Expanding use of Alaska’s oil pipeline

The federal government of Canada has abandoned the Mackenzie River Gas Pipeline. Ottawa’s refusal to make their agreed-upon investment is undeniable proof of the project’s failure. This event presents a unique opportunity for Alaska and Alaskans to connect the Mackenzie River oil and gas reserves to Prudhoe Bay for transportation down our trans-Alaska oil pipeline and an Alaska natural gas transportation system.

The originally planned Prudhoe Bay-to-Mackenzie gas pipeline was completely engineering and permitted by the Canadian authorities. A full environmental review was completed. The gas-gathering system, Mackenzie Gas Project, can collect oil and natural gas and natural gas liquids from the Niglintgak, Taglu and Parsons Lake natural gas fields and other oil and natural gas fields yet to be determined and transport that oil and gas to Prudhoe Bay. It appears to be a “shovel-ready” project.

ExxonMobil, in partnership with its Canadian affiliate Imperial Oil, ConocoPhillips and BP, originally planned the 223-mile long Mackenzie River Delta route to bring Alaska North Slope gas to market. With the demise of the Canadian pipeline, reversing the flow from the Mackenzie River and running the oil and gas for processing at Prudhoe Bay becomes a priority, with a century of long-term benefits to the United States, Canada and Alaskans.

The cost savings alone of building a double-saddle line for oil and later gas is in the tens of billions of dollars. It is the conclusion of the Alaska Institute for Growth that the oil and gas producers who will benefit from these savings in Canada and in Alaska should support this consolidation.

Building one oil pipeline of 223 miles and one gas pipeline to connect to the Prudhoe conditioning plant results in equally large savings to the environment for the pristine areas south of Inuvik, Northwest Territories, through the entire Mackenzie River route. The international environmental community should support this consolidation as a savings of rustic wilderness in North America.

The economy of scale of providing a private, economically viable transportation system for all the Arctic stranded oil and gas is especially appealing to investors. Those investors are ready to act quickly to take this opportunity. In that regard, the Mackenzie to Prudhoe Oil and Gas Pipeline Project, as an Alaska limited liability company in formation or C Corporation, plans to apply for a Federal Energy Regulatory Commission, or FERC, certificate of convenience for the connection project and is seeking the assistance of Alaska’s Congressional delegation in completing the requirements therefore. Further, the investors are seeking the cooperation and advocacy of the Trump administration and the Department of State for international cooperation and approval.

The investors are committed to own and operate the oil and gas pipelines from Mackenzie to Prudhoe. The investors can bring this new set of pipelines to connect with the Trans Alaska Pipeline System and the Alaska-sponsored AGIA gas project. This project does not conflict with the AGIA project. This project complements and enhances feasibility of each of the other pipelines.

The investors intend to negotiate with the producers in Canada to purchase the plans, specifications and permits already in hand to build the northern portion of the route from Inuvik to Prudhoe Bay. Project leaders are exploring the possibility of a pre-build of that portion of the overall oil and gas transportation system and expect to make that determination shortly.

The Alaska Institute for Growth believes these pipelines to be financially feasible and capable of proceeding without subsidies from the state of Alaska. AIG supports the projects and will provide concrete assistance in explaining the scope and depth of the cost savings and environmental advances of these projects to the Trump administration and to the Trudeau administration in Canada.

Jim Crawford is a third-generation Alaska entrepreneur and recent Alaska House candidate who lives in Anchorage with his bride of 35 years, Terri. The Alaska Institute for Growth is a local think tank that studies and reports on, and may sponsor, projects of sustained economic growth for the Alaskan economy.

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