Prohibiting routes for arctic gas subverts energy policy

Bob Tippee

The House-Senate conference committee that disgorged the omnibus energy bill the Senate rejected on Nov. 21 made half of a good decision on a pipeline that would carry natural gas southward from the North American Arctic.

It spurned price protection considered essential to a pipeline crossing Alaska from the North Slope to Canada.

But it left in place a prohibition against a pipeline paralleling the Beaufort Sea coast from the North Slope to Canada's Mackenzie River Delta.

The Beaufort Sea crossing heads what's known as the over-the-top concept for moving gas from the North Slope and Mackenzie Delta through a single pipeline to a connection with existing systems near Edmonton, Alta.

Refusal by Congress to permit the link between the North Slope and Mackenzie Delta would leave the trans-Alaskan scheme as the only conveyance for North Slope gas.

That's why supporters of the Alaskan route—mainly the Alaskan congressional delegation—wanted the prohibition in addition to price protection.

A trans-Alaskan pipeline would connect in northern Alberta with a proposed all-Canadian pipeline from the Mackenzie Delta.

The Canadian part of such a wishbone-shaped system has been discussed for years. But there are questions about sufficiency of Mackenzie Delta reserves.

The over-the-top system would supplement Canadian with Alaskan reserves, involve half as much mileage as the two-pronged Alaskan-Mackenzie Valley scheme, avoid the mountain crossings that challenge the Alaskan proposal, and cost much less to build.

It also wouldn't require American taxpayers and Lower 48 producers to relieve investors of price risk.

Foreclosing that option in favor of a more expensive, subsidy-dependent alternative has never made sense from the perspective of US or Canadian energy policy.

Congress has rejected price protection for the Alaskan pipeline twice in 2 years. Whatever parochial rationale ever existed for prohibiting the Beaufort link is gone.

Congress should reject the ban and get politics out of pipeline decision-making. Projected needs for arctic gas are great, not only in the Lower 48 but in southern Alberta as well.

Energy policy should encourage construction of whatever pipeline most appeals to investors—whatever its route—beginning as soon possible.

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