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Palin Finalized 20-Year Quest for Pipeline Deal in First 20 Months
Monday, September 08, 2008
By Josiah Ryan, Staff Writer

In her first 20 months as governor of Alaska, Sarah Palin completed a deal for a natural gas pipeline that had been a top economic goal for the state for nearly two decades.

After battling oil companies and leading lawmakers over the project, Palin signed the bill on Aug. 27, 2008. The deal grants a Canadian company $500 million in state funds and permission to build a $36 billion pipeline to transport natural gas from Alaska's North Slope to the continental United States.

The pipeline, to which Palin referred in her acceptance speech at the Republican National Convention on Wednesday, represents a step towards leading America to energy independence, she said.

“When that deal was struck, we began a nearly $40 billion natural gas pipeline to help lead America to energy independence,” said Palin during her speech. “That pipeline, when the last section is laid and its valves are opened, will lead America one step farther away from dependence on dangerous foreign powers that do not have our interests at heart.”

GOP presidential candidate John McCain and vice presidential candidate Sarah PalinThe 1,715 miles of pipeline will begin in oil- and gas-rich fields on Alaska’s Northern Arctic Ocean and Chukchi Sea coast and continue south through Fairbanks, Alaska, ending at a hub in Alberta, Canada, where gas will be then distributed throughout North America by export pipelines and transport trucks.

A contract for the pipeline, which had been discussed for the last 20 years, was finally negotiated after Palin became Alaska’s governor in 2007.

Palin, who ran against then-incumbent Gov. Frank Murkowski in 2006 pledging to open up bidding for the pipeline in a competitive and transparent manner, rejected negotiations that Murkowski had conducted with oil companies.

Murkowski had offered the major firms exclusive contracts to build the pipeline and had agreed to freeze oil taxes for 30 years and natural gas taxes for up to 45 years.

Palin beat Murkowski in the 2006 primary and took office in January 2007. By February 2007, she had released new requirements for pipeline bidding.

TransCanada, a Calgary-based independent shipper of natural gas, won the bidding, but BP, ConocoPhillips, and ExxonMobil declined to submit plans by Palin's deadline: Nov. 30, 2007.

“Integration of the pipeline with TransCanada’s Alberta System will provide access to diverse, lower 48 markets across the U.S.,” states the TransCanada Web site.
In April 2007, BP and ConocoPhillips announced they had formed a partnership called “Denali” to build their own gas pipeline.

“This project is vital for North American energy consumers and for the future of the Alaska oil and gas industry. It will allow us to keep our North Slope fields in production for another 50 years," Tony Hayward, BP Group chief executive, said on April 8, 2008 – one year after the initial announcement.

According to a TransCanada press release, planning for construction of the pipeline will likely take two more years, leading to a “regulatory review and permitting” phase, a construction phase, and then commissioning of the pipeline by late 2018.

In early August, Democratic presidential nominee Barack Obama endorsed Palin’s bill, about one month before she was chosen to be the GOP vice presidential nominee.

“We should work with the Canadian government to finally build the Alaska Natural Gas Pipeline, delivering clean natural gas, and creating good jobs in the process,” Obama said Aug. 4 in Lansing, Mich.

In an interview with Time magazine in August, Palin named energy policy as one of the causes she will champion if she becomes the nation’s next vice president.

“I would push for a strong military and a sound energy policy,” said Palin. “I believe that Alaska can help set an example on energy policy.”

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