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TransCanada lobbies Congress for transport fees In briefing prepared for members of Congress, company proposes that U.S. pays if pipeline fails to attract enough paying customers Wesley Loy Anchorage Daily News
A Canadian energy company seeking a state natural gas pipeline license has been actively lobbying in Washington, D.C., to have the federal government cover the cost of the project should the company fail to attract enough paying customers.
The lobbying suggests the federal support is more than just “creative thinking” or a fallback option, as members of Gov. Sarah Palin’s gas team have described it, but rather a key prerequisite for building the multibillion-dollar pipeline.
TransCanada Corp. executives and the company’s Washington lobbyist, Tom Roberts, in recent weeks visited several members of Congress and handed out a four-page briefing paper outlining what they call the “bridge shipper” proposal.
As a bridge shipper, the federal government would pay pipeline transportation fees in the event the pipeline fails to attract regular paying customers such as natural gas producers or industrial gas users.
The federal government would keep paying fees until TransCanada could recruit customers, the briefing paper says, a potential outlay of billions of dollars.
It doesn’t say if the money would ever be paid back.
The briefing paper says Congress has “a long tradition of providing major capital outlays” on nationally important projects such as interstate highways, ports and tunnels, and the Alaska gas pipeline fits that bill.
“The Congress should ‘kick-start’ the Alaska gas pipeline by authorizing a bridge shipper arrangement ... for the full initial capacity of a new pipeline from Prudhoe Bay to Alberta,” the paper urges.
TransCanada is the sole contender under official consideration by the Palin administration for a state license and $500 million in seed money to pursue the project, long a state economic development dream.
Bridge shipper idea in application When TransCanada and four bidders applied for the license last year, TransCanada touched on the bridge shipper idea in its application.
The briefing paper passed around Capitol Hill, however, is more detailed and much more direct in asking for the federal money.
A major question is whether the oil companies controlling most of the North Slope’s enormous gas reserves — ExxonMobil, ConocoPhillips and BP — would sign contracts to ship their gas through TransCanada’s pipeline.
The oil companies have said they first want the state to commit to a stable policy on how to tax gas production, but Palin has shown little interest in talking taxes with the oil giants. Instead, she and her aides have expressed confidence the oil majors would pledge their gas if a builder lays a pipeline.
As a “bridge shipper,” the federal government would pay pipeline fees until the gas producers or other customers “are in a position to commit their gas” to the line, TransCanada’s briefing paper says.
Chuck Kleeschulte, an energy aide to U.S. Sen. Lisa Murkowski, R-Alaska, said TransCanada executives Tony Palmer and Dennis McConaghy, along with lobbyist Roberts, visited the senator’s office at the end of January and provided the briefing paper.
Roberts from 1985 to 1990 was chief counsel and legislative director for Murkowski’s father, Frank Murkowski, when he was in the Senate.
Reached March 14 in Washington, Roberts referred questions to the TransCanada executives.
Palmer: visits ‘a preview’ Palmer said March 14 that TransCanada officials and lawyers wrote the briefing paper, and that company representatives visited fewer than 10 federal lawmakers or their staffs to talk about the bridge shipper idea. They included U.S. Sen. Ted Stevens, R-Alaska; Sen. Jeff Bingaman, the New Mexico Democrat who chairs the Senate Energy and Natural Resources Committee; and key House members with energy oversight.
The company knew the bridge shipper idea would become public, so it made the congressional visits and handed out the briefing paper as “a preview of what we may be asking for,” Palmer said.
The aim is to have a pipeline financed, up and running by 2017, and one way to do that is having the federal government cover pipeline fees until regular customers are signed up, he said.
Stevens, in a Feb. 19 speech to the Alaska Legislature, said he doubts the bridge shipper idea has “any hope at all” of passing in Congress.
Joe Balash, Palin’s oil and gas adviser, said March 14 he saw the briefing paper for the first time after a reporter gave a copy to the governor’s office.
He said the administration is focused on reviewing TransCanada’s application, and the bridge shipper idea is “immaterial” if the gas producers pledge their gas to the pipeline.
But state officials seem interested in learning more. On March 5 they sent a letter to TransCanada with the question: “Please clarify how, and under what circumstances the federal government would act as a ‘bridge shipper.’”
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