ALASKA LNG: THROUGH THE YEARS
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NUMEROUS NEW PLANS ... NUMEROUS SETBACKS
gas to markets. A wide-ranging set of options were considered including a pipeline west from Prudhoe Bay through the National Petroleum Reserve-Alas- ka to an LNG plant on the Chukchi Sea coast. The companies settled, however, on a pipeline built parallel to the Trans Alaska Pipeline System similar to YPC’s plan to an LNG plant in Valdez. Unlike the YPC proposal, however, the producer-led group considered an LNG plant sited adjacent to the existing Valdez Marine Terminal, which handles crude oil storage and shipments. Under this plan, the LNG plant would take advantage of infrastructure built for the crude oil terminal. Japanese companies joined the produc- ing companies in this and participated in studies. This project did not move forward because, at the time, it was judged that Asia’s LNG market, while growing, would still be too small to absorb the large volume of LNG the Alaska project would have to produce to be economic. The group also studied a smaller project to export less LNG but found it was uneconomic mainly due to the high cost of the pipeline. 2001: In 2001, the three major North Slope producers decided to take a new look at a gas pipeline to the continental U.S. through Canada.
The companies spent $150 million on the project, which established a framework for further efforts on an “all-land” alternative for a pipeline to the Lower 48. Similar to the earlier Northwest and Foothills plans the pipeline would follow the TAPS corridor to Interior Alaska and then southeast thorough the Yukon Territory to British Columbia and the continental U.S. 2003-2011: Frustrated at lack of progress by North Slope producers on a pipeline, a state gas authority was created by an Alaska voter initiative in 2002. An independent board was created and Harold Heinze, a former ARCO Alaska president, was retained as CEO. Over several years, the Alaska Natural Gas Development Authority, or ANGDA, pursued a gas pipeline and LNG project but also several concepts focused on getting North Slope gas to communi- ties in Interior and Southcentral Alaska. Initiatives included pipeline from the slope as well as other forms of energy, such as propane. ANGDA was an independent, voter-created entity. It was super- seded eventually by the creation of the Alaska Gas Development Corp., or AGDC, by the Legislature.
three producer companies worked in 2005 and 2006 with then-Gov. Frank Murkowski on the pro- posal for an all-land gas pipeline. The cost of the project was estimated at $20 billion. Significantly, this was the first effort under a formal partnership between the state and the producers. The Legislature had passed the Stranded Gas Development Act, which established the frame- work for state incentives for the project and a key element was to provide long-term “fiscal certainty” for the producers for state taxes. The idea of fiscal certainty was proposed through a contract with the producers. It was ultimately felt to be unconstitutional because of the provision in the state Constitution that no Legisla- ture can “bind” a future Legislature. This meant that there can be no guarantee that legislators in the future cannot change taxes without amendment to the state Constitution approved by voters. The ini- tiative failed when the producing companies would not move forward without the guarantee on taxes. 2007-08: Newly-elected Gov. Sarah Palin pro- posed a new plan in 2007 under her Alaska Gasline Inducement Act, or AGIA, a state initiative to grant
Gas pipeline project bids have come and gone, without success
EDITOR'S NOTE: Tim Bradner is a veteran Alaska journalist whose career spans
more than six decades and whose reporting has focused extensive- ly on Alaska politics, state government, energy, natural resourc- es and the economy. We asked him to provide an overview of the many attempts to push an LNG pipeline forward. BY TIM BRADNER ALASKA GAS PIPELINE PROJECTS HAVE BEEN PROPOSED, PLANNED AND WORKED ON FOR DE- CADES ALMOST SINCE OIL WAS DISCOVERED ON THE NORTH SLOPE IN 1968. Now here are plans again for moving the “stranded” North Slope natural gas to mar- ket. The latest proposal, by Glenfarne, is the furthest along, but hurdles remain on its fi- nances. Many ideas have been put forward over the years that have included not only pipe- lines but also gas-to-liquids plants that would convert the gas to liquid products that could be moved through the existing trans-Alas- ka oil pipeline. There are also ideas for large power plants on the North Slope that could send electricity south through direct current transmission lines were considered. Here are projects over the years: 1970: Alaskan Arctic Natural Gas, a consortium of U.S. and Canadian oil and gas producers and transmission companies, proposed a pipeline from Prudhoe Bay, on the North Slope, east to the Mackenzie River valley in Canada. Dave Harbour, an Alaska business leader, helped lead this initiative. The project would have tapped gas discoveries
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2005-06: Building on their 2001 work, the
President Jimmy Carter signed a presidential decision in 1977 endorsing the Alaska Highway alternative proposed Northwest and Foothills. Mor- ris Thompson, a prominent Alaska Native Leader, was named the Alaska Vice President for Alaskan Northwest. The project became uneconomic when U.S. gas markets were deregulated by Congress, result- ing in a drop in U.S. domestic gas prices. 1983: An Alaskan firm, Yukon Pacific Corp., or YPC, was formed to pursue a gas pipeline built parallel to the Trans Alaska oil pipeline to a site for an LNG plant near Valdez, at Anderson Bay. Mead Treadwell, who later went on to serve as Alaska lieutenant governor, led this project. YPC secured permits and did considerable work including an Environmental Impact State- ment but the project did not proceed after North Slope producers expressed doubts about its via- bility. Interestingly, CSX Corp., a major U.S. railroad, took an ownership share in YPC. 1992: After the Yukon Pacific initiative failed to advance, North Slope producers BP, ExxonMobil and ARCO Alaska initiated their own studies for the first time of moving the stranded North Slope
in the MacKenzie River delta and transported this along with North Slope gas to the Lower 48. It would have been a 4,800-mile gas pipeline from the North Slope to the Lower 48. Canada blocked this because of unresolved aboriginal land claims along the Mackenzie valley, and in 1976, Canada’s National Energy Board ruled in favor of a competing project that would follow the Alaska Highway through Canada. 1974: The first proposal for a Trans-Alaska pipe- line to Southcentral Alaska and an LNG plant came from El Paso Natural Gas. The company proposed a pipeline to a LNG plant on the Kenai Peninsula south of Anchorage. Under the plan, LNG would be shipped to the U.S. West Coast, regasified and transported by pipeline to midwestern states. El Paso failed to move the project forward, however. 1977-78: In 1977 and 1978, the Alaskan North- west Alaskan and Foothills project moved to the forefront. Proposed by Northwest Energy Corp. and Foothills Pipeline, Ltd., a Canadian firm, the pipeline would have been a built parallel to the Trans Alaska oil pipeline to Interior Alaska and then southeast through Canada along the Alaska Highway.
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ALASKA RESOURCE REVIEW SEPTEMBER 2026
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