whither the alaska highway pipeline

If you've been waiting to cash in on the proposed Alaska Highway natural gas pipeline, you might want to dust off your Plan B.

If you’ve been waiting to cash in on the proposed Alaska Highway natural gas pipeline, you might want to dust off your Plan B.

Recent rumblings from oil executives and Alaskan politicians give every indication the pipeline through the Yukon will never come to be.

It’s not that the oil giants have lost interest in tapping northern gas reserves, it’s just that they’re now lining up with the Alaskan government and it recently decided it prefers an all-state pipeline. Such a line would carry North Slope gas to a plant in central or southern Alaska where it would be turned into liquefied natural gas and shipped to markets in Asia.

“The Asian market is a better option for Alaska’s natural gas than a pipeline to the Lower 48,” ConocoPhillips spokesperson Natalie Lowman told the News last week.

BP also said it favours the LNG proposal over a pipeline down the Alaska Highway.

As for TransCanada, the Canadian company preparing to build the proposed line, it’s at the mercy of the oil companies.

“At the end of the day, the key thing here is we need customers in order to do either project,” said its spokesman.

Until a decision can be made one way or the other, TransCanada plans to forge ahead as if nothing has changed, as if the Alaska Highway option is still a possibility.

These days the natural gas market isn’t exactly great. The price has been in the doldrums for a few years. It’s about $2.50/million BTU now, which is huge drop from the $10 or so of a decade ago, which renewed interest in Arctic gas at the time.

With the recent proliferation of shale gas to feed the hungry North American market, any big change in the price doesn’t seem to be in the cards.

Although the Yukon government said it’s watching the Alaska pipeline project closely, it’s not yet ready to admit that the territory has been jilted again.

Yukoners have been dreaming about the proposed Alaska Highway gas pipeline since the 1970s.

Back then a route was chosen, hearings were held and preliminary work got underway. Times were good and everyone was going to get rich. Then prices fell and the project was put on the back burner.

By the late 1990s, oil companies started eyeing up Arctic gas once again. Prices were on the rise and both the Alaska Highway proposal and the Mackenzie Valley project were revived.

Millions of dollars and thousands of hours have been devoted to both proposals by governments ever since.

About 670 kilometres of the 2,762-kilometre Alaska Highway pipeline, from Prudhoe Bay to Alberta, would run through the Yukon. At an estimated cost of between 32 and 41 billion dollars, the economic impact on the Yukon alone would be enormous.

The only trouble is, for the second time running, it looks like it will never come to pass.

So go back to the drawing board and don’t quit your day job.

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