More gas lines to eastern markets needed if Arctic trunkline is built

Building a pipeline to deliver gas from Alaska and Mackenzie Delta fields would have significant economic and environmental benefits, an INGAA Foundation study said Thursday. It added such a line would require more pipelines to demand centers in the eastern US and Canada.

By the OGJ Online Staff

WASHINGTON, DC, July 26 -- Building a pipeline to deliver natural gas from Alaska and Mackenzie Delta fields to US and Canadian markets would have significant economic and environmental benefits, an INGAA Foundation study said Thursday.

The research arm of the Interstate Natural Gas Association of America assessed the commercial feasibility of a pipeline project to transport gas from Alaskan and Canadian frontier areas.

Without endorsing a specific project, the study concluded that a trunkline could be built with minimal environmental impact and substantial long-term economic benefits.

INGAA Pres. Jerald Halvorsen said, "As natural gas continues to be the fuel of choice for North America's expanding electricity generation market, rising consumer demand, national security concerns, environmental needs, and economic competitiveness require development of gas, and delivery of gas by pipeline from the Alaskan and Canadian arctic frontier."

It said Alaskan North Slope fields have 31 tcf of reserves and Mackenzie Delta fields 13.5 tcf.

The study said proven frontier gas reserves represent more than 10% of the North American gas reserve base of 375 tcf, a proportionately greater amount than the Alaskan oil reserve base when the Trans-Alaska Pipeline System was built in the 1970s.

The study said any frontier pipeline project remains viable with prices at $3-4/MMbtu delivered into Chicago. It said that, assuming timely regulatory approvals, frontier gas could flow into the North American gas grid by 2007.

It said since more than 50% of gas demand is in the eastern US and Canadian markets, more capacity would be needed to move gas eastward from Alberta. "Pipeline routes and access through Ontario and Ohio are key to retaining an integrated gas market."

It noted that projects must address native land access and land claims, and urged the gas industry to focus on regional development with frontier communities. "A very important element in any frontier pipeline is successfully dealing with native issues, which are substantial, but so are the potential benefits. [It is] a case of finding the win-win solution early, before sides are taken."

The paper also said the regulatory approval process should be streamlined and accelerated. It said North America needs a coordinated infrastructure development policy.

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