Report 

Submitted to the 

United States Congress 

by the Federal Energy Regulatory Commission 

 

Eighth Report to Congress on Progress Made in Licensing 

and Constructing the Alaska Natural Gas Pipeline 

 

August 26, 2009 
Eighth Report to Congress on the Alaska Pipeline 

I. Executive Summary 

This report by the Federal Energy Regulatory Commission (Commission or 

FERC) is submitted pursuant to section 1810 of the Energy Policy Act of 2005 (EPAct 

2005). 1

 Section 1810 of EPAct 2005 requires that the Commission submit to Congress 

semi-annual reports describing the progress made in licensing and constructing an Alaska 

natural gas pipeline and any impediments thereto. There has been further progress 

towards development of an Alaska natural gas pipeline over this reporting period. 

 

This report provides an update from the Commission’s Seventh Report, submitted 

on February 20, 2009. During the period covered by this report : 1) Denali – The Alaska 

Gas Pipeline LLC (Denali), a partnership of BP and ConocoPhillips, continued with the 

Pre-filing process for its project with the Commission; 2) TransCanada Alaska Company, 

LLC (TC Alaska) entered the Commission’s Pre-filing process for its project; and (3) 

certain other natural gas transportation projects in Alaska which would not be subject to 

Federal jurisdiction continued to be developed. 

Both Denali and TC Alaska have publicly announced their intentions to conduct 

their respective Open Seasons (the formal process for obtaining shipper commitments on 

the pipeline) in 2010. The Commission must review and approve a project sponsors’ 

Open Season plan (package) before they can begin their Open Seasons. A public 

comment period regarding these Open Season plans will be incorporated into the 

Commission’s review. 

II. Status Report 

 A. The Commission’s Activities 

1. Denali’s Proposal 

Denali plans to construct and operate a 48-inch diameter pipeline to transport up to 

4 billion cubic feet of natural gas per day (Bcf/d) from the Alaska North Slope to the 

Alberta Hub for North American consumers. In 2009, under the Commission’s Pre-filing 

process, the Commission’s Staff has been working closely with Denali and the federal 

 

1

 P.L. 109-58, 119 Stat. 594 (2005), 42 U.S.C § 15801 et seq. 

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interagency team 2

, exchanging information and coordinating activities to ensure a timely 

and efficient application development and review process. All items related to Denali’s 

proposal are available to the public in the FERC’s eLibrary under Denali’s Pre-filing 

docket (Docket No. PF08-26-000). 

The Commission continues to execute its National Environmental Policy Act and 

Natural Gas Act certificate application responsibilities for Denali’s proposal. Staff 

remains focused on taking the steps necessary to produce an environmental impact 

statement (EIS) for the project on the timeline defined by the Alaska Natural Gas Pipeline 

Act (ANGPA). Working with the federal interagency team, the Commission Staff has 

engaged in significant activities regarding Denali’s proposal, as discussed below. 

 On May 15, 2009, the FERC Staff selected Argonne National Laboratory 

(Argonne) as the third-party contractor to provide assistance in preparing the 

environmental impact statement for the Denali project. In this role, Argonne will work 

under the direct supervision and control of the Commission Staff. 

In June 2009, the Staff met in Calgary, Alberta, Canada with Denali, the National 

Energy Board of Canada (NEB), and Argonne. The meeting with Denali was to review 

Denali’s project efforts in Canada and how those efforts are coordinated with the required 

field work in Alaska. Staff’s discussions with the NEB focused on the permitting 

process in Canada and how the NEB’s process could be synchronized with that of the 

U.S. federal interagency team. At the meeting with Argonne, the Commission Staff and 

Argonne established their working relationship and outlined preliminary work products, 

such as a communications plan. 

In August 2009, the Staff traveled to Alaska to meet with agencies that are part of 

the federal interagency team and to conduct pipeline route reconnaissance. Staff also met 

with the Alaska Department of Natural Resources. Discussions focused on the agencies’ 

ability to review two projects simultaneously, the need for infrastructure improvements to 

support project construction, and strategies for engaging Alaska Natives in the project 

review. 

The FERC Staff, accompanied by staff of the Office of the Federal Coordinator, 

drove the Dalton Highway to Prudhoe Bay, visiting segments of the route and observing 

field conditions north of Fairbanks. The site visit included a tour of the proposed location 

of the gas treatment plant and other Prudhoe Bay facilities. 

 

2

 In June 2006, 15 federal agencies signed a Memorandum of Understanding Related to 

an Alaska Natural Gas Transportation Project (MOU). This MOU established a project 

management framework for cooperation among participating federal agencies with 

responsibilities related to the approval of an Alaska natural gas transportation project. 

