The Alaska Contractor - Summer 2008

pen as fast as Alaskans want,” he said
of an operable gas pipeline.
Persily cites the carrot and stick
scenario of rising costs as one reason
for hesitancy in pursuing a pipeline.
As fuel prices go, so goes the price of
construction materials and the risk of
cost overruns.
Steel prices have risen 50 percent
since December, he said. The proposed
gas line would require five million tons
of steel, 10 times the amount used during
construction of the oil pipeline.
Length of the gas line would be
more than twice that of the 800-mile
oil pipeline from Prudhoe Bay to Valdez,
and more than twice as thick, he said.
Natural gas pipelines operate at
high pressure – 2,500 pounds per
square inch according to TransCanada’s
proposed $26 billion Alaska Highway
Pipeline Project – and could flow
through the pipeline at speeds of up to
25 miles per hour.
Persily estimates it will be 2018
before gas begins flowing from the
North Slope. That coincides within a
year with both the TransCanada and
BP/ConocoPhillips proposals.
Top Ten Fields
Field Name Location
2006
Estimated
Production Discovery
Value Year
1. PRUDHOE BAY AK 92.1 1967
2. WASSON TX 24.7 1937
3. BELRIDGE SOUTH CA 38.9 1911
4. MISSISSIPPI CANYON BLK 807 FG 61.6 1989
5. SPRABERRY TREND AREA TX 24.2 1949
6. KUPARUK RIVER AK 45.5 1969
7. MISSISSIPPI CANYON BLK 778 CA 0.0 1999
8. MIDWAY-SUNSET CA 39.6 1901
9. ELK HILLS CA 17.21 1919
10. KERN RIVER CA 30.8 1899
Step by step
Laying the groundwork is crucial in
avoiding delays in a lengthy gas pipeline
process – from design to the first
flow of gas.
Permitting and reviews could take
months if not longer. Rinehart said it’s
beneficial to begin the permitting process
early in order to identify potential
problems sooner rather than later.
The permitting phase includes
submittal of applications for an U.S.
Environmental Impact Statement and
Canadian Environmental Impact Assessment.
The primary goal is acceptable
National Environmental Policy
Act/Canadian Environmental Assessment
Act decisions and receipt of Federal
Energy Regulatory Commission/
National Energy Board approvals, according
to the “Project Summary for a
Proposed Gas Pipeline Project” paper
developed by BP, ConocoPhillips and
ExxonMobil in 2006.
Timing is everything
BP’s Rinehart said he believes the
timing is right to move ahead with a
gas pipeline – for a couple of reasons.
Increases in gas prices and a strong
market are good reasons to forge
ahead, but marketing gas could help
keep Prudhoe Bay’s giant, expensive
infrastructure running, Rinehart said.
The press officer said he believes
marketing the North Slope gas could
prolong the life of the oil field as much
as 50 years.
Oil production is said to be declining
by 6-7 percent a year, Rinehart said.