Fuel for the future.

• Author: Stricker, Julie
• Position: North Slope, Alaska's natural gas

The North Slope houses the nation's most bountiful supply of natural gas, which could one day fuel Alaska's economy. But accessing it is a challenge.

The largest deposit of natural gas in the United States lies under the North Slope. For the past 20 years, corporations have tried to find a way to tap that resource and export it to markets in the Lower 48 and the Far East, but without success.

Why hasn't it worked? To put it simply, no one has found an economic way to get the natural gas to the marketplace.

A state study of one proposed project, which included a gas conditioning plant on the North Slope, a pipeline to a terminal with a liquefied natural gas plant in Valdez, and 12 to 15 tankers to ship the product to the Far East, put a price tag of $12 billion to $15 billion on the project. Too expensive, the oil companies say.

A viable project would require a host of factors in its favor, says Bob Davis, spokesperson for Exxon Corp., one of the three major natural gas leaseholders on the North Slope. First, it would require favorable market conditions, significant cost reductions in producing and transporting the gas, and fiscal and regulation changes, such as the tax and royalty structure in Alaska.

More Fuel for the Economy

Oil companies are already using some of North Slope's natural gas in oil production, reinjecting the byproduct of oil extraction into the wells to increase the pressure, enabling them to pump more oil.

But there's much more to be had. The known resource is huge - 35 trillion cubic feet of gas on the North Slope. John Miller, engineering manager for the Alaska North Slope LNG Project, prefers to look at it as a resource with the volume of one million Empire State buildings or 22 million Arco buildings.

Once a solution for economical gas development is found, Alaska may bask in another economic boom, says Wayne Lewis, vice president of Yukon Pacific Corp., an Anchorage-based subsidiary of transportation giant CSX Inc.

"(There will be) lots of construction jobs for five to seven years just building this beast, and ongoing revenue for the State of Alaska once production begins," Lewis says. The project could potentially add about $400 million a year to the state Treasury budget over its 50-year life span, according to Lewis. That's not counting undiscovered gas deposits.

LNG and GTL Methods

There are two ways to process the natural gas. Getting the most study is a LNG process in which natural gas is cooled until it...