Knowledge Problem

Progress Toward a Alaska Natural Gas Pipeline Thwarted by Shale Gas

Michael Giberson

In February, the Federal Energy Regulatory Commission made its eleventh report to the U.S. Congress on the status of efforts to build a natural gas pipeline in Alaska. The twice-annual reports are required by the Energy Policy Act of 2005. Three efforts to bring gas from the North Slope of Alaska to market seem to be underway: TransCanada Alaska Company LLC, Denali – Alaska Gas Pipeline LLC – both of which intend to deliver gas across Canada to U.S. and Canadian markets  – and efforts by Alaskan state agencies for a pipeline to bring the gas to the southern coast for conversion to LNG.

TransCanada route map. Image links to additional company information on route.

Reading between the lines it looks like all three gas pipeline efforts remain alive, more or less, but no one is anywhere close to actually building such a thing. With the current relationship between natural gas prices and oil prices in the United States, natural gas on the North Slope may be currently more valuable where it is, reinjected into reservoirs or otherwise used to aid crude oil production, than it would be in the lower 48 states.

If sufficient people in the industry believed shale gas skeptics and were pessimistic about the long term viability of the resource, someone would be beginning construction on a pipeline from Alaska. I conclude that the skeptics have not yet been persuasive.

Also at ferc.gov: links to all eleven reports to Congress.