The sun dips below the horizon in one of North Slope's villages in Alaska: where TransCanada plans to build its massive natural gas pipeline from
Begich doubtful on pipe loan guarantees
Alaska's newly-elected US senator Mark Begich has said he doubts Congress will grant further loan guarantees to TransCanada to back the company's plans to build a massive natural gas pipeline from the North Slope.
Senator-elect Mark Begich, the Anchorage mayor who last month defeated Senate veteran Ted Stevens, said at a news conference that he was "troubled" by new reports that TransCanada wants additional loan guarantees.
Begich said he supports the $18 billion federal loan guarantee provision that is contained in 2004 legislation aimed at encouraging the mega-project. That provision already includes an inflation clause, he said.
Beyond that, extra federal dollars are unwarranted for now, he said.
"I would be very cautious about looking at the future until I see real project performance," he said at the news conference.
The idea of further federal support for TransCanada is also going to be unpopular, he said.
"In this economic condition the country's in, getting loan guarantees and these kinds of things is very difficult," he said.
Aside from the issue of loan guarantees, Begich said he will work to secure federal support for the project.
"That gas line is not an Alaska project. It's a national project that is located in Alaska," he said.
Begich, a Democrat, ousted 40-year incumbent Stevens, the Senate's longest-serving Republican. Stevens had previously spoken out against granting extra loan guarantees for an Alaska natural gas pipeline.
A spokesman for Alaska Senator Lisa Murkowski had a similar message.
"We've seen the press report that TransCanada may be seeking additional federal loan guarantees, but we haven't seen any details of such a request," said Michael Brumas, spokesman for the Republican senator.
"Given the financial meltdown, the marked drop in oil and gas prices and the size of the federal deficit in the wake of the economic rescue efforts, it's difficult to predict whether Congress would be interested in providing more financial assistance for an Alaska line," he added.
He said the inflation clause in the 2004 legislation "has already increased the loan guarantee by $2 billion over the last four years."
TransCanada last week was formally awarded a state licence to build and operate the gas pipeline, a project that would run 1715 miles (2744 kilometres) from Prudhoe Bay to an existing pipeline hub in Alberta and would cost $26 billion, according to company estimates.
The pipeline, envisioned since the 1970s, would be used to ship the North Slope's known natural gas reserves of 35 trillion cubic feet and as yet undiscovered reserves.
TransCanada was Governor Sarah Palin's choice as the project sponsor. It had emerged as the only one of five bidders that qualified for the licence, under competitive terms established by the Palin-sponsored Alaska Gasline Inducement Act, passed by the legislature in 2007.
The licence grants matching state funds of up to $500 million for project preparations and a ban on state negotiations with any other potential pipeline sponsor. However, it does not exclude other parties from applying for permits to build a similar pipeline project.
BP and ConocoPhillips, two of the major North Slope oil producers and holders of leases to the known natural gas reserves, have joined forces in a competing natural gas pipeline project called Denali, a Reuters report said.