The upsurge in natural gas prices that started last year has accelerated interest in delivering Alaskan North Slope gas to the Lower 48 (OGJ, Aug. 6, 2001, p. 20). Current feasibility studies are examining various strategic approaches toward that goal:
- The logistics, cost differences, and potential netback from constructing a new gas pipeline to the Lower 48 vs. monetizing the gas via LNG or gas-to-liquids schemes, the latter possibly involving liquids delivered in batches through the Trans-Alaska Pipeline System (TAPS) (OGJ, Jan. 31, 2000, p. 74).
- The best route for a gas line.
- Market and price projections.
- Environmental, legal, and political regulations to be addressed.
This last may be monumental if a gas pipeline is chosen, as TAPS posed an unprecedented challenge in terms of pipeline economics (see special report beginning on p. 66).
Costly pipeline
TAPS, planned as a $900 million project, ultimately cost more than $8 billion, largely because of inflation during long regulatory delays. There also were numerous cost overruns in many other unforeseen, frustrating areas such as:
- Design changes to accommodate changing conditions.
- A $3 million charge just to hire 102 Department of the Interior inspectors after the National Environmental Protection Act took effect in 1970.
- Construction of a mile-long ice-and-gravel pier to reach an ice-entrapped delivery barge at Prudhoe Bay and unload critical materials so pipeline construction could begin.
- Environmental delays for archaeological digs and even "tiptoeing," during construction, around a hibernating grizzly and returning later to complete the then-more-costly missed section after the bruin awoke and lumbered off.
Although the 1 Sag River confirmation well in late 1968 confirmed reserves of what was later estimated as 9.6 billion bbl of oil and 26 tcf of natural gas at Prudhoe Bay-the largest oil field in the US-delays set the project back 5 years. Construction finally began in March 1975 and was completed May 31, 1977.
During North Slope peak production, TAPS delivered 30% of total US crude oil output to Valdez for transport to US markets. Today North Slope fields account for 17-20% of US production.
Lessons learned
Operators learned many lessons from the TAPS construction experience-the better to pave the way for a less problematic, less costly gas pipeline, if it is built.
Building TAPS required the solving of numerous complex engineering and management conundrums:
- How to build a 48-in. pipeline carrying viscous (29.4° API gravity at 60° F.) crude oil to an ice-free port 800 miles away, through 420 miles of permafrost (without thawing it or damaging the tundra), in a seismically active, caribou migration area? TAPS heated the oil, developed drag-reducing agents for easier flow, insulated the pipe, elevated it on vertical support members in the permafrost areas, and raised these at least 10 ft high in more than 554 places to let animals pass.
They kept permafrost from melting by refrigerating buried pipe in some areas and, for elevated pipe, designed heat pipes containing anhydrous ammonia, which vaporizes belowground and rises and condenses aboveground, removing ground heat whenever ground temperature exceeds air temperature.
They zigzagged the pipeline, enabling it to expand or contract as much as 8 ft laterally from temperature extremes that range from 100° F. to -71° F. and to withstand ground movement registering up to 8.5 on the Richter scale. They monitor for ground movement. They applied zinc sacrificial anodes to buried pipe sections to ground them and prevent damage by the area's telluric currents-electrical currents in the earth's surface caused by the same phenomenon that generates the Northern Lights.
- How to place necessary equipment, materials, and personnel in harsh, isolated areas? They built a $180 million road, ceding it to Alaska after construction. They established 20 self-contained camps along the right-of-way, each able to accommodate supplies and 1,000-2,500 personnel. Deliveries included 716 pieces of construction equipment, 600 tons of replacement parts, 5,800 tons of bridge materials, 600 camp buildings, 2,200 tons of camp supplies, and 900,000 gal of diesel fuel. A fleet of five helicopters delivered materials to difficult-access locales.
- How to manage 28,000 personnel under isolated, subzero conditions? They provided comfortable quarters, recreational activities, and good food and medical facilities. They negotiated union agreements with "no strike-no lockout" provisions and enforced a "no guns or liquor" rule. They paid personnel well and trained them carefully for coping with the dangers of working in the Arctic, where flesh can freeze solid if exposed to the air for more than 40 sec, machinery can fail to function, and rubber and steel can shatter like crystal at -41° F.
Improved conditions
In dealing with governmental oversight, TAPS had to acquire 1,347 federal and state permits and 868 Notices to Proceed.
Alaska's current support for a gas pipeline and the US's need for natural gas may bode well for operators now to make approvals acquisition much more timely. And the road is already in place.
Now, if the bears will just hibernate elsewhere.
