Alliance gas pipeline comes under attack

The proposed $3.7 billion (Canadian) Alliance pipeline project to move gas from British Columbia to the Chicago area has come under fire from several fronts.

A number of intervenors argued at National Energy Board hearings that Alliance has not specified where much of its gas supply for the 1.3 bcfd line will come from.

Meantime, the sponsor of a competing project, TransCanada PipeLines Ltd., Calgary, says it will expand its natural gas main line in western Canada to supply volumes to its Viking Voyageur pipeline project into the U.S. Midwest.

Foothills views

Foothills Pipe Lines Ltd., Calgary, owned by Nova Corp. and Westcoast Energy Inc., questioned supply for the line, lack of market for the gas, and safety of the high-pressure line. Foothills said no tests had been done on the line, which would transport liquids-rich gas.

In written evidence, Foothills argued that:

Alliance has no supply underpinning 42% of its transportation capacity in the first year, and shortfall increases in the following years.
Alliance has not proven that markets exist in the U.S. Midwest for capacity that is additional to what is already being built over the next 2 years.
There are shortcomings in Alliance design with respect to pipeline fractures. It proposes to operate at significantly higher pressure and richer gas composition than any other transmission pipeline in North America. The industry's fracture control design methods have not been proven at this combination of pressure and composition. In NEB testimony, Foothills CEO Bob Pierce noted that he was speaking on behalf of Foothills. Westcoast Energy, which owns 50% of Foothills but also has an 11% interest in Alliance, said Pierce was not speaking on behalf of the Foothills board. A Westcoast spokesman said company Pres. Art Willis and Pierce "had agreed to disagree."

Safety, supply concerns

Alliance official Jack Crawford said the high pressure question is a very esoteric engineering issue that its engineers have been examining. He said Alliance is confident its designs are safe.

Mike Sawyer, executive director of the Rocky Mountain Ecosystem environmental group, failed in a bid to have the hearing delayed on grounds that the Alliance application was incomplete and didn't show where 30% of its supply will come from. The board said the supply issue will be dealt with during the hearing. Sawyer claims that Alliance will require 2,000 new gas wells and that the pipeline also will have negative effects on the environment.

Nova Corp., Calgary, also said further clarification is needed on supply issues. Nova, which operates Alberta's main gas pipeline system, says it is not opposed to the Alliance project outside Alberta. It says the Alliance segment within Alberta would be an unnecessary $1 billion duplication of existing facilities.

Viking Voyageur expansion

The $920 million Viking Voyageur expansion project would initially involve looping and compression facilities but would later become the company's seventh line in the area with a capacity of 1.4 bcfd.

TransCanada had earlier proposed the TransVoyageur high-pressure pipe- line project in Saskatchewan and Manitoba to supply the Viking Voyageur line.

The company will file an application this winter for the expansion, with a completion date in November 1999, the same completion target for the Viking Voyageur line to markets in Minnesota, Wisconsin, and the Chicago area. The 777-mile Viking Voyageur line, with a price tag of $1.2 billion, is owned by units of TransCanada, Northern States Power, and Nicor.