. There’s the state and ExxonMobil, BP, and ConocoPhillips, the three producers on the North Slope. And TransCanada currently shares the state’s stake. They’re a major Canadian pipeline company. Listeners might have heard their name in connection with the Keystone XL project, which is the controversial proposal to connect Alberta tar sands to the Gulf Coast. That’s another one of their projects.

TOWNSEND: What are the pros and cons?

WALDHOLZ: The governor really sees it as a slam dunk. Right now, TransCanada is essentially acting as a lender. They front the money for the project, and we have to reimburse them for their costs plus 7 percent interest. The administration thinks we could finance it more affordably ourselves. The governor also argues that if we buy out TransCanada, the state will have a greater vote on the project, which governor sees as crucial, to have more control. Lawmakers’ concerns are two-fold: TransCanada brings a certain amount of expertise to the table. And it might make sense to pay TransCanada, even if it’s more expensive, instead of having to find that financing up front.

TOWNSEND: How long will the session go?

WALDHOLZ: Nobody knows. A special session can last up to 30 days. There were originally two bills on the agenda and the governor pulled one — the natural gas reserves tax — on Friday. So I think lawmakers are hoping that means a shorter session. But the material is pretty dense. I think a lot of lawmakers are still wrapping their heads around it. And House Speaker Mike Chenault is now talking with the governor about potentially adding another issue to the agenda. I spoke with Senate President Kevin Meyer today, and he guessed the session would last maybe 10 days or two weeks. But he said, don’t hold him to it.