Watch how this works...

Just a couple days after Alaska Gov. Sarah Palin talked up natural gas, while apparently moderating her stance on global warming, she received an unexpected present from her state legislature.

Juneau is buzzing about a last-minute addition to the state’s capital budget giving Gov. Palin funds to push ahead on a small pipeline to bring gas from the North Slope down to Fairbanks and Anchorage, where most Alaskans live.

Governor Palin cracked the ceiling on this project (which no previous Governor in the State of Alaska could do). The WSJ points out that this is a small concession since the ultimate goal is to get a nice whopping $30 Billion pipeline all the way down to the Lower 48. TransCanada, and BP Conoco were not in a cooperating mood to push the project forward. They still, really, aren't... But...what a difference a week makes...

SAN FRANCISCO (Dow Jones)--TransCanada Corp. (TRP) started the permitting process this week for its $30 billion Alaskan natural gas pipeline, while two oil majors work on a rival project.

The Canadian pipeline company filed a request Thursday with the Federal Energy Regulatory Commission to start what's called a "prefiling procedure" in which the company works with regulatory staff to ensure it has all the data and information needed to file a formal application for approval of the project.

TransCanada plans to build a 750-mile pipeline from Prudhoe Bay to the border of Alaska and Canada's Yukon Territory, extending several hundred miles through Canada to the continental U.S. The pipeline would ship 4.5 billion cubic feet of gas per day, with possible expansion to 5.9 billion cubic feet. TransCanada will decide on a final route based on shippers' interest. The company also plans to solicit interest in a separate 800-mile gasline from the North Slope to a liquefaction plant in Valdez, where gas would be shipped to the U.S. by tanker.

There is still no agreement between TransCanada and BP Conoco, but the trump card is that Exxon (which controls a heap load of natural gas and oil on the North Slope) could apply the screws to the party that has the best pipeline plan to get moving.

Now...watch how this works...

Expect Washington to set loose the dogs in an effort to scuttle what is shaping up to be a dramatic increase in natural resources available to the Lower 48. How will they do it?

Environmental suits; pressure from the Legislature on escalating taxes on energy companies...attacking Gov. Palin head on...

I predict all out war on this project...and you will recall that the White House threw a rider into the bailout that allows them to shut down companies and projects based on a perceived threat to protected wildlife without debate or legal review. Interestingly, it was the Alaskan Senators providing the most opposition to the "stroke of a pen, law of the land, kinda cool" order.

All out war...I'm telling you.