I. INTRODUCTION

The Alaska Natural Gas Transportation System (ANGTS) may serve as a prototype for this Nation's proposed "fast track" energy projects. The ANGTS is an ambitious undertaking. Its

$15 billion proportions alone serve to support its number one standing within Federal agencies, taking regulatory and administrative precedence over all other projects. The Congress has focused its attention on the system on five separate occasions since 1973, giving the concept form, defining the Federal role, and providing a regulatory climate suitable to a one-of-a-kind project of this magnitude. The executive branch of the Federal government has been equally active: it negotiated a treaty with Canada which was formalized in 1977, the President referenced his full support of the project in a televised energy speech, and then the executive branch effected a limited reorganization of the government to provide a Federal focal point for regulating construction and operation of the pipeline.

This report will trace the progress of this energy project, identify the participants and their responsibilities, and discuss issues which are yet to be resolved.

The Alaska Natural Gas Transportation System is currently in its design and engineering phase. When operational, the pipeline will transport natural gas 4,787 miles from Prudhoe Bay on the North Slope of Alaska, across the Canadian frontier

to a point near Calgary where it will split into two lines
going into the lower 48 states, one toward the West Coast and
the other into the Midwest. The pipeline will be capable of
transporting 2.4 billion cubic feet of gas per day (bcfd) with

a built-in expansion potential to 3.4 bcfd. The cost to construct
the system is estimated to be $15 billion in escalated dollars,
1984 dollars, with a completion target date of November 1984.
The Prudhoe Bay field is estimated to contain 26 trillion
cubic feet (tcf) of natural gas. By comparison, the total
proven U.S. gas reserves (non-Alaskan) are estimated at 185 tcf.
The annual rate of consumption of natural gas within the U.S. is
19.9 tcf (1977). Therefore, at peak production the ANGTS could
deliver 6 percent of the nation's natural gas requirements from a
reserve that represents more than 10 percent of the known U.S.
supply of natural gas.

For planning and construction purposes the ANGTS is broken down into four sections, or legs. Although each leg has its own

sponsors, contracts, and construction schedules, the system is statutorily a single entity with close coordination both internationally and among the corporate sponsors.

A. Alaskan Leg

It

The Alaskan Leg will consist of 741 miles of pipeline. will parallel the Trans-Alaska oil pipeline from Prudhoe Bay to

a point south of Fairbanks where it will turn eastward and follow the Alaska Highway and the Haines oil products pipeline right-of-way to the Alaska/Yukon Territory border near Border City, Alaska.

Plans call for a buried pipeline carrying chilled gas at 1260 pounds per square inch (psig) pressure through 48-inch diameter pipe. It is estimated that the Alaskan Leg will cost $6 billion in escalated dollars (a figure which includes finance charges on funds used during construction or AFUDC) to construct. The sponsors of the Alaskan Leg are a consortium of six gas transmission companies, with Northwest Energy Company of Salt Lake City, Utah, acting as the managing partner. The consortium is called the Alaskan Northwest Gas Transportation Company and is composed of Northwest Energy Company, Panhandle Eastern Pipeline Company, Northern Natural Gas Company, United Gas Pipeline Company, Pacific Lighting Corporation, and Pacific Gas and Electric Company.

Efforts

are being made to have other gas transmission companies join this consortium. Current projections by the sponsors indicate that this

leg will be operational by late 1984.

B. Canadian Leg

The Canadian Leg will travel 2,028 miles from the Alaska/Yukon Territory border, parallel to the Alaska Highway, through the Provinces of British Columbia and Alberta to a point near Caroline Junction, Alberta. There the pipeline will split into the Western Leg which will enter the United States near Eastport, Idaho, and the Eastern Leg which will cross the international border at

Morgan, Montana.

The design and diameter of the Canadian Leg will vary according to need. Plans call for a buried line using 48-inch diameter pipe from the Alaskan border to Whitehorse, Yukon, where the pipe diameter will increase to 56-inches. This enlargement is intended to accommodate possible future Canadian gas sources in the Beaufort

Sea through the use of a proposed Dempster Highway Lateral pipeline which will connect to the ANGTS at Whitehorse. The pipe dimensions will again change south of Caroline Junction, Alberta, by employing 36-inch diameter pipe for the Western Leg and 42-inch diameter

pipe for the Eastern Leg.

The sponsoring consortium of the Canadian Leg is called Foothills Pipe Lines (Yukon) Ltd.

Foothills is the parent organization

of five subsidiary companies which will construct and operate the line. The Alberta Gas Trunk Line Company owns 50 percent of the outstanding shares of stock in Foothills. The remaining 50 percent is owned

by Westcoast Transmission Company Limited.

The Western Leg will carry the Alaska North Slope gas 911 miles from the international boundary near Eastport, Idaho, through the states of Washington and Oregon and into California where the line will terminate at Antioch near the San Francisco Bay. This leg is the most conventional of all the ANGTS sections in design, construction techniques, financing, and tariff provisions. It is a full paralleling or "looping" of an existing natural gas pipeline owned and operated by the Pacific Gas Transmission Company (PGT) through Idaho, Washington, and Oregon, and the Pacific Gas and Electric Company (PG&E) in California. PGT is a 53 percent owned subsidiary of PG&E and these two companies will jointly sponsor, finance, construct and operate the Western Leg.

Approximately 883 miles of new, 36-inch diameter pipe will be installed alongside an existing pipeline. No new compressor stations will be required to maintain an operating pressure of

911 psig. Through interconnection with other transmission companies, the Alaskan gas will reach markets throughout the Pacific Northwest and the Rocky Mountain States. A segment of this Leg is expected to be operational in late 1980.

D. Eastern Leg

The Eastern Leg will transport gas from the Saskatchewan/ Montana border near Morgan, Montana, for 1,117 miles across North Dakota, South Dakota, Minnesota, Iowa and into Dwight, Illinois, south of Chicago.

The 42-inch diameter pipeline will carry gas at a pressure of 1435 psig to markets throughout the Plains states, the Midwest, the South and the Eastern Seaboard through the existing transmission systems of various partners in the Northern Border consortium. The consortium consists of Northern Natural Gas Company of Omaha, Nebraska, the managing partner, Northwest Energy Company, Panhandle Eastern Pipeline Company, United Gas Pipeline Company, and TransCanada Pipelines, Ltd.

TransCanada is the largest gas transmission company

in Canada. When the firm joined the Northern Border consortium in October 1979 it became a 30 percent equity partner and agreed to secure the entire debt structure of the Eastern Leg through Canadian markets. The sponsors of this Leg plan to have a portion of it operational in the fall of 1981.

III. BACKGROUND

The term "Prudhoe Bay" became linked with domestic energy resources in 1968 with the first big oil strike on the North Slope. The Prudhoe Bay field is about 18 miles wide and 45 miles long