NCPA - National Center for Policy Analysis

An $8 Billion Natural Gas Pipeline

April 10, 2003

Congress is debating legislation that would create a new national energy policy. Experts say a critical component of energy policy should be lowering the barriers preventing the exploration and development of new natural gas fields.

North America has an abundance of natural gas, but fields containing more than 213 trillion cubic feet (TCF) of natural gas are on public lands and in offshore areas unavailable for development due to legal and administrative bans.

In Alaska and the Canadian Arctic alone, estimated potential natural gas reserves top 160 trillion cubic feet. These reserves are not being tapped due to the lack of a pipeline to transport the natural gas to market. Accordingly, one component of the national energy plan should be the development of a natural gas pipeline from Alaska to the Lower 48.

There are two potential routes. (See Map) One travels from Alaska's Prudhoe Bay to Canada's Mackenzie Delta and down the Mackenzie River Valley to Edmonton. The second route requires two pipelines, one running from Prudhoe Bay across Alaska to Fairbanks, then along the Trans-Alaska Highway to northeast British Columbia and from there into Alberta, where it connects to a second line running from the Mackenzie Delta through the Mackenzie River Valley. Both routes end at Edmonton. However:

  • The single-line route would cost an estimated $8 billion to construct, just over half the approximately $15 billion cost of the dual-line route.
  • The dual-line route would require significant tax subsidies; last year Congress considered a $15 billion to $45 billion tax subsidy to make its construction attractive.

The single-line route would be less than 1,700 miles long, whereas the dual-line route would stretch almost 3,500 miles, with more than 900 miles crossing mountainous terrain.

Source: H. Sterling Burnett, Ph.D., "Shaping a Progressive Energy Policy: Natural Gas," Brief Analysis No. 434, April 10, 2003, National Center for Policy Analysis.

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