U.S. Department of Energy - Energy Efficiency and Renewable Energy

Advanced Manufacturing Office – Industrial Distributed Energy

Two Proposals Aim to Pipe Natural Gas from Alaska

April 16, 2008

After years of legal wrangling, two proposals for an Alaska natural gas pipeline are now moving forward, promising to bring new supplies of natural gas to the continental United States and Canada. The State of Alaska has established the Alaska Gasline Inducement Act (AGIA), which provides financial incentives for an Alaska natural gas pipeline. Proposals were submitted last year, and in January, Governor Sarah Palin announced that only one proposal, from TransCanada Corp., met the state's requirements. TransCanada is proposing a pipeline that would run from Prudhoe Bay in Alaska to Alberta, Canada, where it would connect to a grid of pipelines supplying Canada and the continental United States. TransCanada intends to begin operating the pipeline in late 2017, delivering 4.5 billion cubic feet per day to North American markets. While that proposal is still under review, for now it is the only contender for state funds. See the governor's AGIA Web site and TransCanada's Alaska Pipeline Project Web page.

On April 8, BP and ConocoPhilips announced that they are moving ahead on their own natural gas pipeline project, independent of the state funds. The two companies plan to spend $600 million by the end of 2010 to develop the project, at which point they will seek to establish long-term natural gas supply contracts to account for the capacity of the pipeline, which will be 4 billion cubic feet per day. Called "Denali - The Alaska Gas Pipeline," the pipeline will follow a route similar to the TransCanada proposal, connecting Prudhoe Bay to the pipelines in Alberta. Of course, the announcement adds an element of confusion for Alaska, which must now decide whether to proceed with the TransCanada project. See the BP and ConocoPhilips press release on the Denali - The Alaska Gas Pipeline Web site.