Any project as large and complex as a multibillion-dollar natural gas pipeline from Alaska's North Slope will require numerous federal, state and local permits just to begin construction. The goal of constructing a pipeline to move gas from the North Slope has been around since the 1970s, and a lot of progress has been made in the past three years toward permitting a 48-inch-diameter gas pipeline from the North Slope to the Canadian border to feed North American markets.
However, the Lower 48 states currently are oversupplied with gas and the project sponsors are looking at possibly more financially attractive options to bring Alaska gas to other markets, most notably Asia. Regardless which project moves forward, this web page will serve as a guide to the National Environmental Policy Act and permitting efforts for an Alaska gas line project.
In 2004, Congress passed the Alaska Natural Gas Pipeline Act of 2004 which, to help expedite the permitting process, made several NEPA decisions up front for a gas pipeline from Alaska's North Slope to the Canadian border. To learn more about NEPA, click here.
The decisions in the 2004 pipeline act include:
- Mandating a single environmental impact statement for the gas pipeline project.
- Designating the Federal Energy Regulatory Commission as the lead federal agency responsible for preparing the project's environmental impact statement. The project also would require a FERC-issued certificate of public convenience and necessity under the Natural Gas Act.
- Requiring federal agencies to work collaboratively with FERC during development of the environmental impact statement and to rely on that review for their own project approvals. Collaboration among federal agencies for this project is intended to ensure that the EIS is sufficient for each agency's unique needs, averting any additional work later in a supplemental document.
- Setting deadlines for the environmental impact statement and FERC certificate.
- FERC must publish its draft impact statement 12 months after determining that the project application is complete.
- FERC must issue the final environmental impact statement six months after the draft.
- Within 60 days of publishing the final impact statement, FERC must decide whether to issue the project certificate.
In 2006, 16 federal agencies with roles and responsibilities relating to the pipeline project signed a memorandum of understanding, establishing a framework for cooperation on the project. Other relevant agencies were identified and added to the memorandum in 2010. Read the memorandum here. The memorandum is intended to encourage continual agency interaction, such as monthly interagency meetings to discuss project status and other ways to identify potential permitting issues that could arise.
In an effort to educate the public about NEPA and the permitting process, the Office of the Federal Coordinator prepared a matrix of the major federal permits that may be required for an Alaska gas pipeline project. The office collected information from statutes, regulations, guidance materials and agency personnel to clarify the requirements of each permit or agency approval in the context of the FERC application, review and approval process. The matrix focused on a pipeline to serve the Lower 48 states. As the project developers have set aside that pipeline option while reviewing the alternative of a liquefied natural gas export project to Asia, the Federal Coordinator has revised the permits matrix to provide more generic information that would apply to an Alaska North Slope gas pipeline project. Learn more about the permits matrix here or go to the permits matrix to view the information.
Project Development Efforts
In 2007, as interest in a North Slope gas pipeline had been simmering for years, the Alaska Legislature passed the Alaska Gasline Inducement Act, providing incentives for a project developer. The major incentive provided up to $500 million in state funding for pre-construction engineering, design and environmental work. The state awarded the development license to TransCanada in 2008. The AGIA license did not grant TransCanada an exclusive right to construct and operate an Alaska gas pipeline; only the exclusive right to state financial assistance.
Denali, a joint venture between BP and ConocoPhillips, formed in April 2008 and began engineering, design and environmental work on a gas pipeline project and discussions with federal permitting agencies. Denali worked the project for three years, including holding an open season to gauge shipper interest in using the line from the North Slope into Canada to serve North American customers. Denali pre-filed with FERC, under docket number PF08-26. The Office of the Federal Coordinator compiled an implementation plan describing potential issues that could arise in permitting the project. However, citing unfavorable market conditions, Denali in May 2011 shut down the project.
Concurrent with Denali's efforts, ExxonMobil had joined up with TransCanada under the name Alaska Pipeline Project. FERC on May 1, 2009, accepted the venture's request to start the pre-filing process under docket number PF 09-11. The Federal Coordinator completed an implementation plan in May 2010 for the Alaska Pipeline Project – just as it had for Denali – focusing on the issues that would need attention to ensure a successful permitting process. As the project continued, the Federal Coordinator provided status updates on the plan's attention items through February 2012.
TransCanada/ExxonMobil held an open season in 2010 for prospective shippers on a pipeline to Canada and, unlike Denali, also included the option of a pipeline to the Alaska port city of Valdez for the potential export of LNG, whichever shippers would prefer. TransCanada/ExxonMobil negotiated with potential shippers but failed to reach any agreements and terminated its open season in May 2012.
As a condition of the state license and financial assistance, TransCanada/ExxonMobil was expected to file a complete project application with FERC by Oct. 31, 2012, for the pipeline to the Canadian border. However, in recognition of changes in the North American natural gas market and the North Slope producers' heightened interest in looking at Asian markets, the state in May 2012 agreed to delay the required application to FERC to October 2014. TransCanada and the three major North Slope producers (ExxonMobil, BP and ConocoPhillips) have agreed to work together starting in spring 2012 to consider a pipeline from the North Slope to Southcentral Alaska, terminating at a liquefaction plant and LNG shipping terminal.
The Alaska Natural Gas Pipeline Act of 2004 would not apply to an LNG export project, unless amended by Congress.
Start of the NEPA Process
As part of its pre-file process with FERC, TransCanada/ExxonMobil held 24 open houses across Alaska in March, April and May 2011 to explain the project to the public and take questions. The companies in 2011 submitted preliminary drafts of two of the project's resource reports, also as part of the FERC pre-file process. The preliminary draft documents can be found on our Environmental Review Documents page. Based on that information, FERC was able to begin the formal NEPA process and, in August 2011, issued a notice of intent to begin an environmental impact statement for a pipeline to the Canadian border. The formal scoping period to determine issues to be covered in the impact statement began Aug. 1, 2011, and ended Feb. 27, 2012.
The developer in January 2012 submitted to FERC the first draft of the full set of 11 required resource reports based on field work and input from the federal and state regulatory agencies. With the project information available for public and agency review, FERC held scoping meetings in seven communities across Alaska in January and February 2012. For more information about the scoping process and handouts from the scoping meetings, see our Scoping page.
After the close of the formal scoping period, FERC submitted comments on the draft resource reports to TransCanada/ExxonMobil based on input from federal and state agencies and a summary of comments received during the scoping period. The comments are to help the developer know where the gaps are in the draft reports, allowing time to complete the information for the final reports and application to FERC. A project applicant needs to address the issues raised in scoping sessions and draft resource reports, or risks delays in the NEPA process.
FERC will not move forward to the next step in its NEPA process until the applicant decides whether it will proceed with a pipeline to serve North American markets or embark on a project to liquefy and export natural gas aboard tankers to markets in Asia.
The applicant asked FERC to keep open it pre-filing docket while it considers the LNG option. This will enable the draft resource reports and other information in the public record to remain viable until the developer moves forward on either option.