The federal inspector of the Alaska natural gas pipeline project reporting forced U.S. steel companies to lower their bids to supply pipe for the project's western leg by threatening to have the contract awarded to a Canadian steel company.
Rep. John D. Dingell (D-Mich.), chairman of the House energy and power subcommittee, sent aa letter of protest yesterday to the federal inspector, John T. Rhett.
The contract for the western leg of the Alaskan pipeline project was let earlier this year by Pacific Gas Transmission Co.
Three U.S. steel companies and a Canadian firm bid on the project, and PGT tentatively picked the U.S. companies even though the Canadian bid was lower.
"Following these developments, I am informed that you told PGT that either the domestic steel companies would have to lower their bids or the contracts would have to be awarded to the Canadian steel firm," said Dingell. cThe U.S. firms acquisced, he added. At least one of them also complained to Dingell.
Dingell charged that Rhett had overstepped his specific authority if he intervened in that way, and the congressman said he was "deeply disturbed" by the report and "strongly disapproves" of the action.
Dingell's particular sensitivity on the subject stems from the promises he made to the House when the Alaskan project was being debated that the pipeline developers planned to use U.S.-made steel. Rhett's reported intervention was a challenge to Dingell's commitment, a circumstance the congress didn't take lightly.
Rhett's unique position was created by Congress to prevent cost overruns on the Alaskan gas pipeline of the magnitude that plagued the Alaskan oil pipeline.
Dingell told Rhett it is up to the Federal Energy Regulatory Commission to make sure that the construction costs of the gas pipeline project are reasonable and prudent.
The western leg is part of the project's initial phase, designed to bring gas from Canada's. Alberta Province to the U.S. West Coast. An eastern leg is also to be built from Alberta to the midwestern United States.
However, construction of the project's most difficult segment through Alaska to the North Slope gas fields is being delayed because the developer hasn't been able to raise construction funds.