The Alaska Senate voted 16-3 on Tuesday to buy out TransCanada and take a larger stake in the Alaska LNG gas pipeline.
The vote is a win for Gov. Bill Walker, whose administration has argued that keeping TransCanada as a partner did not make financial sense, and a buyout would give Alaska more control over the proposed megaproject, which the state is developing along with ExxonMobil, BP and ConocoPhillips. The buyout must still be approved by the House, which is expected to vote later this week.
Fairbanks Republican Pete Kelly, co-chair of the Senate Finance Committee, said he arrived in Juneau 11 days ago opposed to the bill. But, he said, he was convinced that TransCanada itself wanted out of the partnership, and that the buyout would ultimately cost the state less than keeping the company in.
“Another thing that it gives us, beside some of the financial advantages, is that we are closer to the project, we have a seat at the table, we are involved in decisions as we go forward, and that is of great value as we contemplate a project of this magnitude,” Kelly said.
Anchorage Democratic Sen. Bill Wielechowski said he favors the buyout for the same reasons he opposed the original deal, under former Gov. Sean Parnell. That deal in 2014 ended the state’s partnership with TransCanada in the Alaska Gasline Inducement Act, or AGIA, and brought the company into the current Alaska LNG project.
“But the deal that was struck by the prior administration was not a good one,” Wielechowski said. “When the time came to strike a bargain, TransCanada bargained hard. They did what they were supposed to do for their shareholders, and they got a good deal. Unfortunately that deal came at the expense of the people of Alaska.”
Meanwhile, Wasilla Sen. Mike Dunleavy, one of the three no votes, said that after a week and a half of hearings, he still wasn’t convinced the administration has a clear plan for the gas line going forward. He said it seems like different state agencies are working against each other.
“But as I stand here today and I speak to this body, I have serious concerns,” Dunleavy said. “I believe that there were questions that went unanswered. I believe the onus was on the administration to prove to me that we’re headed in the right direction, and personally I think it came up short.”
Dunleavy said he hoped his vote would send a message to the administration on “getting its act together.”
The bill would allow the administration to spend about $157-million to buy out TransCanada, continue work on the project’s early planning phase, and fund state agencies. It’s about $600,000 less than the administration originally asked for, after agencies revised their request.