Pipe Down: Alaska May Get a Gas Pipeline, Just Not the Big One

By Russell Gold
Wall Street Journal
April 17, 2009

Just a couple days after Alaska Gov. Sarah Palin talked up natural gas, while apparently moderating her stance on global warming, she received an unexpected present from her state legislature.

Gas, please (AP)

Juneau is buzzing about a last-minute addition to the state’s capital budget giving Gov. Palin funds to push ahead on a small pipeline to bring gas from the North Slope down to Fairbanks and Anchorage, where most Alaskans live.

Alaska is in a pickle. There’s a lot of natural gas on the North Slope, but very few people live up there. There’s some gas in Cook Inlet, near the population centers, but that is running out.

The big oil producers on the North SlopeBP and ConocoPhillips in particularare backing a plan to build a very large pipeline to move the gas all the way down to the Lower 48 states. But plans for this $30 billion project are stalled for many reasons, not least because gas prices are low and expected to stay that way for some time.

Meanwhile neither the BP/Conoco pipeline nor a competing proposal from TransCanada are moving forward quickly and the two projects can’t find common ground to join forces.

Against this backdrop, it seems at times that Alaskans will never be able to use their world-class gas deposits to, say, heat their homes, something that is kind of important up there.

But if the legislature revives plans for a bullet pipeline, it would be a victory for Gov. Palinand a setback for the companies that want to pursue the giant pipeline.

Alaskans want the jobs a giant pipeline would create and the revenue developing gas reserves would mean for the dwindling annual checks Alaskans receive. But they need more gas within a decade, or it could get awfully cold up there.