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Since the previous report, Denali has filed several items with the Commission that 

are required as part of the Pre-filing process. Denali filed its Public Participation Plan on 

April 21, 2009, outlining Denali's commitment to ensuring that stakeholders have 

opportunities to provide input during the development of applications to FERC and other 

governmental agencies. On May 1, 2009, Denali filed with the Commission its first 

monthly status report. In this report, Denali announced that it had awarded an 

engineering contract for the gas mainline portion of the project to Bechtel. The contract 

covers the services required during the preliminary engineering design phase of the 

mainline project. Major contract elements include pipeline engineering, compressor 

station engineering, design basis development, cost estimating, scheduling, and 

procurement planning, as well as infrastructure and logistics assessments. The work to 

be performed by Bechtel will be used in the development of Denali's commercial terms 

for its 2010 Open Season. 

In June 2009, Denali met in Washington D.C. with the U.S. Department of 

Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) to 

provide a project update and discuss potential special permits that Denali may request in 

the future. Consistent with governing statutory and regulatory requirements, none of 

Denali’s special permit requests would require action by PHMSA until after the FERC 

Open Season. 

In July, Denali reported that it had completed an updated infrastructure needs 

assessment to identify those areas in Alaska where improvements or repairs to highways, 

bridges, ports and airstrips will be helpful to the project. A similar infrastructure 

assessment has been conducted by the Alaska Department of Transportation and Public 

Facilities. These infrastructure improvements are primarily long-lead time items that 

require early planning, design, permitting, and funding. Only a small percentage of the 

infrastructure project identified in the studies have been completed to date. 

In the short-term, Denali is focusing the majority of its efforts on developing the 

information necessary for holding a successful Open Season during 2010. Denali plans 

to resume more intensive environmental field surveys in 2010. 

2. TC Alaska’s Proposal 

TC Alaska, the licensee under the State of Alaska’s Gasline Inducement Act 

(AGIA) program, proposes to construct and operate a 48-inch-diameter pipeline with up 

to 5 Bcf/d of throughput to transport natural gas from the North Slope of Alaska to 

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markets in North America via the Alberta Hub. On December 5, 2008, TC Alaska was 

formally issued the AGIA license by the State of Alaska. 3

 

On April 23, 2009, TC Alaska requested that the Commission initiate the Prefiling process for its proposal. That request was approved by the Director of the 

Commission’s Office of Energy Projects on May 1, 2009. The Commission Staff has 

begun working closely with TC Alaska and the federal interagency team on the project, 

exchanging information and coordinating activities to ensure a timely and efficient 

application development and review process. All items related to TC Alaska’s proposal 

are placed in FERC’s eLibrary under TC Alaska’s Pre-filing docket (Docket No. PF09-

11-000) and are available to the public. 

In its Pre-filing request, TC Alaska reported that it has awarded a number of 

contracts to develop plans and schedules for the technical work leading up to its Open 

Season in 2010 and to perform preliminary engineering studies and develop a cost 

estimate for the project. Further, TC Alaska is setting up a spatial data management 

system and completing aerial photography on the pipeline route. Work in progress at the 

time of the Pre-filing request included hydraulic and geothermal modeling; geotechnical 

hazards analysis; terrain mapping; pipeline and facilities design; construction/logistics 

planning activities; and a number of technology development initiatives. 

Similar to Denali, TC Alaska conducted an infrastructure needs assessment to 

identify its requirements for highway system and airstrip upgrades. The improvements 

and repairs are necessary to address size and weight constraints on roads and bridges as 

well as the additional project-related traffic. 

On June 11, 2009, TransCanada Corporation (TransCanada) announced that it had 

reached an agreement with affiliates of ExxonMobil Corporation to work together on an 

Alaska gas pipeline. TC Alaska remains the project sponsor with the FERC and will also 

remain the AGIA licensee. TC Alaska will continue as the primary point of contact with 

the State of Alaska and the general public for this project. TC Alaska reports that its 

AGIA obligations to the State of Alaska will remain unaffected. However, TransCanada 

and ExxonMobil are now jointly advancing all aspects of the project – technical, 

commercial, regulatory, and financial – by the sharing of certain expenses and 

information. The partially redacted agreements which established the alignment between 

 

3

 The AGIA is the State of Alaska’s official vehicle for encouraging a project sponsor to 

proceed with a federal application for the construction of an Alaska natural gas pipeline. 

The AGIA license is a state action that does not constrain future federal actions with 

respect to a proposed pipeline. 

