Why TransCanada Wants a Palin Victory

Sarah Palin, catapulted from obscurity in Alaska into the global spotlight, has done more than juice up John McCain’s quest to sit in the Oval Office. Should she join him in the White House next January, TransCanada Corp.’s (TRP) fortunes could also be bolstered.

Sam Kanes, an analyst at Scotia Capital, wrote in a research note last Thursday:

The acquisition of the Bison Pipeline and the nomination of Alaskan Pipeline-supporter Governor Palin are mild positives for [TransCanada].

(The Bison Pipeline, which will never get a mention in a stump speech, was recently acquired by TransCanada. The 465 kilometre line runs through Wyoming to another pipeline in North Dakota, parallel to part of the company’s Pathfinder Pipeline. This should consolidate shipper interest in the area in favor of Pathfinder, the analyst said.)

Ms. Palin desperately wants to build the Alaskan gas line, and should the Republicans maintain control of the White House, expect this project to be on the top of her energy security agenda. It was her pet project as governor of Alaska, and she, along with the government, back TransCanada.

That doesn’t make it a sure thing. Two of the state’s major producers – BP plc (BP) and ConocoPhilips Inc. (COP) – couldn’t give a hoot who the state supports. They’re off trying to get their own gas line off the ground, and TransCanada can’t go ahead with its line without the producers on board. Still, TransCanada would have a huge ally in Washington should the Republicans win the election in November.

The Scotia analyst’s note brought a touch of bad news, too. Lower oil and gas prices translate into a “mild negative” for the company.  Scotia knocked $0.05 off its 2009/2010 earnings per share forecast for TransCanada.

Ms. Palin may have brought a “mild” positive to TransCanada, but it seems as though she’s not enough to trump the “mild” negative of lower energy prices. I bet Mr. McCain hopes she can do more for him than she can for TransCanada.

Comments

[deee:]

I like your article but see no reason to call Mrs Palin Ms.

2008 Sep 22 09:29 AM

[Steven Ward:]

The article misses the point. That point being: Nothing was being done at all on the pipeline front, until Palin started a defined bidding process. now look what happens: BP and CP both are now enthusiastic. Palin doesn't care one whit, in reality, who builds the pipeline. But as long as Trans Canada is there then you have competition which is what is needed.And that's the point.

2008 Sep 22 10:33 AM

[Ferdinand E...:]

I've been following this Alaska pipeline 'thing' for about 20 years, and mostly without any genuine interest or belief in the project, but according to the economics that I teach, the time may have arrived for them to begin to construct that pipeline.

2008 Sep 22 10:45 AM

[Liverdiefree:]

Steve's comment is to the point and there is at least on other point. BP & Conoco gave every indication they thought they were the only ballgame in town and running the show until Palin's administration made it clear they were not. Whereupon BP/Conoco started running commercials statewide promoting their "already functioning" pipeline company - until the legislative vote on the Trans Canada bid. Now they're a lot less interested. Their bluff was called and, too late, they realized they were no longer dealing with Murkowski.

2008 Sep 22 11:29 AM

[timf95:]

To proceed with the pipeline,TRP, according to articles I've read in the Anchorage Daily News, does not depend on BP and Exxon's initial cooperation...

2008 Sep 22 12:12 PM

[bbowen7:]

In her short time as governor, Sarah Palin has two related accomplishments - a major ethics bill and a bill to support going forward with the gas pipeline. Among the people who know best about the two, she has 80% approval ratings in Alaska. The New York Times likes to point out that federal approval is still needed, minimizes the accomplishment of getting a project going (before $150 oil) that had been lingering since the Carter administration, and debunks its value because its result isn't immediate. So, who do you listen to - the people of Alaska or the New York Times?

2008 Sep 22 01:52 PM

[Steven Ward:]

I can only assume the NY Times does not favor a pipeline for natural gas out of A;aska to the lower 48.
I can only further assuime that the NY Times has no other hidden agenda on the Palin /pipeline proposal than other to say that the NY Times needs to point out as to what alternative does have an immediate value. And by immediate I guess we mean NOW.
It is incumbent of the NY Times to profer the "immediate solution".

2008 Sep 23 12:52 AM

[User 296329:]

Hello...Palin "unethically favored" TransCanada...TC doesn't even have financial backing yet and it would take OVER 10 years to build..it'll never be built...another Bridge to Nowhere....maybe she should stick to looking at Russia..LOL


On Sep 23 12:52 AM steve Ward wrote:

> I can only assume the NY Times does not favor a pipeline for natural
> gas out of A;aska to the lower 48.
> I can only further assuime that the NY Times has no other hidden
> agenda on the Palin /pipeline proposal than other to say that the
> NY Times needs to point out as to what alternative does have an immediate
> value. And by immediate I guess we mean NOW.
> It is incumbent of the NY Times to profer the "immediate solution".

2008 Nov 11 10:35 PM