Alaska Governor Sarah Palin (R) is inviting prospective builders to submit applications to construct a multibillion-dollar gas pipeline from Alaska's North Slope through Canada to markets in the Midwest. The pipeline is expected to cost about $30 billion, and officials have said it could carry trillions of cubic feet of gas.
In making the announcement to open the competition, Governor Palin said the process is open to anyone interested–oil companies and independent pipeline builders. "The RFA (request for applications) commences AGIA's fair, open and competitive process by inviting creative offers for the pipeline proposal that will maximize the benefits for all Alaskans," she said, referring to the Alaska Gasline Inducement Act. Applications are due October 1 and must include information on the line's route, its intended markets and how it will be designed and constructed.
But the three North Slope producers who were expected to be major participants in the line remain unpersuaded. Earlier this year, all three of the oil producers (ExxonMobil, BP and ConocoPhillips) that hold leases to the gas that would flow through the pipeline came out against the Palin plan, criticizing its lack of fiscal certainty. Exxon CEO Rex Tillerson told shareholders at the company's May annual meeting that the burgeoning cost of labor and steel had pushed the project out of reach, at least under the terms offered by Alaska. "We cannot submit a bid under the AGIA legislation," says BP spokesman Steve Rinehart. "We want a successful gas line. Alaskans want a successful gas line, but we cannot bid under the terms of that legislation."
The state under former Gov. Frank Murkowski (R) had a deal with the three producers to build a pipeline, but Palin scrapped it after taking office last year. She introduced her own plan for the project in January and the legislature passed it in May.
The state has said it plans to announce its selection of a developer early next year.