Canadians to build Alaska Gas Pipeline.

• Author: McCorkle, Vern C.

Many Alaskans may not know that following the requisite Alaska Highway route places two-thirds of the Alaska Natural Gas Pipeline in Canada.

Why governors, legislators or producer companies have not informed Alaskans of this prompts interesting conjecture. Alaska Business Monthly first reported it in the February 1998 issue. Truth be told, international treaties between the U.S. and Canada settled the entire matter more than a quarter of a century ago when Alaska's great friend, President Carter, signed the protocols.

A 1973 law (the trans-Alaska Pipeline Authorization Act-TAPAA) and a 1976 law (the Alaska Natural Gas Transportation Act-ANGTA) both mandate that any gas pipeline must be congruent to the recognized transportation route of the trans-Alaska oil pipeline and the Alaska Highway. Then in 1977 the U.S. and Canadian governments signed a bilateral agreement identifying the Alaska Natural Gas Pipeline System (ANGTS) as the approved project naming Calgary-based Foothills Pipe Lines Ltd. to transport Alaska gas to Canada and the Lower 48.

The Canadian National Energy Board (NEB) and the U.S. Federal Energy Regulatory Commission (FERC) ratified those arrangements and in 1978 the Canadian Parliament signed the Northern Pipeline Act. Later that same year the Northern Pipe Line Agency was established to oversee the project. The NEB and FERC certified the Canadian and U.S. segments of the pipeline and signed a transit treaty providing for non-discriminatory transportation of gas and oil between the two countries, to this day. Notably, both governments at the time rejected a route across Alaska's North Slope and up the Mackenzie River.

ALL OF THE ABOVE NOTWITHSTANDING

While the historic accounts set forth above legislate, they do not appropriate-yet!

Top industry leaders have lectured time and again that Alaska's natural resources will never be brought to market unless or until producers could find an economical (read that "low cost") means of bringing gas to the consumer at a price they can afford to pay.

Producers have signaled that a pipeline is not currently economic absent inducements. Depending upon which route, construction estimates between $7 billion and $20 billion have been made together with assertions that figures in the upper reaches are far too uneconomical for producers to consider. And they have completed a $1.25 million study to prove that point.

Long-time industry watchers speculate that construction costs of any of the...