Alaska's Gas Pipeline Nearly Three Decades In the Making.

• Author: KANE, ROGER

Since the discovery of North Slope petroleum reserves in 1968, presidents, governors and oil companies alike have dreamed of cashing in on the vast stores of natural gas trapped thousands of feet beneath the tundra.

Known reserves of natural gas in the Prudhoe Bay fields top 35 trillion cubic feet, with estimates that as much as 150 tcf lie in wait in the surrounding area.

For years, North Slope gas has been treated as a byproduct of crude oil and has been re-injected into oil wells to keep wells pressurized and force oil out of them; the gas is now coveted as a clean-burning, plentiful, inexpensive fuel source. But it is stranded on the North Slope.

Natural gas is fast becoming the fuel of choice for residential and industrial applications in the Lower 48. Between 1995 and 1999, natural gas consumption in the United States topped 21 tcf each year. For the same time, supplies of natural gas hovered around 25 tcf each year.

Industry experts predict the demand for natural gas in the Lower 48 will climb this year and continue to tax already tight supplies.

"We are experiencing a long-term erosion of supply," according to Ed Kelly, director of research for Cambridge Energy Research Associates. CERA has offices in Cambridge, Mass.; Washington, D.C.; Oakland; Calgary; Mexico City; Paris; Oslo; Moscow; Sao Paulo; Beijing; Seoul; and Bangkok.

Kelly was in Anchorage for the first meeting of the Alaska Natural Gas Policy Council in February. The council was formed by Gov. Tony Knowles to determine the best way to promote and construct a gas pipeline that will stretch from Prudhoe Bay to the Lower 48.

"There is a hunger for natural gas in the Lower 48," Kelly said. "And there is uncertainty about supply."

If the economy continues to grow at the same rate it has for the last 10 years, Kelly said the U.S. will consume an estimated 30 tcf of gas a year by the end of the decade. He said a natural gas pipeline from Alaska to the Lower 48 would go a long way toward supporting that level of consumption.

Pipeline Dreams 27 Years Old

The first company to apply for Federal Energy Regulatory Commission, Department of the Interior and Canadian approval of a pipeline project, was the Alaskan Arctic Gas Pipeline Co.

In March 1974, Alaskan Arctic proposed building a 48-inch, 3,700-mile pipeline from the North Slope to the Mackenzie River Delta of Canada's Northwest Territory. This system would move Alaska gas through the natural gas-rich Mackenzie Valley, south through Alberta, where it...