Report 

Submitted to the 

United States Congress 

by the Federal Energy Regulatory Commission 

 

Tenth Report to Congress on Progress Made in Licensing 

and Constructing the Alaska Natural Gas Pipeline 

 

August 2010 
Tenth 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. 

 

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

February 25, 2010. During the period covered by this report: 1) TransCanada Alaska 

Company, LLC (TC Alaska) obtained Commission approval of its Open Season Plan, and 

conducted its Open Season between April 29 and July 30, 2010; 2) Denali – The Alaska 

Gas Pipeline LLC (Denali) obtained Commission approval of its Open Season Plan and 

began its 90-day Open Season on July 2, 2010; and 3) development continued on certain 

other natural gas transportation projects in Alaska that would not be subject to the 

Commission’s jurisdiction. 

TC Alaska announced that its Open Season resulted in “multiple bids from major 

industry players and others for significant volumes.” In accordance with TC Alaska’s 

stated intentions, bidders on the TC Alaska Open Season must execute precedent 

agreements by December 31, 2010. Denali’s Open Season is scheduled to close 

October 4, 2010 and bidders on its Open Season must execute precedent agreements by 

February 1, 2011. 

II. Status Report 

 A. The Commission’s Activities 

The Commission continues to execute its National Environmental Policy Act 

(NEPA) 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 of 2004 (ANGPA). 

As the lead agency for purposes of compliance with the NEPA, the Commission 

staff also continues to coordinate with the federal interagency team in accomplishing the 

early-on work necessary for each agency to successfully execute their responsibilities on 

the projects. For example, in April 2010 the Commission staff distributed to the 

 1

 P.L. 109-58, 119 Stat. 594 (2005), 42 U.S.C § 15801 et seq. 
- 2 -

cooperating agencies its Plan for Consultation with Alaska Native Tribal Governments 

for Alaska Pipeline Projects. The document was developed with the input of the 

participating agencies and revised after interagency review. 

In July, the Commission staff travelled the planned pipeline corridors, meeting 

with agencies and individuals from several Alaska Native communities. Staff 

participated in Alaska Native cultural awareness training and in a series of briefings and 

discussions with federal and state agencies and Alaska Natives. A series of presentations 

from Department of the Interior agencies provided an overview of their NEPA 

requirements specific to analyzing the effects of a pipeline project on subsistence ways of 

life and subsistence resources2

. Presentations from the Tanana Chiefs Conference and 

the Alaska Department of Fish and Game provided additional information and 

perspectives on subsistence management. 

 

Since the summer of 2009, both Denali and TC Alaska have directed the majority 

of their resources towards completing the preliminary engineering and cost estimating 

tasks necessary to support their respective Open Seasons. Both project sponsors have 

deferred the rigorous gathering of environmental data until project certainty is confirmed 

by the results of the respective Open Seasons. 

 

 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 4.5 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 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 

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

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

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

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

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

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

 2

 In Alaska, subsistence refers to customary and traditional uses by rural residents 

of fish, wildlife, and other wild resources for food, shelter, or other personal or family 

needs. Subsistence continues to be a way of life for Alaska Natives and is an integral part 

of their cultures.
- 3 -

application. On March 22, 2010, Denali contracted with Argonne National Laboratory 

(Argonne) to act as the Commission’s third-party contractor to prepare the EIS for its 

planned project and satisfy NEPA compliance requirements.

C. TC Alaska’s Proposal 

TC Alaska proposes to construct and operate facilities similar to those planned by 

Denali accommodating up to 4.5 Bcf/d of throughput. The Commission staff has been 

working with TC Alaska following its entrance into the pre-filing process on May 1, 

2009. As with Denali, this work includes 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 pre-filing docket (Docket No. PF09-11-000). 

 TC Alaska is reviewing and refining its routing options and plans to conduct field 

survey work during 2010 and 2011. Commission staff has notified TC Alaska that it 

selected Argonne to act as the Commission’s third-party contractor to prepare the EIS. 

At the time of the preparation of this report, a contract between TC Alaska and Argonne 

has not been completed. 

D. Open Seasons for Capacity on Alaskan Natural Gas Pipelines 

As described in the previous Report to Congress, the Commission established 

rules and standards for conducting open seasons for capacity on proposals for Alaska 

natural gas pipeline projects in Order No. 2005.3

 In January, 2010, TC Alaska filed a 

Request for Commission Approval of its Plan for Conducting an Open Season. TC 

Alaska’s Open Season Plan offered 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 March 31, 2010, the 

Commission issued an Order Approving TC Alaska’s Open Season Plan with minor 

modifications. 

