NCPA - National Center for Policy Analysis

A Better Route for Alaska Natural Gas

December 2, 2002

Critics sighed with relief that the expiring Congress did not pass an energy bill. Among the items in the bill facing widespread opposition were a mandate and subsidies for an environmentally and economically challenged natural gas pipeline through Alaska.

The bill would have required that a natural gas pipeline from the North Slope of Alaska follow a route south to Fairbanks, then along the Alaska Highway into the Yukon Territory, across British Columbia and into Alberta. The Senate version of the bill included tax subsidies of between $15 billion and $45 billion -- subsidies opposed by the American Conservative Union, Taxpayers for Common Sense and the National Environmental Trust.

  • However, this would require a separate pipeline for gas from the Mackenzie Delta of Canada, and neither line is considered economically viable by itself.
  • Current reserves for the two fields are 35 trillion cubic feet in Alaska and 6 trillion cubic feet in Canada, with the exploration potential of another 160 trillion cubic feet.

An alternative proposal by Arctic Resources Co., according to chairman Forrest E. Hoglund, would have the pipeline run offshore from the Alaskan reserves to the Mackenzie River Delta and then through the Mackenzie River Valley to the existing natural gas pipeline interconnects near Edmonton. Among the advantages of that route, according to Hoglund:

  • It is about half of the distance and roughly half the cost of Alaska's two-pipeline scheme.
  • It is a better environmental route, would be faster to build and wouldn't cause conflict between Canada and the United States.
  • It wouldn't require any subsidies from either country.

Source: Forrest Hoglund (Arctic Resources Co.), "High-cost gas pipeline undercuts energy project," Dallas Morning News, November 16, 2002.


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