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June 18: Fairbanks Daily News-Miner on an Alaska-Canada gas pipeline:

Posted: Thursday, June 22, 2000

Arctic Resources Co., a Houston-based outfit, is courting investors for its proposal to deliver North Slope gas to market via an undersea pipeline to the Mackenzie River Delta in Canada.

Industry may be attracted by the economies of scale resulting from linking a pair of huge, as yet undeveloped, Arctic gas basins and bringing the product to the Lower 48 in a single pipeline crossing Canada's Northwest Territories.

It's true, Alaska collects nothing so long as North Slope gas remains out of reach from potential buyers. A pipeline feeding Alaska gas to market by way of the Mackenzie Delta could pump a few dollars into the state treasury.

In other respects, however, the Houston group's plan represents the worst-imaginable gas commercialization scenario not only for Interior residents, but for the Alaska economy as a whole.

Pipelines delivering North Slope gas to Valdez, or Nikiski, even the proposal for delivering gas to the Lower 48 via the Alaska Highway, all share the common benefit of giving Interior energy consumers a direct connection, presently lacking, to the clean-burning fuel. The Mackenzie route cuts this entire region off from its most likely source of cheap natural gas.

Any pipeline project aimed at delivering gas to Valdez or Nikiski or the Lower 48 by means of the Alaska Highway route, is guaranteed to put Interior residents to work during construction.

The same isn't necessarily true of a Beaufort Sea pipeline to Canada, particularly if the project, as the Houston group suggests, is financed with participation from Native communities in the Northwest Territories. Such partners would likely seek job commitments for their own members as part of the package.

On this basis alone, Alaska contractors and Fairbanks union members ought to think twice before embracing the Mackenzie plan simply because it suits some segments of the oil industry.

BP Exploration and Exxon-Mobil officials have been studying methods for converting natural gas to synthetic oil and other chemicals, eliminating any need for a special gas pipeline. Current conversion techniques are experimental and inefficient, raising the possibility an unacceptable portion of Alaska's gas resource will be wasted through the process. But gas-to-liquid conversion at least holds potential for extending the life of the trans-Alaska oil pipeline by boosting the volumes flowing down the line to Valdez.

The Mackenzie plan lacks even that small boon for Alaska.

Officials in Juneau and in Washington D.C. should oppose this project on every level.



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