TransCanada: Translating the media coverage

In the Anchorage Daily News, Reporter Wesley Loy filed a story in Thursday's edition about the AGIA bill signing ceremony that took place during the AFL-CIO convention.

After reading the article, it's apparent that the story is in desparate need of some translation.   

Loy writes, "The license is not a construction contract, but state officials hope it will encourage TransCanada to build a pipeline to carry the North Slope's prodigious 35 trillion cubic feet of natural gas reserves."

This makes it seem as if the license itself has the ability to encourage TransCanada to build a pipeline. In fact it cannot; because the license has little or no real value and gives TransCanada no more ability to build the pipeline than the man in the moon.

Loy later points out that fact when he writes, " "In exchange for the state reimbursing up to $500 million of the company's planning expenses, TransCanada has pledged to try to assemble the customers, financing and regulatory clearances for a megaproject that could cost more than $30 billion."

So the only thing the "license" encourages, is for TransCanada to spend $500 million of the state's money trying to convince three of the largest oil & gas companies in the world to pay them to build the Alaska gas pipeline when the producers can build it themselves more profitably. 

Loy then writes, "The license is a pact spelling out commitments between the state and TransCanada, which the Palin administration chose in January from among a handful of bidders."

TransCanada was not choosen among a handful of bidders. 

In fact they were the only company to submit a qualifying bid.

Loy makes the AGIA process sound more competitive than it actually was.

Out of only four companies that bid, three - Sinopec, AGPA and Aenergia - were tossed out because they didn't submit qualifying bids. And lets be honest, two of those bidders (AGPA and Aenergia) were completely lacking any substance.   

Yesterday I posted a blog and stated that TransCanada had been relatively quiet in the marketplace signing work commitments. Industry support people I spoke to all said they have heard nothing of any contracts let. 

That could be due to the fact that lawmakers failed approve the effective date clause after passing the AGIA license. The state's reimbursement share doesn't become available until the license becomes effective which is ninety days from now.

According to Loy's article the company has inked a small contract with Colt, a Calgary-based engineering firm, to perform some work on that side of the border as well as a company to do aeriel photos of the pipeline route. 

Again, TransCanada's reluctance to spend their own money without the benefit of the state's match money points out the fact that without the $500 million from the state, TransCanada wouldn't even be here. 

Meanwhile Governor Palin called the bill signing "one of the most historic and exciting events to happen since statehood."