The gas century: worldwide LNG developments may deal death blow to Alaskan pipeline dream

The growing interest in liquefied natural gas (LNG), which casts doubt on the viability of the Alaska gas pipeline, and the potential impacts on Canadian gas exports to the United States are discussed. There is currently a proposal before Congress for an Alaskan LNG project, and consensus appears to be building among American energy experts and law-makers that building a multitude of LNG facilities would be more flexible and cheaper than building the proposed Alaska pipeline. As further proof of the growing popularity of LNG, U.S. industry lobbyists are said to be rapidly gaining congressional support for the idea of building eight to ten billion cubic feet per day of LNG capacity along the U. S. coast. Either development, -- LNG facilities or the Alaska pipeline -- have the potential to seriously impact Canadian natural gas exports. If the Alaska pipeline is built, the addition of five billion cubic feet per day of new gas on the market would cause gas prices to fall; if the U.S. decides to subsidize its gas industry, Canadian gas would be put at a serious disadvantage. Conversely, if the Alaskan LNG proposal were to succeed, the potential demise of the Alaska pipeline would mean the loss of about 12,000 jobs that would be created during the Canadian construction phase of the pipeline, as well as the loss of tariffs. Industry experts predict that by 2005 LNG terminals will dot the periphery of the U. S. coast line; to prepare for these eventualities, Canadian companies, such as Irving Oil, TransCanada Pipelines and EnCana are taking note, and are scrambling not to be left out of the game. As proof of the seriousness of their concern, Irving Oil is adding a Can$500 million LNG facility to its Canaport terminal on the Scotian shelf; TCPL is working to supply an LNG terminal offshore Massachusetts, and EnCana is refurbishing a Louisiana salt cavern to prepare for storage of gas delivered to the Gulf Coast