Highway route gets another supporter

Posted: Wednesday, February 21, 2001

ANCHORAGE (AP) -- The owners of critical permits to build a natural gas pipeline along the Alaska Highway to the Lower 48 said Monday that the highway route offers the fastest and possibly the cheapest way to get Alaska's North Slope gas reserves to market.

''That may not be what you expected to hear,'' John Ellwood, a vice president of Calgary-based Foothills Pipeline, said after a presentation to the Senate Resources Committee in Juneau.

Under the Foothills assessment, a 1,700-mile pipeline from Prudhoe Bay to Fairbanks, then down the Alaska Highway to the pipeline grid in Canada carrying 4 billion cubic feet of gas a day would cost $7.6 billion to $9.7 billion. Such a project could be built in six to seven years.

By comparison, the assessment found that a rival 1,400-mile pipeline proposal from Prudhoe Bay to the Mackenzie River Delta would cost $11.6 billion to $13 billion. That pipeline could be built in eight to 10 years, according to the assessment.

Preliminary assessments of the possible routes have suggested that because it is shorter, the offshore Arctic pipeline would cost about 30 percent less than the highway route.

But in their description of building and operating the offshore Arctic pipeline, Ellwood and TransCanada executive Brian Blair listed a nightmare of construction obstacles, technical challenges, regulatory roadblocks and potential cost overruns.

First among all obstacles is the Arctic ice pack. Because of ice gouges and erosion, the pipe must be buried deep in the sea bed, well away from shore. That work could be done only with specialized equipment in a brief summer construction window, freighting the project with high mobilization and operating costs.

In addition, the ice would likely prohibit building any pump stations along the pipeline, meaning that the offshore route would require two low-pressure lines instead of a single pipeline.

Also, the proposed offshore route would skirt the Arctic National Wildlife Refuge and protected areas in Canada, raising the prospect of regulatory delays and route changes.

Finally, the weather and restless ice pack could shut down construction for weeks.

''If you like to go to Vegas and shoot craps, this is the route for you,'' Blair said.

Exxon Mobil, BP and Phillips Petroleum, the three big owners of the North Slope's 35 trillion cubic feet of natural gas, are spending $75 million this year on their own analysis. They expect a decision on a route late this year.

TransCanada and West Coast are independent gas transportation companies. The companies jointly own Foothills. On a question from Sen. Joe Greene, R-Anchorage, Ellwood said the two are open to working with partners.

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