History of the Alaska Highway Gas Pipeline project
Vast reserves of oil and natural gas were discovered in Alaska and the Canadian Arctic in the late 1960s. In the early 1970s, Canada and the United States began contemplating major pipelines designed to transport Alaskan and northern Canadian gas to southern markets.
Canada appointed a Commission of Inquiry under Justice Thomas Berger to study the environmental and socio-economic effects of a pipeline up the Mackenzie Valley. In 1977, after two years of hearings, Justice Berger concluded that all routes through northern Yukon should be rejected for environmental reasons and determined that a southern Yukon route would be acceptable.
Companies proposed several different pipelines to accommodate both Alaskan and northern Canadian gas. In 1976-77, the National Energy Board (NEB) held 214 days of hearings to consider several proposals for an Arctic natural gas pipeline. In July 1977, the NEB found that the Foothills project (now wholly owned by TransCanada Pipeline Ltd.) offered the generally preferred route for transporting Alaska natural gas, although requiring further engineering design, environmental and socio-economic information.
The Foothills project became the subject of the 1977 Canada-United States Agreement on Principles Applicable to a Northern Natural Gas Pipeline [PDF 316.96 kb]. Canada’s Northern Pipeline Act of 1978 created the Northern Pipeline Agency and gave effect to the bilateral agreement in Canada. The Act deemed issued Certificates of Public Convenience and Necessity (CPCNs) pursuant to the National Energy Board Act.
In its early years, the NPA developed detailed terms and conditions for different segments of the pipeline route. The NPA also regulated the construction of the Canadian portion of the “Pre-Build” (Stage One) of the Foothills pipeline. In the early 1980s, following construction of the Pre-Build, a combination of depressed natural gas prices and unfavourable economics put the completion of the northern segments of the pipeline on hold.
The NPA was reduced to a small staff headquartered in Ottawa to oversee the administration of the NPAct and the regulation of expansions to the Pre-Build. There were five expansions between 1988 and 1998. The latest brought the Pre-Build to transport 3.3 billion cubic feet per day (Bcf/d) from Western Canada to American markets.
Timeline of Major Events
1976: Foothills puts forward its proposal for an Alaska Highway pipeline.
1977: The NEB selects the Foothills project as the generally preferred route for sourcing Alaskan and northern Canadian gas.
1977: Canada and the U.S. sign the Canada-United States Agreement on Principles Applicable to a Northern Natural Gas Pipeline.
1978: The pipeline route in Canada is certificated with the passage of the Northern Pipeline Act, which also creates the Northern Pipeline Agency .
1982: The “Prebuild,” originating in Caroline, Alberta, is completed, sourcing gas from Western Canada.
1983: The easement through Yukon is granted to Foothills.
1988-98: The Prebuild undergoes five expansions, reaching its current capacity of 3.3 Bcf/d.
2008: TransCanada Alaska Co. is awarded a license under the Alaska Gasline Inducement Act.
2009: TransCanada Pipeline Ltd. and ExxonMobil reach an agreement to jointly pursue the project, commercially known as the Alaska Pipeline Project (APP).
Past socio-economic and environmental assessments
In 1976-1977, over some 214 days of hearings, the National Energy Board (NEB) studied three possible routes for transporting Alaskan and northern Canadian natural gas to southern markets. Of these, two ran through the Mackenzie Valley and one followed a path roughly parallel to the Alaska Highway. In July 1977, the NEB concluded that the Foothills project offered the generally preferred route for transporting Alaskan and northern Canadian gas.
In 1977, the Lysyk Inquiry studied the socio-economic impacts of the pipeline proposal, holding hearings in 17 Yukon communities over 51 days. Mr. Lysyk’s report made several specific recommendations to minimize any potentially negative impacts.
The Mair Inquiry was appointed by the NPA in 1979 to study potential socio-economic impacts in British Columbia. Mr. Mair held hearings in 15 communities and issued a report recommending several specific mitigating measures.
Foothills applied to the Department of Indian Affairs and Northern Development for an easement through southern Yukon in 1976, triggering an Environmental Assessment and Review Panel (EARP) under the Federal Environmental Assessment and Review Office. The panel met intermittently between 1977 and 1982, and issued four reports in total.
In 1977, the Panel issued an interim report affirming preference for a southern Yukon route and requesting an Environmental Impact Statement (EIS) from Foothills. The Panel also recommended a single mechanism for coordinating design and environmental approvals.
In 1979, after Foothills submitted an EIS for the southern Yukon portion of the project, the Panel held public hearings in nine Yukon communities. The Panel concluded that insufficient information had been filed.
Between 1979 and 1981, the Northern Pipeline Agency participated in assessment activities, consulting with governments, public interest groups and communities to develop socio-economic and environmental terms and conditions. Also, in 1981, the Panel reconvened to address additional information submitted by Foothills, specifically regarding the routing in the Whitehorse and Ibex Pass areas of Yukon.
In 1982, Foothills submitted additional addenda to the EIS. The Panel held public hearings in Whitehorse and submitted its final report, concluding that the pipeline could be constructed and operated in an environmentally responsible manner.
Canada and Foothills entered into an easement agreement on November 24, 1983, and a grant of easement (the Grant) was issued on November 28, 1983. A Certificate of Title for the easement was registered in the Yukon Land Titles Office in Whitehorse, Yukon, in July 1984, and the easement is a recognized property interest in certain First Nation Settlement Lands under Final Agreements.
Comprehensive maps of the easement may be viewed at the Land Titles Office. The precise location is set out in Plans, Profiles and Books of Reference (PPBoR) submitted to the NPA by Foothills before the easement was granted. A copy of the PPBoR is filed in the Yukon Land Titles Office in Whitehorse as instrument #67550.
The easement follows the Alaska Highway from the Yukon-Alaska border near Beaver Creek, Yukon, to the Yukon-British Columbia border near Watson Lake, Yukon. It is approximately 760 kilometres long and is generally 240 metres wide. The width will allow for minor adjustments of the Pipeline location within the easement, and after the Pipeline is built, a much narrower easement would be granted for its operation.
Stage two of the Alaska Highway Gas Pipeline project
In Canada, Stage Two of the AHGP would run from the Yukon-Alaska border near Beaver Creek, Yukon, to the Yukon-B.C. border near Watson Lake. It would then proceed through northeastern B.C. to a point near Boundary Lake on the border with Alberta. There it would connect either to existing infrastructure in Alberta or to a third stage of the project, Stage Three, running from the B.C.-Alberta border to the Pre-Build.
In 2007, the State of Alaska passed the Alaska Gasline Inducement Act (AGIA) to encourage the development of natural gas reserves in Alaska’s North Slope and to promote further oil and gas exploration in the region. AGIA requested submissions for a project that would produce low tolls (transportation costs) and provide for regular expansions of the pipeline, local hire, in-state delivery and a firm schedule. AGIA provided for up to $500 million in State funds to any proponent that met its terms.
TransCanada PipeLines, which acquired full ownership of Foothills in 2004, received a license under AGIA to pursue a project to commercialized North Slope gas. Its Alaska Highway option would make use of Foothills’ Certificates of Public Convenience and Necessity, which were granted under the Northern Pipeline Act in 1978 and which remain valid along with the company’s easement through Yukon, granted in 1983.
In 2009, ExxonMobil, the largest gas producer in the North Slope region, joined TransCanada PipeLines to form the Alaska Pipeline Project (APP). The APP held its first “open season,” or solicitation for commercial bids from gas producers in 2010.