A pipe dream: the debate continues on the gasline to mid-America. Proponents say construction could begin as early as 2008.

• Author: Bradner, Mike
• Position: Natural gas reserves on Alaska's North Slope

Thirty-five trillion cubic feet of proven natural gas reserves lie stranded on Alaska's North Slope. There's possibly a lot more--geologists think there could be 100 trillion cubic feet, or even more. The gas is stranded because there is no way to bring it to market.

For more than 30 years, the petroleum industry and Alaskans have worked on different ideas for gas transportation systems. They've tinkered with exotic notions like gas-tilled blimps and submarine tankers carrying liquefied natural gas (LNG for short), but the main focus has been on conventional technologies, a long-distance pipeline to the Lower 48 or a pipeline across Alaska to a gas liquefaction plant in southern Alaska.

There were two attempts over the years at building long-distance pipelines through Canada to the Lower 48. Both times the plans foundered because of high costs, weak prices and politics.

Four groups have worked on a north-south pipeline across the state to a site for a gas liquefaction plant in a southern Alaska port. The plan was to make and ship LNG to Asia or the U.S. West Coast. The numbers don't work, however. There is too much other gas in the Pacific Rim, right at tidewater, waiting to be developed for less than it would cost to build a pipeline and LNG plant in Alaska.

More than $1 billion has been spent over the years on marketing, engineering studies and permitting.

Now another effort is under way. For three years the major owners of natural gas reserves on the North Slope, BP Exploration (Alaska) Inc., ConocoPhillips Alaska Inc. and ExxonMobil Corp., have been working on another plan for a large-diameter, long-distance pipeline to the Lower 48.

The three companies spent $125 million in preliminary design and engineering and found the pipeline, once again, to be unprofitable. The economics were closer this time than in previous efforts, however, and it's hoped new pipeline-building technologies can further improve the numbers.

Even so, two of the three companies, BP and ConocoPhillips, are asking the federal government for federal tax support to make the project profitable enough to merit the huge investment required, up to $20 billion by some estimates. ExxonMobil, however, says it doesn't support tax subsidies for the project.

Legislation granting those incentives is now before the U.S. Congress and if the tax allowances are enacted this year, and the state of Alaska agrees next year to a separate fiscal contract all three companies are seeking, the way could finally be cleared for the construction of the giant project that runs from the North Slope to the Chicago area.

The most optimistic timetable could see work on more detailed...