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Vol. 16, No. 10 Week of March 06, 2011
Providing coverage of Alaska and northern Canada's oil and gas industry

FERC notes proponents behind; state gaining on infrastructure

TransCanada and Denali are both taking longer than they once projected to complete precedent agreements with potential shippers who bid on capacity in open seasons the projects held last year.

The State of Alaska, however, is moving ahead on needed infrastructure repairs to support construction of a natural gas pipeline from the North Slope to market.

The Federal Energy Regulatory Commission, in its biannual report to Congress on progress in licensing and constructing an Alaska gas pipeline, said both Denali and TransCanada Alaska reported at the end of their respective open seasons that they had received bids for significant volumes for potential shippers.

TransCanada missed its intended date of Dec. 31for executed precedent agreements; Denali missed its self-imposed deadline of Feb. 1, with both companies reporting continuing commercial discussions, FERC said.

TransCanada plans to file a complete application with FERC in October 2012; Denali plans to file in October 2013.

Infrastructure improvement

In its August 2009 report to Congress FERC identified “long-term infrastructure improvement as a potential impediment to constructing an Alaska natural gas pipeline.”

That was based on assessments by Denali, TransCanada Alaska and the Alaska Department of Transportation and Public Facilities.

FERC said in the 2009 report that infrastructure assessments “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.”

FERC said in its 2011 report that there has been “significant progress in addressing this need.”

Bridges crucial

A critical part of that infrastructure — because of long lead times — is the state’s bridges.

The Department of Transportation and Public Facilities knows the bridges that need to be fixed, and they need to be fixed whether to serve the public, for general commerce or for the gas pipeline project, DOT&PF’s director of program development, Jeff Ottesen, told Petroleum News by phone on March 1.

He said that both TransCanada Alaska and Denali — the proponents of large-scale gas pipeline projects — have met with the department and basically agree with the department on what needs to be done.

Ottesen said bridges have a higher priority than in the past decade, which gives FERC confidence. But that’s because bridges are the key link for ground transportation in the state, not because of the gas pipeline, he said.

“Bridges are mission critical,” Ottesen said, and have to come first because Alaska doesn’t have secondary routes.

A draft report of the department’s 2010 bridge report identifies bridge ownership: DOT&PF owns 788; cities and boroughs own 143 and 22 are owned by other state agencies; in addition, there are federally owned bridges in the state.

Federal standards for the structural condition of bridges categorizes bridges needing work as either structurally deficient, which indicates deterioration, or functionally obsolete which identifies an out-of-date design.

Alaska-specific issues

A chart of the last decade shows that DOT&PF-owned bridges identified as structurally deficient peaked in 2003, with a deck area of 844,000 square feet. By 2010, that number had dropped to 527,000 square feet, a decline in 36 percent, the department’s bridge report says.

Based on bridges currently in the STIP, the Statewide Transportation Improvement Program, for rehabilitation and replacement, that statistic is expected to improve further, the report says.

The bridge report identifies Alaska-specific factors in bridge repair, including lack of redundancy or alternate routing in the state’s highway system; needed access for natural resource development; Alaska’s environmental factors such as freeze-thaw cycles, coastal storms, melting permafrost and harsh winter conditions; specialized structures such as ferry and seaplane ramps; and the short inspection season.

The report notes that while bridge rehabilitation and replacement has in the past occurred in connection with highway improvement, recent national attention to bridge conditions has resulted in increased funding for standalone bridge project.

“One of the factors leading to this shift in strategy in Alaska is the need to improve the state’s infrastructure for support of energy and resource development, together with the recognition that the backlog of deficient bridges was growing too rapidly and required a greater emphasis in bridge rehabilitation and replacement,” the report says.

But it takes time: Even with high-priority status, it took from 2004 to 2010 to replace the Tanana River Bridge on the Alaska Highway. The new bridge opened for traffic last year; inspection was completed this year and the old bridge demolished.

—Kristen Nelson

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