Report 

Submitted to the 

United States Congress 

by the Federal Energy Regulatory Commission 

 

Ninth Report to Congress on Progress Made in Licensing 

and Constructing the Alaska Natural Gas Pipeline 

 

February 25, 2010 
Ninth 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 Eighth Report, submitted 

on August 26, 2009. During the period covered by this report: 1) TransCanada Alaska 

Company, LLC (TC Alaska) filed a request for approval of its Open Season Plan; 

2) Denali – The Alaska Gas Pipeline LLC (Denali) announced its intentions to file a 

request for approval of its Open Season Plan in April 2010; and 3) development 

continued on certain other natural gas transportation projects in Alaska that would not be 

subject to the Commission’s jurisdiction. 

The Commission must review and approve a project sponsor’s Open Season Plan 

before a sponsor can begin its Open Season. To facilitate this process, the Commission 

staff held workshops on January 12 and February 22, 2010, on the procedures and 

process for holding and commenting on an Open Season for an Alaska Natural Gas 

Transportation Project. 

II. Status Report 

 A. The Commission’s Activities 

The Commission continues to execute its National Environmental Policy Act and 

Natural Gas Act certificate application responsibilities for both the Denali and TC Alaska 

proposals. Staff remains focused on taking the steps necessary to produce environmental 

impact statements (EIS) for the projects and to act on project applications on the timeline 

defined by the Alaska Natural Gas Pipeline Act (ANGPA). 

Both Denali and TC Alaska have directed significant resources towards 

completing the preliminary engineering and cost estimating tasks necessary to support 

their respective Open Seasons. Pending the results of their open seasons, both project 

sponsors have delayed the gathering of the environmental data needed to analyze the 

 

1

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

 - 1 -
potential impacts of the projects; no such data was provided to the Commission during 

the last reporting period. 

 Nevertheless, the Commission staff and the federal interagency team continued 

working together in a streamlined and coordinated fashion to prepare for the review of 

both proposals. For example, the Commission staff recently distributed to the 

cooperating agencies a revised version of the Statement of Purpose and Need and Scope 

of Project Alternatives. The document was developed pursuant to section IV(C)(6) of the 

Memorandum of Understanding Related to an Alaska Natural Gas Transportation Project 

and revised after interagency review.

2

 In October 2009, Commission staff travelled to Anchorage to participate in the 

Gas Pipeline Technical Design Meeting, which included federal and state agencies 

evaluating the two pipeline proposals. 

On November 12, 2009, the State of Alaska (State) filed a petition for a limited 

waiver of the Commission’s capacity release regulations and related rules regarding the 

State’s ability to transport royalty gas on any Alaska Gas Pipeline Project authorized by 

the Commission. The State sought permission to obtain prearranged capacity releases for 

transporting its royalty gas without posting the releases for bidding. Various parties filed 

comments in support of and opposition to the requested waiver. On January 28, 2010, the 

Commission granted the requested waiver, subject to certain conditions explained in the 

Commission’s order which require the State to use its waiver without discrimination 

among the various shippers or the two potential projects. 3

 

 

 B. Denali’s Proposal 

Denali, a partnership of BP and ConocoPhillips, plans to construct and operate a 

gas treatment plant (GTP) near Prudhoe Bay and 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 2008, under the Commission’s prefiling process, the Commission staff began working closely with Denali and the federal 

interagency team, exchanging information and coordinating activities to ensure a timely 

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

 

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. 

3

 See Order on Petition for Waiver in The State of Alaska - Docket No. RP10-145-000 

 issued on January 28, 2010; 130 FERC ¶ 61,070. 

 - 2 -
proposal are available to the public in the FERC’s eLibrary under Denali’s pre-filing 

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

 Since August 2009, Denali has reported progress in both outreach and 

development of its plans for the GTP. In September 2009, Denali held outreach meetings 

for landowners in Salcha and Delta Junction in southeastern Alaska. In October 2009, 

Denali representatives met with federal agencies in Alaska to outline preliminary plans 

related to offshore dredging, dredge material disposal and the causeway expansion related 

to the proposed GTP. 

 In January 2010, Denali announced that it would adjust its schedule to target the 

4th quarter of 2013 for filing its application to the FERC for a Certificate of Public 

Convenience and Necessity. Denali stated that this schedule adjustment is necessary to 

conduct (in 2011 and 2012) the two full seasons of field work still needed to complete its 

application. Denali will not conduct any field survey activities until after its Open 

Season is completed. 

 C. TC Alaska’s Proposal 

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

(AGIA) Program, proposes to construct and operate facilities similar to those planned by 

Denali but accommodating up to 5 Bcf/d of throughput. On December 5, 2008, TC 

Alaska was formally issued the AGIA license by the State of Alaska. 4

 

In 2009, the Commission staff began working closely with TC Alaska and the 

federal interagency team upon the commencement of the pre-filing process. This work 

entailed the exchange of information and the coordination of activities to ensure a timely 

and efficient application development and review process. All items related to TC 

Alaska’s proposal are available to the public in FERC’s eLibrary under TC Alaska’s prefiling docket (Docket No. PF09-11-000). 

 Since August 2009, TC Alaska has continued to engage the Alaska Native groups 

and other external stakeholders to share information about its project. In addition, TC 

Alaska continues to review and refine the routing options and to plan for field work 

during 2010 and 2011. 