 3

 The Commission’s Orders regarding the Alaska Open Season, Order Nos. 2005, 

2005-A, and 2005-B and related information can be found on the FERC website at 

www.ferc.gov/industries/gas/indus-act/angtp.asp. On March 18, 2010, the Commission 

issued Order No. 2005-B, for the purpose of clarifying and reconciling the Commission’s 

Open Season regulationsin response to the changes to the Standards of Conduct resulting 

from Order No. 717. On April 19, 2010, the State of Alaska filed a request for 

clarification, or in the alternative, rehearing of Order No. 2005-B; this request is pending 

Commission review. This request was denied on August 26, 2010.
- 4 -

On April 29, 2010, TC Alaska issued its Notice of Commencement of the Alaska 

Pipeline Project (APP) Open Season. Its Open Season closed on July 29, 2010 and TC 

Alaska plans to notify potential shippers of project details on September 1, 2010. These 

details will include the specific pipeline route, any redesigned pipeline specifications, and 

adjusted contract quantities, if necessary. On October 31, 2010, the company will notify 

conforming bidders of capacity implications, and on November 30, 2010, it will provide 

conforming bidders with the final Precedent Agreements (PA), which bidders must 

execute by December 31, 2010. Finally, within ten days of executing the final PAs, TC 

Alaska will publicize the results of its Open Season. 

On April 7, 2010, Denali filed a Request for Commission Approval of its Plan for 

Conducting an Open Season. Denali’s Open Season Plan offers prospective shippers the 

opportunity to bid for service on the following FERC jurisdictional facilities: 1) two 

Transmission Lines, one beginning in the Point Thompson area and the other beginning 

at the Central Gas Facility in the Prudhoe Bay Unit, both of which will transport natural 

gas to the GTP; 2) a GTP to be located in the Prudhoe Bay Unit on the Arctic North 

Slope (ANS) that will treat and condition the gas for delivery to the Alaska Mainline; and 

3) the Alaska Mainline, a 730-mile-long, 48-inch-diameter pipeline originating at the 

outlet of the GTP and extending to the international border between Alaska and Canada, 

having at least five in-state delivery points along the pipeline route. On June 7, 2010, the 

Commission issued an Order Approving Denali’s Open Season Plan with minor 

modifications. 

 On July 2, 2010, Denali issued its Notice of Commencement of the Alaska Gas 

Pipeline Open Season. Denali’s Open Season is scheduled to close on October 4, 2010. 

Any shipper awarded capacity as a result of the Open Season must sign a binding PA 

before the close of the Open Season and must perform its obligations under the PA by 

February 1, 2011. For all signed PAs for which shippers have satisfied their obligations 

under the PAs, Denali intends to execute the PAs within 30 days. 

Within ten days of execution of a PA, Denali will publicly announce the name, 

term, and capacity awarded each shipper. Within twenty days after PAs have been 

signed, Denali will submit to the Commission copies of all executed PAs. 

Denali states that if executed PAs result in capacity reservations at the inlet of the 

Alaska Mainline greater than or equal to 85 percent of the design capacity of the Alaska 

Mainline, Denali may reconfigure the current design to meet the aggregate capacity 

reserved and will inform shippers of revised rate estimates. 

If executed PAs result in capacity reservations on the Alaska Mainline of less than 

85 percent, the obligations of both the shippers and Denali will be suspended and Denali 

will consult with shippers to determine if shippers are willing to make additional firm 
- 5 -

commitments to meet project requirements, or if shippers are interested in a modified 

project designed to deliver gas to North America, or to a gas liquefaction facility at a 

location specified by interested shippers. 

E. Other Projects 

The Alaska Gasline Port Authority is the sponsor of an Alaskan liquefied natural 

gas (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. 

On March 19, 2010, the Commission responded to questions raised by the State of 

Alaska concerning the jurisdiction of an in-state pipeline. The Commission’s response 

and staff analysis concluded that under most circumstances the Commission would likely 

not have jurisdiction over an in-state pipeline. However, the response emphasized that the 

Commission would not be able to rule on the question of jurisdiction until it is presented 

with a specific. Alternatively, a party could request that the Commission make a 

determination via a declaratory order. 

In April, Alaska HB 369, created the Joint In-State Gasline Development Team, 

requiring the development of an in-state natural gas pipeline plan to be submitted to the 

Legislature by July 1, 2011, that provides for a natural gas pipeline that is operational by 

December 31, 2015. HB 369 directs the Alaska Housing Finance Corporation to oversee 

the in-state gasline project plan established in the bill and also sets up an advisory 

council. The Housing Finance Corporation has created the Alaska Gas Development 

Corporation (AGDC) to carry-out or aid others in the planning, constructing, and 

financing in-state natural gas pipeline projects. In response to HB 369, the Alaska 

Natural Gas Development Authority (ANGDA) decided to cease activity on the 460-mile 

“Beluga to Fairbanks” pipeline proposal, saying it would defer to the Joint In-State 

Gasline Development Team. 

