There are two main types of media folks: classic reporters (cut through the snow, slow and steady, take what the facts allow, and stick to the basics of who, what, when, where, and why); and pundit/analyst skaters (the talking heads who skim over the snow instead of through it, stick to trails groomed by others, risk stabbing a few dogs for drama, and, if on TV, have a physique that looks good in Lycra).
     Only partly because I don't look good in Lycra, I've always felt more comfortable in the classic mode and in the past worked as a classic newspaper person at three of the state's four largest newspapers. So, in this newsletter, I'll stick to a more classic who/what/when/where/why report on this special session's big decision on a state license that, hopefully, leads to a natural gas pipeline that gets Alaska's gas to markets.

     WHO--Two pipeline entities have proposed building a natural gas pipeline from the North Slope to the Alberta Hub where the gas can be sent to various North American markets. One, TransCanada, is an independent pipeline company. The other is a newly created pipeline company (Denali) owned by two of the multi-national oil and gas producers operating on the North Slope--ConocoPhillips and BP.
     TransCanada is the successful applicant for a state-licensed (AGIA) natural gas pipeline. They submitted a qualifying application that entitles them to $500 million in assistance and other state inducements in return for commitments that help ensure construction, help ensure Alaskans are employed, and add to the state's "take" if North Slope gas is delivered to market.
     TransCanada is a 50-year-old company that builds and owns hydrocarbon transmission lines in Canada and the U.S.  They have been studying and working on a pipeline from the North Slope for about three decades and already have many of the permits necessary for construction. They have a pipeline plan with analyses thicker than a ream of paper and a cost estimate for construction. TransCanada officials say the 36,000 miles of transmission pipe they manage average 25-30 percent less in operating costs than pipes managed by others in North America. They claim capital costs are 19 percent less in Canada and 30 percent less in the U.S. for pipes the size proposed in their Alaska project. These numbers are unchallenged by others.
     Denali is a pipeline company that is only a few months old but is owned by two multi-national oil and gas companies operating around the world and in Alaska. Denali did not apply for the state AGIA license.
     Denali is an entity of two owners of the Trans Alaska Pipeline System (TAPS) that moves oil from the North Slope. The two Denali owners also are two of the three multi-nationals that negotiated a gas pipeline deal with Gov. Frank Murkowski (that deal foundered in the legislature two years ago because the companies wanted unchanged gas and oil taxes for decades as well as other conditions that limited state sovereignty with no commitment to actually construct a gas pipeline). As an important aside, courts and the Federal Energy Regulatory Commission recently determined the TAPS owners, including ConocoPhillips and BP, overcharged the state and independent oil shippers hundreds of millions of dollars over two years for shipping oil from the North Slope.  
     The Denali plan has no cost estimate and they've provided the legislature only a 16-page PowerPoint presentation including front and back cover and 26 photos and logos. They say they plan on spending $600 million to get to an open season where shippers hopefully will bid to commit gas to their pipeline.
     Another option is a pipeline to Valdez to a liquified natural gas plant for shipping by tanker. The port authority, an entity of three Alaska communities that supports this LNG option, has told the legislature they accept the premise of the AGIA license and will work with TransCanada on a potential LNG option.
     WHAT--A natural gas pipeline that gets Alaska's gas to markets. Lease terms for the right to drill for oil and gas specify that producers have a duty to produce if there are economic markets for the product. It is hard to find any gas expert who suggests Alaska's gas can't find a market--even given the huge costs of constructing a gas pipeline.
     The decision confronting the legislature in this special session is 'yea' or 'nay' on whether to issue the license to TransCanada under terms adopted by the legislature last year with only one dissenting vote.
     WHEN--A pipeline as soon as possible. Given: the field work necessary to design and engineer the line; permitting challenges; the time necessary to arrange financing; the regulatory process; and a construction timeline; a realistic but still optimistic definition of ASAP is about 10 years before first flow.
     WHERE--Down the Alaska Highway to the Alberta Hub where gas can be shipped in different directions to North American markets. The only caveat on the 'where' issue is that TransCanada has committed to building either a gas line or gas line spur to an LNG plant on Alaska's coast if enough gas is committed to LNG by North Slope shipper/producers.
     WHY--About $66 billion in net present value receipts to the state. That's the estimate of state earnings by state consultants and TransCanada and also by Exxon, as confirmed in that company's testimony to the legislature Thursday. A pipeline also will stimulate additional Alaska jobs and exploration on the North Slope in the same way the first Alberta gasline (a pipeline longer than the planned Alaska line and built by TransCanada) stimulated exploration and jobs in that province.

     That's the who/what/when/where/why of the gas pipeline story. Now, forgive me, I'll play the pundit/analyst in summary.
     My analysis is informed by my experience as the oil and gas reporter at the Fairbanks paper in the mid-1970s as TAPS was built, my work on accessing Alaska's natural gas as policy director in Lt. Gov. Terry Miller's office in the late 70s and early 80s, and the opinions I've formed living through our state's epic battles with multi-nationals over oil royalty receipts, the Exxon Valdez spill, and TAPS tariffs.
     There may not be a perfect answer on how to best get Alaska's gas to markets but TransCanada is an independent pipeline company with the experience to build and run the pipeline. They have a detailed and heavily vetted proposal and have committed through the AGIA process to conditions that add value to the state and help ensure Alaskans will get work. Denali has no detailed proposal and has not committed to conditions that add value to the state. Denali has said, though, they will continue to flesh out their proposal regardless of whether or not TransCanada gets a state license.
     Given the complexity and uncertainties with any huge pipeline project, it makes sense to give a license to TransCanada that gets us up to the construction phase. TransCanada gives real, additional value if their plan is adopted and their line is built.
     Another benefit is that competition with a state-licensed builder may make the Denali project better for the state. My suspicious nature leads me to believe the gas producers don't want to take the $500 million inducement because they believe complying with the 'must haves' in the AGIA approach cuts into their pipeline profits take and they'll make more by not complying with AGIA license terms. I also believe Denali sees an opportunity to leverage Alaska back into some of the onerous concessions ceded to the companies by the prior administration if TransCanada does not get the state license and they become by default the only pipeline possibility.
     Finally, nothing in AGIA prohibits the multi-national gas producers, including the Denali owners, from negotiating an equity stake in the TransCanada pipeline. In fact, that may be optimal for the state, the producers and TransCanada but that convergence of interest evaporates if an AGIA license is not given to TransCanada.
     So, the summary is more punditry than classic. Even so, my physique is fundamentally unfit for Lycra.