Issues Relating to the Proposed Alaska Highway Gas Pipeline Project

EMD-80-9: Published: Oct 26, 1979. Publicly Released: Oct 26, 1979.

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The President and Congress approved the Alaska Highway Gas Pipeline Project as a privately financed project. GAO considered the project and recommended that a framework for Government analysis be established if Federal financial assistance were requested.

If Federal financial assistance were sought for the project, alternatives which could secure or conserve a similar or greater amount of gas should be considered. Potential alternatives would include conservation steps, intensified drilling in the lower 48 States, liquefied natural gas, Mexican and Canadian gas, and unconventional domestic resources. The pipeline project has been delayed and further delays are possible. Key issues concerning right-of-way agreement requirements and how the gas conditioning costs will be treated have yet to be solved.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: The Congress should not consider Federal financial involvement until all regulatory procedures are completed and the sponsors show conclusively that the Project cannot be financed privately. Should financial aid for the Project be requested, the Congress should evaluate alternative sources of natural gas as well. If the Congress decides to grant financial aid, it should evaluate all feasible alternatives for Federal financial involvement (not just loan quarantees).

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Energy should, within 60 days from the date of this report, provide the Congress an analysis showing how this Project now fits in with the overall national energy plan and strategy to satisfy the Nation's future energy needs. Items included in this analysis should include, for the Project and each feasible alternative, detailed information on the amount of gas that would be supplied, the timeframe for delivering the gas, costs, and the impact of U.S. reliance on foreign energy and international implications. In addition, if the sponsors officially state that the Project cannot be privately financed or if Federal financing assistance is requested, the Secretary of Energy should provide the Congress, within 90 days of such occurrence, his recommendation on the matter of Federal financial involvement. The Secretary should provide a detailed analysis of the Project and alternatives which could secure or conserve a similar or greater amount of gas or equivalent amount of energy. The Secretary's analysis should: demonstrate why his recommendation is the best course of action, and compare the benefits that each source could provide if it received the same amount and type of Federal financial assistance or an amount approximating that requested for the pipeline.

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