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Foreign Trade Effects of an Alaskan Natural Gas Pipeline

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Publication Date: March 2004

Publisher(s): Library of Congress. Congressional Research Service

Series: RS21787

Topic: Energy (Natural gas industry)

Coverage: Alaska

Abstract:

The Energy Information Administration (EIA), in the Annual Energy Outlook 2004 (AEO), projects increased demand for imported natural gas through 2025. The AEO reference case forecast assumes a natural gas pipeline will begin delivering Alaskan natural gas to the lower 48 state consuming markets in 2018. H.R. 6, the omnibus energy bill, contains provisions to enhance the future supply of natural gas through construction of a pipeline.

This report examines the effects of an Alaska natural gas pipeline on the U.S. current account balance. The EIA finds that if the pipeline is not constructed, natural gas prices will increase, markets will adjust, and imports of natural gas will increase. However, due to price induced market adjustments, the increase in imports is projected to be less than the gas volume lost from the lack of pipeline construction. As a result, if no pipeline is constructed, the effect on the current account balance will be less than the value of the amount of gas that was projected to be delivered through a pipeline. This report will not be updated.