This study investigates some of the reasons why the natural gas which is produced along with the oil at Prudhoe Bay is not being delivered to a market, and three of the possible methods of delivering this gas energy to a market. These three alternatives include a proposal to build a natural gas pipeline through Canada, a liquefied natural gas (LNG) proposal and a proposal to manufacture fuel grade methanol from the natural gas at Prudhoe Bay which would be shipped through the existing Trans Alaska Pipeline System (TAPS). A brief review of the engineering, economic, environmental, supply/demand and market aspects, and most importantly the political considerations affecting the selection of any of these three alternatives is presented.
The concern over marketability of gas delivered through the proposed pipeline through Canada is responsible for this proposal being held in abeyance, even though it was politically selected as the Alaskan Natural Gas Transportation System in 1977. If an alternative system is to be selected, action should be taken before there is a political decision to force the construction of the pipeline through Canada.
From virtually every viewpoint the methanol proposal is the most reasonable method of delivering the Prudhoe Bay gas energy to a market. It is shown that either of the other alternatives would result in the cost of the Prudhoe Bay gas energy being higher than the cost of energy from imported oil or natural gas.