On April 16, 2010, Yukon Pacific Company, L.P. (Yukon Pacific), requested that 

the Commission extend the timeframe within which Yukon Pacific must commence 

construction of the Anderson Bay LNG facilities for an additional three years. On 

May 22, 1995, the Commission approved the construction and operation of the facilities 

for Yukon Pacific’s LNG export terminal, giving Yukon Pacific three years from the date 

of the order to commence construction. Previously, Yukon Pacific had sought and 

received four 3-year extensions of the construction time frame. 
- 6 -

On May 14, 2010, the Commission issued a letter order from the Director of the 

Office of Energy Projects finding that the analysis and findings of the March 1995 Final 

EIS, adopted in the Commission’s May 22, 1995 Order, were outdated and can no longer 

be used to support the authorization of Yukon Pacific’s Anderson Bay LNG project. 

Thus, Yukon Pacific’s request to extend the time to commence for construction was 

denied. The letter order further stated that after May 22, 2010, Yukon Pacific’s authority 

to construct and operate the LNG export terminal at the Anderson Bay site is no longer 

valid. The letter order stated the findings therein will not have any direct bearing on any 

future consideration of an LNG export terminal option for the eventual marketing of 

Alaskan natural gas outside of the state, including the refilling of an application for 

Yukon Pacific’s project.

III. Related Federal and Canadian Activities 

A. Operations of the Federal Coordinator 

The Office of the Federal Coordinator (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 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. 

On May 26, 2010, the OFC issued the First Phase Consolidated Implementation 

Plan – Alaska Pipeline Project pursuant to section IV(B)(3) of the Memorandum of 

Understanding Related to an Alaska Natural Gas Transportation Project.

4

 The 

Implementation Plan provides details of federal agency activities, roles and 

responsibilities for the APP undertaken by TC Alaska. This federal regulatory review 

process will help expedite the regulatory activities of affected agencies regarding the 

project. Previously, on June 9, 2009, the OFC completed and issued the First Phase 

Consolidated Implementation Plan for Denali. 

 4

 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. 
- 7 -

The OFC, in coordination with the Commission, prepared a matrix of major 

federal permits and authorizations required for an Alaska natural gas pipeline. The 

permit matrix will identify and describe the major authorizations required by 

participating federal agencies, with an emphasis on those requiring early attention during 

the Commission’s pre-filing review and necessary for the preparation of the EIS. State of 

Alaska authorizations that require environmental analysis will be noted. The matrix will 

identify data sets each federal agency will require from applicants and when the 

information must be submitted (such as for a complete application, prior to construction, 

after construction, etc.). The federal agencies will use the matrix to reduce overlapping 

and redundant data collection. 

C. Developments in Canada 

 TransCanada Corporation (TransCanada) recently completed its Open Season in 

Canada to solicit shipper bids for transportation capacity. Denali Canada – The Alaska 

Gas Pipeline (West), Inc. (Denali Canada) is conducting its Open Season in Canada from 

July 6 to October 4, 2010. The open season process in Canada is very similar to that in 

the United States, providing potential shippers with the information they need to consider 

making shipping commitments, and providing information to TransCanada and Denali 

Canada on the viability and design of the projects. 

A different permitting process would apply to the Canadian portions of the 

TransCanada project than with the Denali Canada project. However, Canadian officials 

expect permitting timelines for both projects to coincide with permitting and regulatory 

activity in the United States. 

 The Canadian portion of TransCanada’s project (also known as the Foothills 

Project) received National Energy Board (NEB) certificates of public convenience 

in the late 1970’s. These certificates have terms and conditions that must be 

complied with, and which will require further approvals from the Northern 

Pipeline Agency (NPA) and the NEB. The Northern Pipeline Act (1978) 

established the NPA as a project-specific agency to act as a single window 

between the Foothills Project and the Canadian Federal Authorities. 

 The Denali Canada project does not hold any authorizations in Canada. It requires 

a review and hearings by the NEB pursuant to the Canadian Environmental 

Assessment Act and National Energy Board Act. The Major Projects 

Management Office (MPMO) will coordinate the involvement of all Canadian 

Federal departments during that process. 
- 8 -

IV. Conclusion 

During this last reporting period, both Denali and TC Alaska concentrated their 

efforts on preparing for and holding their respective Open Seasons. The Open Season 

Plan for TC Alaska concluded on July 30, 2010. Denali began its Open Season on July 2, 

2010, and it will close on October 4, 2010. As stated above, both project sponsors are 

deferring much of the field work necessary to gather environmental data until project 

certainty is confirmed by the results of their respective Open Seasons. For those studies 

that require more than one year of data gathering and analysis (such as updating the 

subsistence databases), delaying the initiation of this work could also delay the filing of a 

complete application with the Commission. This is most problematic for the TC Alaska 

proposal because of its commitment under the State of Alaska’s Gasline Inducement Act 

Program to file with the Commission in October 2012. 

While project development is continuing, there are major impediments to the 

successful completion of an Alaska pipeline (i.e., long lead time for approvals and 

construction, high cost, unique environment, and international scope). Because it is very 

unlikely that more than one Alaska gas pipeline would ever be built, the project sponsors 

are being encouraged at the federal and state level to join together in a single effort, 

thereby avoiding the consequences of a prolonged, duplicative regulatory review.