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TransCanada and ExxonMobil are publicly available on the State of Alaska’s AGIA 

website. 4

 On July 15, 2009, TC Alaska filed with the Commission its first monthly status 

report in Docket No. PF09-11-000. Among other details, TC Alaska reported that its 

study of a preliminary routing corridor through Alaska was continuing. This corridor 

review will be the basis of the engineering and cost estimating to support its Open 

Season. TC Alaska also reported that planning has commenced for a limited late summer 

geophysical program at specific locations along the study corridor. The technology 

development activities for this period included work on the pipeline reliability model, 

further integrating strain capacity and strain demand elements, and frost heave testing. 

 TC Alaska conducted a series of agency meetings in June 2009, to discuss 

regulatory requirements with the Alaska AGIA State Pipeline Coordinator’s Office, 

Bureau of Land Management, and FERC. TC Alaska reports its recent project activities 

in Canada include continuing engagement with the federal, territorial and provincial 

regulatory departments, and with First Nation communities along the route; engineering 

review of the existing certified route; construction planning; and conducting an 

environmental information needs analysis and an environmental constraints review. 

The Commission Staff’s August 2009 visit to Alaska to meet with agencies and 

tour the prospective pipeline routes was also applicable and beneficial to the progress of 

TC Alaska’s Pre-filing process. As with the Denali project, the FERC staff is taking the 

steps necessary to produce an EIS for the TC Alaska project on the timeline defined by 

ANGPA. In 2009, TC Alaska is focusing the majority of its efforts and resources on 

preparing for a successful Open Season during 2010. 

 3. Open Seasons for Capacity on Alaskan Natural Gas Pipelines

Congress enacted ANGPA in 2004 and, as required, the Commission approved, in 

Order No. 2005, rules to establish requirements governing the conduct of Open Seasons 

for capacity on proposals for Alaska natural gas pipeline projects. Order No. 2005 

fulfilled the Commission’s obligations required by ANGPA’s mandate to establish rules 

within 120 days of the law’s October 13, 2004 enactment date. All of the documents 

related to this rulemaking are on the Commission’s e-Library under Docket No. RM05-1-

000 and RM05-1-001. The text of the Alaska Open Season rules is now codified in Part 

157, Subpart B of the Commission’s Regulations, Sections 157.30 through 157.39. 

 

4

 See TransCanada and Exxon Partnership Materials which are available at 

http://www.gov.state.ak.us/agia/agia_tc-em.php 

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Specifically, the rules establish standards for creating Open Seasons for initial and 

voluntary expansion capacity and for allocating capacity to ensure nondiscriminatory 

access to any Alaska transportation project. Open Seasons are commercial opportunities 

for potential customers to compete for and acquire capacity on a proposed or existing 

pipeline. Open Seasons inform project sponsors of shippers’ needs so that they may 

adjust a project design accordingly. While the Open Season is the commercial backbone 

for any project, it is expected that the Open Season may overlap other design and 

environmental efforts in a project’s development. Also, individual capacity agreements 

can be struck between project sponsor and prospective shippers outside of an Open 

Season, subject to the public notification requirements in the Commission’s Open Season 

regulations. 5

B. Other Projects 

The Alaska Gasline Port Authority is the sponsor of an Alaskan LNG proposal 

which contemplates delivering Prudhoe Bay gas to Valdez by pipeline, where it would be 

liquefied and shipped on tankers to the Asian market, the West Coast of the U.S. and 

Mexico, and/or Hawaii. TC Alaska has committed to including the option of transporting 

natural gas for this proposed LNG project within its Open Season for a mainline pipeline 

from the Alaska North Slope to Alberta, Canada. The FERC would have regulatory 

jurisdiction over any Alaska LNG project, including any pipeline dedicated to 

transporting gas to the LNG facility. 

The Alaska Natural Gas Development Authority (ANGDA) is continuing to 

develop plans to build certain intrastate natural gas pipelines to move Alaska gas to 

Alaskans. ANGDA is proposing to build a 460-mile-long natural gas pipeline of various 

diameters from Beluga (southern Alaska) to Fairbanks. This pipeline would initially be 

used to transport Cook Inlet natural gas from southern Alaska to Fairbanks, and then later 

connect to either Denali or TC Alaska to bring North Slope natural gas to southern 

Alaska. 

The State of Alaska is using available in-state data to consider four alternatives for 

delivering in-state gas to Alaskans. The four alternatives are : 

 

5

 Direct access to the Commission’s Orders regarding the Open Season, Order Nos. 

