Alaska gas pipeline

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Alaska gas pipeline
Location
Country United States, Canada
General direction north–south
From Alaska North Slope
To Calgary, Alberta
Runs alongside Alaska Highway
General information
Type natural gas
Partners TransCanada Corp.
ExxonMobil
Technical information
Length 1,715 mi (2,760 km)
Maximum discharge 41 billion cubic meter per year

The Alaska gas pipeline is a proposal to transport natural gas from the Alaska North Slope natural gas reserves to the U.S. Midwest. The project is developed by TransCanada Corp. and ExxonMobil.[1] TransCanada has secured state seed money and a license from the state of Alaska to build and operate a pipeline, but does not yet have federal approvals needed to start construction. On June 11, 2009 TransCanada announced it had formed an agreement with ExxonMobil to work together in bringing the gas to market.[2]

History[edit]

Initial evaluations[edit]

Large natural gas reserves were discovered in Prudhoe Bay in 1967. Talk of a pipeline peaked during the 1973 OPEC oil embargo and several companies came out in favor of large pipeline projects. Canadian Arctic Gas Pipeline, Ltd.—a consortium of large oil companies including Shell, Exxon, and TransCanada—proposed a route from Alaska's Prudhoe Bay across northern Yukon to the Mackenzie Delta, and then south through the Mackenzie Valley to Alberta. In addition, the Foothills Pipeline consortium pursued a competing Mackenzie Valley Pipeline, starting at the Mackenzie Delta and also running along the river valley to Alberta. Either proposal required the approval of the Canadian government, which named Thomas Berger to lead an inquiry into the proposals. Berger's inquiry resulted in a recommendation for a ten-year moratorium on development of the pipeline to deal with issues such as Aboriginal land claims and setting aside of conservation areas.

In the United States, three competing applications were filed with the Federal Power Commission to construct a natural gas pipeline from Prudhoe Bay. A proposal sponsored by El Paso Corporation routed the pipeline to Valdez along the oil pipeline route with LNG tankers then transporting the gas to terminals on the west coast. The other two proposals would cross Canada on a route parallel to the Alaska Highway. The Federal Power Commission conducted lengthy hearings on the relative merits of the three plans, and under the Natural Gas Act[3] the Commission had the legal right to select the final route. Following the 1976 elections where John McMillian, CEO of Northwest Pipeline was a major supporter of Jimmy Carter, President Carter proposed special legislation to transfer the task of selecting a project from the Federal Power Commission to the President. Congress adopted the Alaska Natural Gas Transportation Act of 1977,[4] and Carter selected the project sponsored by Northwest to the exclusion of the other two projects. The Commission then proceeded to conduct further proceedings to issue certificates of public convenience and necessity to authorize construction of pipelines from Prudhoe Bay and extending to San Francisco and Chicago, and the United States and Canada entered into an agreement regarding having the gas pipeline follow the Alaskan Highway route.

In 1981 to 1982 test sites were built at 7 locations next to the oil pipeline over a 600 mile spread with pipes buried in the ground circulating a glycol solution to simulate gas flowing in the pipes chilled ot 10 Deg F. to study the effects on the permafrost and collect temperature and movement data. This was built over a two-year period and ran for another 2 years. Data was stored on cassette tapes and changed weekly, which was high-tech at the time. The data was used to help with building the new gas pipeline which was to be buried instead of above ground like the oil pipeline. The tests were also verified in labs as late as 1991, 10 years later. Building an LNG facility would not work in the North slope as there is only a 3 month window for tankers to move the gas.

Ultimately, Northwest's consortium could not finance the project, and instead decided to "prebuild" the segments from Alberta to San Francisco and Chicago. Northwest justified the prebuild on the theory that using Canadian gas to depreciate the pipeline for a period of years would make the transportation of Alaskan gas more economic at a later date. The prebuild system went into service under the names Pacific Gas Transmission and Northern Border Pipeline. Subsequently, an affiliate of TransCanada Pipeline acquired Pacific Gas Transmission and 50% of Northern Border. Northwest was acquired by the Williams Companies . As a result, Northwest was no longer willing to pursue the full project to Prudhoe Bay.

