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FERC halts review process for TransCanada's Alaska natural gas project

  • Author: Craig Medred
  • Updated: September 27, 2016
  • Published August 31, 2012

TransCanada Corp., the Canadian company funded by state subsidies to jumpstart construction of an Alaska natural gas pipeline, must decide which route the line would go before federal regulators will review the proposed project any further.

The Federal Energy Regulatory Commission said in a report to Congress this week that the review process will be halted until TransCanada figures out whether the gas pipeline would run from Alaska's Arctic gas fields to Canada (and maybe to the Lower 48), or if the line would hook up to a liquefied natural gas plant somewhere in Southcentral Alaska, with the LNG being exported.

Alaskans have long hoped for the development of the state's vast natural gas reserves at Prudhoe Bay and other North Slope oil and gas fields. Under the leadership of former Gov. Sarah Palin, the state agreed to give up to $500 million to TransCanada to pursue the project. Yet that deal has yet to yield construction, and the pipeline remains a dream.

The FERC's decision to halt the review process, reported by The Associated Press, comes almost four years ago to the day when Palin, while running for vice president, told Americans at the 2008 Republican National Convention that the state was building a "nearly $40-billion natural gas pipeline to help lead America to energy independence."

And yet, despite attempts from TransCanada to get pipeline shipping agreements from the companies with rights to develop Alaska's natural gas reserves, interest has waned in the project. That's due in large part due to the shale gas boom transpiring in the Lower 48, which has lowered natural gas prices, and thus financial interest in a giant Alaska pipeline project.

Still, four years after Palin told the nation Alaska was getting a pipeline, TransCanada hasn't given up. (Some wonder why it would when it's collected only about $180 million of the $500 million in promised subsidies from the deal Palin hashed out before resigning as governor.)

On Friday, TransCanada began another attempt to gauge whether companies are interested in shipping their gas on the proposed pipeline.

On the table are two possible routes. Both would start at the North Slope and extend to a community in Interior Alaska. But things would change significantly from there. The "all-Alaska" route, as it's sometimes called, would extend 800 miles or so from the North Slope to a tidewater location in Southcentral Alaska, such as Valdez. There the gas would be processed into liquid for shipping by oceangoing tankers.

The second option, rather than slicing down the middle of the state, would head east into Canada, maybe at Livengood, Fairbanks or Delta. It would connect with a pipeline network near the border of Alberta and British Columbia.

Perhaps when TransCanada's route inquiry ends Sept. 14, it will let FERC know which route it's going to build. Or better yet, maybe Alaska Gov. Sean Parnell, who championed the TransCanada subsidies along with Palin when he was her right-hand man, can tell Alaskans which route we're betting on, seeing as how it's state money.

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