2005 and 2005-A, a fact sheet, and a slide presentation can be found at 

http://www.ferc.gov/industries/gas/indus-act/angtp.asp 

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1) A pipeline from the Alaska North Slope (both the foothills of the Brooks Range 

and the Prudhoe Bay area) to the tidewater in Cook Inlet, along the Parks 

Highway; 6

2) A pipeline from the Alaska North Slope to tidewater in Cook Inlet, along the 

Richardson & Glenn Highways; 

3) A spur-line off a main-line to Alberta, down the Parks Highway to Cook Inlet; and 

4) A spur-line off a main-line to Alberta, down the Glenn & Richardson Highways to 

Cook Inlet. 

The State of Alaska intends to identify the preferred project from the four options, 

develop the associated right-of-way, a cost analysis, and facilitate discussions and 

agreements between gas producers and gas purchasers. Once these efforts are complete, 

assuming the chosen project is economic, the State of Alaska will provide the private 

sector the opportunity to purchase these assets and develop the project. 

III. Related Federal and Canadian Activities 

A. Operations of the Federal Coordinator 

The Office of the Federal Coordinator for Alaska Natural Gas Transportation 

Projects (OFC), pursuant to Section 106 of ANGPA, continues to coordinate the actions 

of federal agencies regarding Alaska natural gas transportation projects and to provide a 

liaison function to ensure communication with Congress, the State of Alaska, and federal 

U.S. and Canadian agencies. As established in the June 2006 MOU, the OFC is 

responsible for working with the federal interagency team to create a consolidated project 

Implementation Plan. The OFC is completing the Implementation Plan in phases and 

will prepare one for each project applicant that enters the FERC Pre-filing process. 

On June 9, 2009, the OFC completed the first phase of the Implementation Plan 

specific to the Denali project. The first phase includes the period of time from beginning 

the FERC Pre-filing process until the FERC deems Denali’s application complete. The 

second phase of the plan will cover the EIS development period. The OFC currently is 

 

6

 ENSTAR Natural Gas Company, a large natural gas distribution company in 

Alaska, continues to work with the State of Alaska (under the direction of the Governor’s 

office) on route selection, regulatory matters, and permitting for an in-state pipeline. 

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working on a first phase Implementation Plan specific to the TC Alaska project and 

expects to complete it by the end of 2009. 

The OFC meets regularly with the federal interagency team and with the Senior 

Intergovernmental Management Team, comprised of the Federal Coordinator and senior 

government officials for the State of Alaska and the Canadian federal government, as 

well as representatives from Denali and TC Alaska. The Federal Coordinator continues 

to negotiate a joint surveillance and monitoring agreement with the State of Alaska as 

required in Section 106(e) of ANGPA. 

B. U.S. Department of Energy 

The U.S. Department of Energy's (DOE) program office for the federal loan 

guarantee program for the Alaska natural gas transportation project monitored the 

developments of potential project sponsors. When a more complete commercial project 

emerges from TC Alaska, Denali, or another sponsor(s), DOE will proceed with 

structuring the loan guarantee program. 

C. Developments in Canada 

The regulatory scheme in Canada for the Canadian segments of Denali and TC 

Alaska has been clarified such that now the role of three agencies is being better 

coordinated. These agencies are the Major Projects Management Office (MPMO), 

Northern Pipeline Agency (NPA), and the Canadian Environmental Assessment Agency 

(CEAA). Both the MPMO and NPA are located within the Natural Resources Canada 

(NRCan), which is akin to the U.S. Department of Energy. The MPMO will coordinate 

the Denali project, while the NPA is responsible for managing the TransCanada’s 

proposal in Canada, which is also known as the Foothills Project. The National Energy 

Board of Canada will also be involved with both projects for tariff and toll issues, as well 

as evaluating the merits of Denali’s proposal in Canada. Canadian officials are 

developing coordinated permitting timelines for both projects such that permitting and 

regulatory work in Canada is expected to coincide with permitting and regulatory activity 

in the United States. 

IV. Conclusion 

There are now two proposals for a mainline Alaska natural gas pipeline project in 

the Commission’s Pre-filing review process. While Denali and TC Alaska have 

continued to advance in their detailed planning and project design stages, both companies 

are currently concentrating the bulk of their efforts on obtaining the information 

necessary to conduct their respective Open Seasons in 2010. The Alaska Open Season(s) 

are commercial opportunities for potential customers to compete for and acquire capacity 

on a proposed Alaska natural gas pipeline(s). 

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Recent infrastructure needs assessments by Denali, TC Alaska, and the Alaska 

Department of Transportation and Public Facilities indicate that a large number of 

projects to improve or repair highways, bridges, ports, and airstrips must be completed 

prior to initiating construction of an Alaska natural gas pipeline by either Denali or TC 

Alaska. Because these infrastructure improvements are long-term efforts that require 

permitting and funding, greater progress in this area must be made to avoid conflicting 

with the projected timeline for pipeline construction.