All-Alaskan Pipeline[edit]

Former Secretary of Interior Wally Hickel headed a consortium which sought to revive the El Paso proposal to construct an 800-mile gas pipeline along the oil pipeline route from Prudhoe Bay to Valdez (with a branch to Anchorage), because such a route would also serve Anchorage and Fairbanks and would have a much lower construction cost than the overland pipeline routes. The remaining gas would be exported as LNG. Competitors argued that this proposal was barred by the 1977 statute and President Carter's decision. The consortium argued that because the pipeline would be used for intrastate commerce and foreign commerce, but not for interstate commerce, the project would not require Federal approvals under the Natural Gas Act. Three Alaskan boroughs voted to form the Alaskan Gasline Port Authority (AGPA) to promote this project under Alaska Code § 29.35.600.[5]

Following Alaska's decision to contribute $500 million to fund startup costs of an overland route, the AGPA is now advocating a "Y" route which would first go to Valdez and later build a second fork toward Canada.[6]

Alaska Gasline Inducement Act[edit]

On July 3, 2007, the Governor of Alaska Sarah Palin announced that the State of Alaska was ready to receive applications to build a pipeline within the framework of the Alaska Gasline Inducement Act (AGIA).[7] On January 4, 2008, a proposal by TransCanada was selected. Four other proposals were submitted: By Sinopec, AEnergia, the AGPA, which proposed a liquefied natural gas project, and the Alaska Natural Gas Development Authority.

On January 5, 2008, Palin announced that the Canadian company TransCanada Corp., was the sole AGIA-compliant applicant.[8][9] On August 27, 2008, Palin signed a bill into law giving the state of Alaska authority to award TransCanada Corp. 500 million dollars in seed money and a license to build and operate the $26-billion pipeline to transport natural gas from the North Slope to the Lower 48, through Canada.[10][11]

The license is not a construction contract, and federal energy regulators must approve the project before it can go forward.[12]

On December 5, 2008, the AGIA license, jointly awarded to Foothills Pipe Lines Ltd. and TransCanada Alaska, LLC, was signed in Fairbanks.[13]

The pipeline proposed by TransCanada would run 1,715 miles (2,760 km) from the North Slope to Calgary in Alberta. It is expected to cost US$26 billion and to be operational by 2018.[1]

Denali proposal[edit]

Outside of the AGIA process, authorities were evaluating a separate proposal issued by Denali – The Alaska Gas Pipeline LLC, a joint venture of ConocoPhillips and BP.[1][14][15] ExxonMobil was invited to participate in the project.[16] Also Enbridge, Royal Dutch Shell and Gazprom had shown interest to join this project.[17][18][19] However, on 17 May 2011 Denali announced that it ends developing the project due lack of interest from potential costumers.[20]

The project foresaw a pipeline with a capacity of 41 billion cubic meter (bcm) of natural gas per year down the Alaska Highway across Alaska, through the Yukon and British Columbia into Alberta.[1][21] It also consisted of a gas treatment plant on North Slope. The project was estimated to cost US$35 billion.[20]

Route[edit]

Possible routes include the Alaska route, or southern route, a pipeline along the Alaska Highway. A shorter alternative route, which was considered in the 1970s, links Prudhoe Bay natural gas through Mackenzie River Valley. The pipeline will be built only if Canadian authorities can strike a deal with First Nations whose lands are in the pipeline route, who are accusing Palin and other pipeline proponents of treating them with disrespect by not consulting with them.[22]

Politics[edit]

Opposition to the Alaska natural gas pipeline route mandate and price supports came from both the Bush administration and the Canadian government. In a letter to the Sen. Domenici, Secretary of Energy Spencer Abraham wrote, "[The administration] believes market forces should select the route of the pipeline.” He continued, “The administration strongly opposes the price-floor tax credit provision in the Senate energy bill and any similar provisions." Abraham suggested several non-price support tax provisions that could subsidize the construction of the pipeline.[23] Former Canadian Ambassador to the United States Michael Kergin wrote that Canada is of the opinion that the Alaskan pipeline should be built without subsidies and without the route being determined by legislation.[24]

The late Governor Wally Hickel advocated an "All-Alaskan" route which would go from Prudhoe Bay to Valdez and would bring gas to Fairbanks and Anchorage. He opposed the award of the route to TransCanada which would not result in gas service for Alaska's population centers.[25]

In June 2009 Alaska Governor Sarah Palin was interviewed on The Today Show by Matt Lauer. She expressed her support for the pipeline, which was ostensibly the purpose of her appearance on the program.

