Posted on 03/27/2003 10:32:19 AM PST by cogitator
WASHINGTON -- A plan to tap huge energy resources in Alaska to head off shortages in the rest of the United States is being revived in Congress. But this time, the energy is natural gas, not the protected and contested oil reserves of the Arctic National Wildlife Refuge.
Alaskan legislators and two major oil companies are asking Congress to underwrite part of the estimated $20 billion cost of building a 3,600-mile pipeline connecting Alaska's North Slope with the U.S. heartland.
The project could deliver as much as 4.5 billion cubic feet of gas daily -- equal to 8 percent of today's U.S. gas production -- to the Midwest after completion in 2012.
The project has been almost ignored in public debate, compared with the furious battle over opening the Arctic refuge. The Bush administration fought for the refuge venture, which was shelved by the Senate earlier this month. It has not made the pipeline a top priority.
But experts say the Alaskan gas may be far more important to the nation's energy future than Alaska's oil would be if gas production from wells in the lower 48 states continues to fall off. Gas is the fuel of choice for new power-plant construction and an essential home-heating source.
ConocoPhillips Co. and BP LLC, which own two-thirds of the natural gas on Alaska's North Slope oil fields, say they are ready to begin the project -- but only if Congress approves a package of tax incentives that limit the financial risk of the mammoth venture.
Although the Senate approved the project last year, it died when Congress failed to enact energy legislation in December. And despite the passionate backing of Alaska's Republican senators, Ted Stevens and Lisa Murkowski, the project's chances now are in doubt as the Senate Finance Committee prepares to consider it again next week.
The gas itself is there for the taking, mixed in with the oil pumped from beneath the North Slope and shipped south on the Trans-Alaska pipeline. Today, the gas is separated from the oil and injected back underground.
The gas pipeline would carry the gas south, paralleling the oil pipeline to Fairbanks, Alaska, then head through Canada to the United States -- a route mandated by the Senate last year to secure the greatest possible number of construction jobs for Alaskans.
Stevens and Murkowski are proposing about $700 million in federal support for the pipeline, including a federal loan guarantee and several tax credits.
Order of magnitude cost for a double track rail connection would be $3-5 billion.
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