Alaskan Pipeline: Most expensive US infrastructure project?

Alaska has vast energy reserves

America is no stranger to expensive infrastructure projects - the Hoover Dam for example cost $50 million in 1931 (that would be $700 million today) and the currently under-construction 'Big Dig' is projected to cost $14.6 billion - but a plan to build a gas pipeline from the Arctic Ocean to Alberta could cost as much as $40 billion.

If finished, the pipeline would stretch 2000 miles and would ease gas supplies to households both in the US and Canada. As if the project wasn't complex enough, two separate consortia are competing to implement their separate projects, meaning that there is the possibility that two pipelines could be made, meaning a investment of possibly $80 billion.

The two groups, one composed of TransCanada and ExxonMobil and the other of BP and ConocoPhillips (called Denali), are of course aware of the money to be made in gas discovery and distribution, but there is the question whether there are enough reserves to justify both pipelines. As such, it is more likely that only one will go ahead. The question is which...

Currently, both groups are still to line up firm commitments from customers and suppliers in a process called "open season" to analyze the feasibility of building the pipeline. Of course, the State of Alaska will have to approve any plans before construction begins, as will the Federal Energy Regulatory Commission, but with former Alaskan governor Sarah Palin still promoting her "drill, baby, drill" initiative, President Obama's recent U-turn on offshore drilling and America's need for greater energy dependency, there is a high chance it will be green-lit.

Large reserves

While there are large reserves of natural gas in Alaska's Prudhoe Bay, increased interest in gas production from shale gas could potentially see the pipeline's life expectancy double. While the North Slope in the Arctic Circle is estimated to have reserves of 35 trillion cubic feet of natural gas, the United States still imports approximately 4.5 trillion cubic feet of gas a year and that is only a fifth of the country's total consumption.

Any new pipeline in Alaska would enable the extraction of these resources, providing a gas version of the trans-Alaska Pipeline System that transfers gasoline from Prudhoe Bay to Valdez. Seeing as the North Slope is extremely remote and in some of the harshest conditions in nature, a pipeline would make sense over using tankers and rigs, and if shale gas production increasing potential reserves to 3000 trillion cubic feet, then the investment and high price tag may be worth it.

The question is who secures the backing first and whether approval is given by the authorities given the possible ecological damage it could cause.

Image from Gasline.org

Relevant articles:

143 years of Alaska | Obama green lights offshore drilling? | Renewable Recovery

Timon Singh

Timon Singh is a graduate of Liverpool University where he received a degree in Social and Economic History. He has previously worked for BBC Magazines on BBC Who Do You Think You Are? Magazine, the publication for the popular genealogy show.

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