 

4

 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. 

 - 3 -
D. Open Seasons for Capacity on Alaskan Natural Gas Pipelines 

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

rules that established requirements governing the conduct of Open Seasons for capacity 

on proposals for Alaska natural gas pipeline projects in Order No. 2005. This order 

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. 

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

The Commission staff held two workshops for interested persons on the 

procedures and process for holding and commenting on an Open Season for an Alaska 

Natural Gas Transportation Project. The first workshop was held on January 12, 2010, in 

Anchorage, Alaska, and the second workshop was held on February 22, 2010, in 

Washington, DC. At these workshops, the Commission staff explained FERC’s Open 

Season regulations and the process by which each project sponsor is required to submit a 

detailed plan to FERC prior to conducting an Open Season.6

 The workshops also 

included an explanation of FERC’s Electronic Records and Filing System, and how the 

public and parties could get access to electronic filings and file their comments with 

FERC electronically. 

 

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 on the FERC website at 

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

6

 Staff’s presentations for these workshops are on FERC’s website in Docket No. RM05-

1-000, or in the Public Calendar for the January 12 and February 22 dates. 

 - 4 -
On January 29, 2010, TC Alaska filed a Request for Commission Approval of its 

Plan for Conducting an Open Season. TC Alaska’s Open Season Plan offers shippers the 

option of a mainline pipeline from the gas treatment plant near Prudhoe Bay to either 

(1) the Alaska/Canada border for onward delivery to Alberta, Canada, or (2) to Valdez, 

Alaska, for connection to a liquefied natural gas facility to be constructed by a third 

party. On February 1, 2010, the Commission issued a public notice of TC Alaska’s 

filing. That notice set February 24, 2010 as the due date for public comments and 

March 9, 2010 as the date for reply comments. The Commission intends to act on TC 

Alaska’s request by March 29, 2010. 

E. Other Projects 

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

which contemplates delivering North Slope gas to Valdez by pipeline, where it would be 

liquefied and shipped on tankers at an LNG terminal to the Asian market, the West Coast 

of the U.S. and Mexico, and/or Hawaii. TC Alaska has included in its Open Season the 

option of transporting natural gas for this or any proposed LNG project along with the 

option for a mainline pipeline from the Alaska North Slope to Alberta, Canada. The 

Commission would have regulatory jurisdiction over any Alaska LNG terminal and over 

any pipeline or pipeline lateral that is dedicated solely to serving an Alaskan LNG 

terminal. 

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

develop plans to build certain intrastate natural gas pipeline facilities 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 still considering various alternatives for delivering in-state 

gas to Alaskans. The selection of an alternative depends upon whether a mainline 

interstate pipeline or a stand-alone intrastate pipeline is ultimately built. 

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. The OFC meets regularly with the federal interagency team 

 - 5 -
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 the TC Alaska. 

In October 2009, the OFC established a technical review team of federal and state 

agency experts that will meet regularly to share engineering information and expertise 

related to project technical issues such as pipeline design, fire protection, best available 

control technology, and seismic standards. The team will also consult with the project 

proponents and Canadian officials when appropriate. 

The OFC is developing a permitting/authorization matrix called "Eliminating and 

Controlling Uncertainty in the Regulatory Process.” It will include an itemization of the 

data sets each applicant would be required to submit to secure the permits and 

authorizations from the federal agencies. The OFC also continues to negotiate a joint 

surveillance and monitoring agreement with the State of Alaska as required in Section 

106(e) of ANGPA. 

On December 9, 2009, President Obama announced his intention to nominate 

Larry Persily to be the Federal Coordinator for Alaska Natural Gas Transportation 

Projects, following the November 16, 2009 resignation of Drue Pearce. The Senate 

Committee on Energy and Natural Resources held his confirmation hearing on February 

2, 2010. 

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 the role of three agencies now is being better 

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

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

Both the MPMO and NPA are located within the Natural Resources Canada, which is 

akin to the U.S. Department of Energy. The MPMO will coordinate the Denali project, 

while the NPA is responsible for managing TransCanada’s proposal in Canada (also 

known as the Foothills Project). The National Energy Board of Canada (NEB) will also 

be involved with both projects for tariff and toll issues, as well as evaluating the merits of 

the proposals in Canada. Canadian officials are developing coordinated permitting 

 - 6 -
 - 7 -

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. 

Since the August 2009 report, a major regulatory report regarding the Mackenzie 

Gas Project was issued by the Joint Review Panel in Canada which assessed the 

environmental and socio-economic impacts of the proposed project. Subject to the full 

implementation of the various recommendations, the Joint Review Panel has concluded 

that the adverse impacts of the Mackenzie Gas Project and the Northwest Alberta 

Facilities would not likely be significant, and that the project and facilities would likely 

make a positive contribution towards a sustainable northern future. The NEB is 

completing its record regarding the Mackenzie Gas Project and plans to hear final 

arguments in April 2010. 

IV. Conclusion 

Denali and TC Alaska continue to advance in their detailed planning and project 

design stages in the Commission’s pre-filing review process. During this last reporting 

period, both companies concentrated the bulk of their efforts on obtaining the information 

necessary to conduct their respective Open Seasons in 2010. The Open Season Plan for 

TC Alaska was filed with the Commission in January 2010 and is currently under review. 

Denali has announced its intention to file its Open Season plan in April 2010.