Pipelines remain an important factor in Alaska's energy future.
Source: From Hieb, 2003, West Virginia Geological Society
Photo courtesy of Joint Pipeline Office
you enjoy slow-motion movies, keep an eye on oil and gas development
plenty of action, the pace of progress seems glacial.
the big news.
long-anticipated, 3,500-mile Alaska natural gas pipeline is finally
inching toward reality.
lease acreage will become available in the National Petroleum
new offshore areas will open for petroleum development, including
parts of Bristol Bay and the Beaufort Sea.
go right, new gas resources from NPR-A and other North Slope areas
will feed a major gas pipeline for Canadian and U.S. markets.
for all of this? Years and years.
state government has identified a gas pipeline from Prudhoe Bay
as its number one economic initiative.
huge revenue boost for the state government, on the order of $400
million a year," said Mark Myers, director of Alaska's Department
of Natural Resources Division of Oil and Gas.
argue for a 48- to 52-inch line, because tariffs are more efficient
with a large-diameter line and high throughput, Myers said.
designs would look at shipping 4-to-4.5 bcf a day, expandable to
5-to-6 bcf through compression," he noted.
took a leap forward in October when Congress passed a measure streamlining
the regulatory approval process and providing loan guarantees for
a new Alaskan pipeline.
a unit of TransCanada Corp. asked Alaska to resume processing its
right-of-way lease application for the proposed Alaska Natural Gas
Transportation System, said Rhea DoBosh, communications manager
for the Joint Pipeline Office (JPO) in Anchorage.
a consortium of six state agencies and six federal agencies sharing
regulatory responsibility for oil and gas pipelines in Alaska, primarily
the Trans-Alaska Pipeline System (TAPS).
held a public review process on the TransCanada application in November
and December, preparing for a final determination in 2005, DoBosh
plans call for a pipeline "most-likely" route extending south from
Prudhoe Bay to Fairbanks and Delta Junction, following the current
would parallel the Alaskan Highway east into Canada, linking with
existing gas shipping infrastructure in Alberta.
said the application review process involves only state lands right
leave a few miles of right of way left to the Canadian border,"
she noted -- most of it private or Alaskan native land.
cost of the pipeline project is $20 billion, with the first gas
moving through the system in eight to 10 years.
the Alaska gas line barely crawled forward in recent years, largely
because of economic concerns.
already has announced it may convey its Alaskan right-of-way leases
to another corporation or partnership in the event of a favorable
would like to do is to build the Canadian portion, and they'd like
to have a partner for the U.S. part," DoBosh noted. "We're looking
at $20 billion. That's a lot."
pieces of legislation, one state and one federal, pushed the pipeline
plan into higher gear.
legislature passed a Stranded Gas Development Act in 1998, to encourage
a pipeline outlet for stranded North Slope gas.
lessened financial risks for a pipeline project by reducing and
delaying tax and fee burdens.
Alaska strengthened and extended the measure.
then filed its renewed application under the stranded gas act.
added enabling legislation for an Alaskan gas line to its 2005 military
construction appropriations bill.
to authorizing the pipeline, Congress expedited the federal study,
review and permitting processes.
provided loan guarantees that should lower borrowing costs for pipeline
backers. The guarantee on project loans could reach $18 billion,
or 80 percent of the total capital costs.
lit a rocket under the Federal Energy Regulatory Commission (FERC),
which was given broad authority on environmental and access matters
for the proposed line.
expects to issue a decision in February on requirements allowing
gas shippers access to pipeline capacity.
other companies submitted proposals for their own pipeline development
plans, including MidAmerican Energy Holdings Co., an affiliate of
Warren Buffet's Berkshire Hathaway group, and a consortium of North
Slope gas producers.
view these alternative proposals as placeholders in political maneuvering
over pipeline rights and construction plans.
the Alaska Natural Gas Development Authority has its own plan for
an all-Alaska LNG project, including a gas line from Prudhoe Bay
to Valdez on existing TAPS right of way.
unlikely that two gas pipelines will be built, if future North Slope
natural gas production can't secure the economic future of one.
to 36 trillion cubic feet of known gas reserves, northern Alaska
may offer more than 230 tcf of technically recoverable, conventional
gas, Myers said.
add into that one of the real sleepers on the North Slope -- gas
hydrates," he said.
Bay area alone might hold more than 100 tcf of hydrates, a projected
20 percent economically recoverable, according to Myers.
all the numbers, and a gas pipeline could have a life of "100 years,
if you believe a significant portion of the resource can be recovered,"
reserves at Prudhoe Bay and Point Thompson alone would not support
the economics for a major gas line, and the ANWR area isn't seen
as heavily gas-prone.
turned industry attention to NPR-A, the 23.5 million-acre petroleum
reserve just inside Alaska's northwest corner.
to the U.S. Energy Information Agency, NPR-A contains an estimated
40-85 tcf of technically recoverable, non-associated gas and another
7-17 tcf of recoverable associated gas.
the Bureau of Land Management issued a draft amendment to its land
use plans for 4.6 million acres in the northeast corner of NPR-A.
and Anadarko discovered a stratigraphic oil play in the Alpine Field
near that area, and have extended it onto NPR-A acreage.
on opening the additional acres to leasing should come early in
2005, said Susan Childs, BLM project lead for the northeast NPR-A
will prepare a use plan for the southern/Colville River area of
NPR-A, with a final record of decision likely in three to four years,
slow process, but we're moving forward. We have a multi-use mission,
so we have a variety of issues to consider to protect the environment,"
of decision issued by the Interior Department in 2004 brightened
the future for NPR-A oil and gas development.
it ruled that all BLM-managed lands in the 8.8 million-acre northwest
section of NPR-A will be available for oil and gas leases, although
development of 1.57 million environmentally sensitive acres will
be deferred for 10 years.
the department approved ConocoPhillips' plans to build production
pads for five Alpine satellites.
on NPR-A acreage, two on native corporation land and one on state
land. ConocoPhillips said development drilling at the two NPR-A
sites could begin in 2008, if it can obtain all permits and clearances,
leading to the first commercial oil production from the petroleum
for initial production from NPR-A represents a small but symbolically
important step, said H. Sterling Burnett, a senior fellow at the
National Center for Policy Analysis in Dallas.
a wildlife refuge," he said. "It's not a national park. It's been
set aside for 80 years to drill for oil and gas."
companies bid $53.9 million for lease tracts covering 1.4 million
acres of NPR-A's northwest section in June.
groups filed a lawsuit to challenge the lease sale, seeking further
environmental studies and controls.
present time, with energy prices where they are, with the profound
effect energy has on our society, we should be opening up these
areas," he added.