Natural gas plays a prominent role in our nation’s energy mix; it is the fuel of choice for the rapidly expanding U.S. electricity generation market. Rising consumer demand, national security concerns, environmental needs and economic competitiveness require that we continue to find new sources of natural gas in North America.
One of the most promising areas of gas development is in Alaska and the Yukon and Northwest Territories of Canada, collectively known as the "frontier." The proven natural gas reserves in this region represent more than 10 percent of the North American natural gas reserve base of 375 TCF, a proportionately greater amount than the Alaskan oil reserve base that existed when the TransAlaska Oil Pipeline was built in the 1970s.There is an even greater potential for more gas reserves to be developed in the region.
But taking advantage of those reserves requires building the infrastructure to deliver the gas to the consumers who are demanding it. Future Natural Gas Supplies from the Alaskan and Canadian Frontier assesses the overall commercial feasibility of a pipeline project to transport natural gas from the frontier to the North American market, and finds that a frontier natural gas pipeline can be built with minimal environmental impact and substantial long-term economic benefits to both the frontier region and North America.
The study also finds that any frontier pipeline project remains viable with prices at between $3 and $4 per million Btu (MMBtu) delivered into Chicago. Assuming timely approval, the study finds that frontier natural gas could be flowing into the North American natural gas grid by 2007.
And, the study finds a positive environmental benefit from frontier gas: The greenhouse gas emissions per unit of frontier gas delivered to the consumer are lower than those of natural gas imports, and lower than most alternative sources of fuel for power generation.
Yet there are several hurdles to building the infrastructure that will allow consumers to use that gas. The study identifies two important ones: the need to address native land access and land claims, and to streamline and accelerate the regulatory approval process. And as more than 50 percent of natural gas demand comes from the Eastern U.S. and Canadian markets, the study confirms a need for additional capacity to deliver gas from Alberta eastward to those markets. The study supports previous studies in concluding that more than 38,000 miles of new natural gas transmission pipelines are needed during the next 15 years to meet market requirements.
To help overcome some of these hurdles, this study also recommends that the natural gas industry:
- Focus on regional development with frontier communities;
- Educate and train workers from the frontier; and
- Coordinate an infrastructure development policy to address difficulties in obtaining permits and to match investment risk of frontier infrastructure with the needs of the market.