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Quick Hits: Alaska Considers TransCanada Pipeline


Brief scrutiny of today's headlines.

The Alaska House of Representatives is expected to vote today on a plan to build a pipeline that will bring North Slope natural gas to market.

The plan, backed by Republican Governor Sarah Palin, calls for TransCanada (TRP) to build a 1,715-mile pipeline paralleling most of the Alaska Highway and into Alberta, where the natural gas could be sent south to the United States. The plan could unlock up to 4.5 billion cubic feet of natural gas per day.

The vote would give TransCanada a license to pursue federal certification for the pipeline - but there's no guarantee it will be built. Alaska would help with startup costs up to $500 million. TransCanada says the project would cost about $26 billion; the state pegs the cost at $31 billion.

Conoco (COP), BP (BP) and Exxon-Mobil (XOM) hold the rights to most of the North Slope's natural gas, but have been reluctant to begin production without knowing how the state will tax it.

The energy companies have a competing plan to build a pipeline, but critics say it's too vague. Palin, Alaska's first female governor, backs TransCanada, though critics question the company's ability to reach a long-term shipping agreement with producers on the North Slope.

Alaska is at the center of battles to drill for oil in the Arctic National Wildlife Refuge and offshore in federal waters.

The natural gas pipeline measure is expected to pass Alaska's House and move on to the state Senate.
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