See also[edit]

References[edit]

  1. ^ a b c d Loy, Weley (2008-01-04). "Palin picks Canadian company for gas line". The Anchorage Daily News. Retrieved 2008-06-14. 
  2. ^ "Alaska Politics Blog : It's on: Exxon and TransCanada announce pipeline partnership (Updated) | adn.com". Community.adn.com. 2009-06-11. Retrieved 2010-05-26. 
  3. ^ 15 U.S.C. § 717
  4. ^ 15 U.S.C. § 719
  5. ^ North Slope Borough: 1,837 Yes / 471 No, Fairbanks North Star Borough: 10,760 Yes / 3,629 No, City of Valdez: 1037 Yes / 256 No. http://www.allalaskagasline.com/pages/project.dev.basis.php[dead link]
  6. ^ Retrieved 2008-09-15.[dead link]
  7. ^ "Alaska seeks bids for North Slope gas pipeline". CBC News. 2007-07-04. Retrieved 2008-06-14. 
  8. ^ "Palin picks Canadian company for gas line: Gas Pipeline". adn.com. Archived from the original on 4 September 2008. Retrieved 2008-08-29. 
  9. ^ "Canadian company meets AGIA requirements". ktuu.com. Archived from the original on 1 September 2008. Retrieved 2008-08-29. 
  10. ^ Rosen, Yereth.“Alaska governor signs natgas pipeline license bill”, Calgary Herald, (2008-08-27.
  11. ^ Gismatullin, Edward (2008-08-29). "TransCanada Gets Alaska Governor Palin's Approval for Pipeline". Bloomburg.com. Retrieved 2008-09-16. 
  12. ^ "Some of Palin's remarks stretch the truth: Gas pipeline, earmark issues have more subtlety than described", Anchorage Daily News, September 4, 2008
  13. ^ "Palin, commissioners sign gasline license: Signing called 'historic day' as natural gas pipeline construction now ready to begin". Capital City Weekly. 2008-12-17. Archived from the original on 20 December 2008. Retrieved 2008-12-19. 
  14. ^ "Palin nod boosts TransCanada pipe plan". Upstream Online (NHST Media Group). 2008-01-04. (subscription required). Retrieved 2008-06-14. 
  15. ^ Quinn, Steve (2008-04-09). "Denali proposal". WTOP. Retrieved 2008-06-14. [dead link]
  16. ^ Mouawad, Jad; Krauss, Clifford (2008-04-09). "2 Oil Firms Plan Alaska Gas Pipeline". New York Times. (subscription required). Archived from the original on 12 June 2008. Retrieved 2008-06-14. 
  17. ^ "Enbridge eyes Alaska pipeline". Upstream Online (NHST Media Group). 2008-05-07. (subscription required). Retrieved 2008-06-14. 
  18. ^ Fowler, Tom (2008-04-10). "Enbridge, Shell Express Interest In Denali". Houston Chronicle (Downstream Today). Retrieved 2008-06-14. 
  19. ^ "Gazprom reveals Alaska pipe dream". Upstream Online (NHST Media Group). 2008-06-09. (subscription required). Retrieved 2008-06-14. 
  20. ^ a b "Denali Nixes Pipeline Project". Denali - The Alaska Gas Pipeline LLC (Downstream Today). 2011-05-17. Retrieved 2011-05-22. 
  21. ^ "ConocoPhillips lays Alaska pipe plans". Upstream Online (NHST Media Group). 2007-11-30. (subscription required). Retrieved 2008-06-14. 
  22. ^ "Palin's Pipeline to Nowhere". Newsweek.com. Retrieved 2013-05-22. 
  23. ^ "White House opposes tax credit for gas line; Tax credit considered key in moving project forward". Associated Press. January 2, 2007. 
  24. ^ Kergin, Michael (2002-05-15). "Trust the Market (and Canada)". The Wall Street Journal. Retrieved 2009-12-15. 
  25. ^ Hickel, Wally (2008-06-21). "Sensible solution is for Alaska to build the gas pipeline". Anchorage Daily News. Retrieved 2008-09-15. 

External links[edit]