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State lawmakers may be leaning toward support for approving a contract with TransCanada Alaska Company to build a gas pipeline from the North Slope into Canada to the Lower 48, Sen. Gary Stevens said this week.

In a written update of the special session focusing on TransCanada's application under the Alaska Gasline Inducement Act, the Kodiak Republican said he and many of his colleagues remained skeptical about a competing proposal from the major gas producers BP and ConocoPhillips despite that project not needing the $500 million in state seed money available through the AGIA process.

"With many of us concerned about taking a chance on the major oil producers' willingness to follow through on their proposal, and the desire to not be beholding to them through tax concessions, it appears as though momentum is building for the TransCanada contract," he said.

Reached by phone in Anchorage on Tuesday while attending a pipeline presentation, Sen. Tom Wagoner, R-Kenai, agreed with Steven's general assessment.

"When we take a vote on the license (for TransCanada), the license passes," he predicted, adding that he fully supports backing Gov. Sarah Palin's recommendation that TransCanada be granted a state license to pursue a pipeline project.

The downside of voting against a TransCanada license is that it would leave Alaska at the mercy of the producers and their monopolized line, he said.

"Watch closely those legislators that vote against this and find out why," he said, adding that some lawmakers appeared to be jockeying for positions in any legislative reorganization following the fall election.

Most have made up their minds already, he said. Their time would be better spent voting quickly and getting on to other business -- Palin's call for a special session to consider her plan for energy cost relief, for instance.

"I think we should quit wasting our time and vote this thing up or down," he said. "I don't think we are accomplishing one thing dragging this thing out."

After completing a week of hearings on the TransCanada proposal, legislators have begun a series of statewide meetings to gather public comment. A public hearing is scheduled for the Soldotna Sports Center on June 26.

The feasibility of a pipeline from the North Slope to Valdez, where gas would be converted to liquefied natural gas and shipped overseas, has also been a topic of discussion during the special session, Stevens said. But it has some problems.

"Given the need for plants and ships designed to carry LNG to market, the experts we have heard from believe the cost-benefit ratio is far less than it will be with the TransCanada proposal," he said.

Also discussed have been various spurs and bullet lines from a main line to bring gas to Alaska communities, he said. The AGIA contract includes provisions guaranteeing five access points along the main line for that purpose.

If TransCanada eventually wins a state license to proceed, that's no guarantee a pipeline would be built. The project, estimated at $30 billion, would hinge on TransCanada's ability to lure producers willing to ship their gas via a pipeline. If shippers can't be enticed, the project is dead.

BP and ConocoPhillips, on the other hand, can claim their Denali project already has plenty of gas -- gas they own. Not needing the state's $500 million in seed money is another plus, in the eyes of some lawmakers.

Rep. Mike Chenault, R-Nikiski, said Tuesday he'd been hearing presentations by the Alaska Oil and Gas Conservation Commission and the Alaska Department of Natural Resources. An issue to be considered is the rate at which gas would be taken from Prudhoe Bay and other North Slope gas fields. Adequate gas pressure is vital to the economic recovery of oil. According to the AOGCC, taking too much gas would mean leaving oil reserves permanently in the ground.

Chenault said there was another wrinkle in the fabric -- whether a pipeline meant to ship southward up to 4.5 billion cubic feet of gas daily could actually be filled, considering that the 6 trillion to 7 trillion cubic feet of gas thought to be at the Point Thompson oilfield was off the table, and would be until it is determined whether or not tapping that gas would be detrimental to the eventual recovery of the field's oil and liquid condensates, products of higher value than the gas.

"If we are talking about an open season and Point Thompson is off the table, where do we get 4.5 billion cubic feet a day?" Chenault said, adding that for some lawmakers, the news about Point Thompson was new.

Chenault said that for the moment at least he was leaning toward having BP and ConocoPhillips build the line. But he also said his mind was open to being convinced that the TransCanada proposal was better.

Rep. Kurt Olson, R-Soldotna, who was recovering from a visit to the dentist when reached Tuesday afternoon, said he'd been hearing a lot about a proposal by Enstar, which would build a 20-inch line able to carry a half-billion cubic feet a day directly from the Foothills some 370 miles to Fairbanks and then a 320-mile stretch from Cook Inlet to Fairbanks. The project is estimated to cost $3.3 billion, but could be completed in five to six years.

"It wouldn't be cheap gas, but it would be a reliable source," he said.

Selling the gas at less than fair market value to cut costs to consumers would require a change in the state's constitution, Olson said.

The BP and ConocoPhillips project "got legs" this week, Olson said, with its request for a preliminary review by the Federal Energy Regulatory Commission, something TransCanada isn't yet ready to do.

"It could put them a year up on a time basis," he said. "They've also opened an office in Tok and have about 100 people in the field."

Olson said the biggest problem with the AGIA process and TransCanada's proposal is the $500 million in state seed money, which some of his colleagues do not view favorably, he said. Olson said he has not yet made up his mind.

"I don't think I'm willing to vote until we've completed the process," he said, adding that lawmakers are getting some good out of the hearings and meetings. "We are learning something new every day, and getting input from people who haven't had a chance to weigh in."

The FERC will ultimately determine which project gets a permit to construct a pipeline from the North Slope. A FERC official reportedly told lawmakers in Anchorage on Monday that the commission could approve both projects and wait to see which could produce the necessary financing.

Hal Spence can be reached at hspence@ptialaska.net.