Planning and Construction of the Trans-Alaska Pipeline

Lessons learned from the experience of building the Trans-Alaska Pipeline will be useful for the proposed building of a gas pipeline by the Alcan consortium from Alaska through Canada to the lower 48 States. Alyeska Pipeline Service Corporation acted as the common agent for the eight companies involved in the pipeline system. Costs of building the Trans-Alaska Pipeline were grossly underestimated. Estimates for costs were low because of lack of past experience and low contingency allowances. Planning was based on minimal site data and unrealistic assessments. These same problems will be encountered by Alcan. Some escalating costs may have been avoided with fixed-price contracts, more systematized budgetary controls, and government auditing of costs during rather than after construction. There was no evidence to support claims that Government environmental requirements during construction caused significant delays. Present data may be insufficient to judge the economic feasibility of the proposed pipeline. This should be weighed carefully in view of expected pressure for guaranteed financing of project costs and for rolled-in pricing of the delivered gas.