Alaska Highway Pipeline Project
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Status | Benefits | Challenges | Information
INTRODUCTION
The Alaska Highway pipeline would begin at Prudhoe Bay, Alaska, parallel the oil pipeline to Fairbanks, follow the Alaska Highway through the Yukon and then continue through northeast B.C. and on into Alberta. The AHPP will carry gas to southern markets.
- Approximately 760 km, or 30% of the route, would be in the Yukon.
- The pipe itself would be 42-52 inches in diameter.
- The capacity of the pipeline would be 4.5-5.6 billion cubic feet/day
The construction and operation of the AHPP is expected to generate up to 375,000 person years (2002 Informetrica study 
536KB) of employment within the Yukon and Canada over a 24-year period, and pump billions of dollars into the Canadian and Yukon economies.
There are currently two proposals for the Canadian portion of the AHPP.
- TransCanada Pipelines Ltd. has a proposal under the Northern Pipeline Act.
- The North Slope Producers are advancing a proposal that would be regulated under the traditional National Energy Board process.
STATUS
In 2001, the North Slope Producers (BP, ConocoPhillips and ExxonMobil) completed a US $125 million feasibility study.
Since that time, there has been significant progress:
- The State of Alaska:
Proposed to take an equity position in the pipeline.
Provided provisional approval to TransCanada PipeLines Ltd. for a natural gas pipeline right of way across Alaska lands.
Reached an agreement in February 2006 with the producers on a natural gas pipeline contract. This announcement clears a major hurdle and also represents a major step forward toward the eventual construction of the AHPP.
- Key US legislation (signed off by President Bush in October 2004) provides the following:
An accelerated rate of depreciation on the pipeline.
A tax credit for a gas conditioning plant on the North Slope.
Loan guarantees of $18 billion for the construction of a pipeline.
Expedited regulatory review in the U.S.
Bans the proposed 'Over-the-Top' route.
The Yukon government is continuing its preparation in advance of construction.
BENEFITS
The potential benefits to the Yukon of the AHPP are many.
- The pipeline would help us to ensure our gas reserves are not stranded.
The Yukon has eight sedimentary basins, and adding Yukon gas to the pipeline would stimulate economic development in the territory.
- Yukon access to natural gas from the pipeline.
Supplying natural gas energy to residential, commercial and industrial sectors in the Yukon will also advance northern development.
Other benefits include:
- Employment
Occupations in particular demand will include those in the construction, transportation equipment, fabrication, assembly, machining, sales and service, clerical, natural sciences and engineering and managerial areas.
Jobs in natural gas exploration and development with companies involved in developing other projects.
Over the longer term, employment in the Yukon would increase by between 1,000 and 2,000 jobs per year. (2002 Informetrica study 536KB)
- Education and training
Because skilled labour will be required for the project, opportunities will be available for education and training in project-related occupations.
- Business opportunities
Construction, transportation, manufacturing, communication and utilities, business services, accommodation and food, and other services.
- Increased government revenue
Yukon's GDP, or economic output, would increase by an average of 30% over the construction and operation period.
CHALLENGES
While the benefits to the Yukon are many, challenges also remain.
- Regulatory certainty in Canada.
The Government of Yukon is working with industry, First Nations and the federal Government to address this issue.
- Capacity for Yukon preparedness.
Yukon is working to ensure all parties, including First Nations, have the resources necessary to actively participate in northern pipeline development.
INFORMATION
For further information on the economic impact of the construction and operation of the proposed Alaska Highway Pipeline Project on the Yukon, provincial and Canadian economies, please refer to the following document.
The Alaska Highway Pipeline Project: Economic Effects on the Yukon and Canada - April 2002 (Informetrica Limited):
http://www.emr.gov.yk.ca/pdf/informetrica_econreport_02.pdf
Last Updated 21-03-2006