The Alaskan natural gas pipeline project has been around for 30 years, but that doesn’t mean the Yukon is ready for the mega-project.
The territorial government will be accelerating its groundwork for the 2,700-kilometre, $30-billion pipeline as Alaska moves closer to its construction.
Alaska state legislators in the House of Representatives passed a bill Tuesday granting TransCanada a licence to build a natural gas pipeline, a large chunk of which would run through the Yukon.
Alaska Governor Sarah Palin’s proposal, under the Alaska Gasline Inducement Act, passed 24 to16.
State senators must vote on the bill by August 2 before the bill is enacted.
If the bill is approved, TransCanada will step up project planning, meaning the territory will as well.
Internally, the government established an inter departmental committee to handle pipeline issues.
Once TransCanada starts its project planning, the committee will increase efforts to study costs of the pipeline, said Brian Love, executive director of Energy, Mines and Resources’ oil and gas branch.
“That’s our job, to understand the costs and impacts of the project, such as infrastructure like highways and social and cultural effects,” he said.
“We want to make sure that’s included in the planning.”
The committee is preparing for the massive regulatory work that follows a mega-project, and exploring questions never asked before, such as: would the pipeline be subject to the Yukon Environmental and Socio-economic Assessment Board?
“That’s the type of work we’d accelerate if the project goes ahead,” said Love.
The assessment board’s involvement is complicated because Ottawa would regulate the Canadian portion of the pipeline.
“We’re determining how the assessment board would interface with the project,” said Love.
Many commentators in Alaska believe the senate will approve the legislation, allowing TransCanada to start project planning.
The 18-to-20 month planning process — soliciting natural gas owners, route surveying, securing permits and First Nation consultation — is expected to cost up to $650 million.
Alaska will provide TransCanada with a $500-million subsidy for planning.
The pipeline would bring natural gas from the North Slope in Alaska, through the Yukon and BC and finally through Alberta.
TransCanada spent much of the past 50 days in hearings with state legislators.
If the senate approves the bill, the company will start planning immediately.
But TransCanada doesn’t want to presume approval just yet.
“We would never prejudge the vote until it’s been held,” said Tony Palmer, TransCanada’s vice-president for Alaska development.
“We hope (the senators) vote soon.”
Critics in Alaska questioned how awarding a large pot of money and rights to a mega-project will maximize benefits for Alaskans.
TransCanada can spend the $500-million subsidy and still decide not to build the pipeline if the economics of the project aren’t sufficient.
And the company doesn’t actually own gas reserves.
TransCanada will have to get gas commitments — called an ‘open season’ — from energy companies BP and ConocoPhillips, which own much of the North Slope reserves, to secure financing.
But the snag is that those companies are also well into the development of a separate pipeline without government support.
Having two projects developing concurrently is nothing new, said Palmer.
“At this stage of development, it’s not unusual to see competing projects, as you’ll find across Canada,” said Palmer.
“TransCanada has attracted gas to our pipelines for 50 years in many different places in North America.”
Love has lived in the territory since 1985 and has followed pipeline proposals for 20 years.
Legislative approval is a significant step, but not a guarantee, he said.
“There are no guarantees just because Alaska says, ‘yes,’” said Love.
“But TransCanada is in a good position to move to the next step.”