Sen. Mark Begich (D-AK) has urged the state to consider a loan guarantee that would help with financing for a major Alaska natural gas pipeline.
In a letter to Gov. Sean Parnell, Begich said it would be very difficult for the state’s congressional delegation to get an increase in the federal loan guarantee. Begich cited the recent push in Washington to cut federal spending, as well as increased scrutiny on loan guarantees for energy projects.
Federal loan guarantees for the pipeline are $21 billion. Project costs have ranged from $20-41 billion, depending on the route. Debt financing must meet 70% of the project cost under terms of the Alaska Gasline Inducement Act and that could end up at $30 billion, Begich said. That would mean the state would have to consider a loan guarantee of about $9 billion to make up the difference.