The Carter administration, under pressure from Canada, may seek to have U.S. consumers help support the construction of the proposed $20 billion Alaskan gas pipeline and share in the risk of the project failure, congressional sources said yesterday.
Congressional approval of such a change would be required. President Carter's 1977 decision approving the pipeline project specified that U.S. natural gas consumers wouldn't have to begin supporting the project until it was completed and ready for operation.
Energy Department officials privately raised that possibility of consumer participation in the project last week, as they sought to end a long deadlock over the project's financing.
Northwest Gas Pipeline Co., developer of the proposed project, and the three energy companies that own most of the natural gas reserves on Alaska's Prudhoe Bay have been trying since late last fall to reach a financing agreement.
Intense negotiations over the past week reportedly have produced a joint "statement of intentions" by the two sides, committing themselves to solve the financing issues, congressional sources said.
The developer and the producers also are esentially in agreement on carrying out the detailed design and engineering work on the 2,769-mile pipeline.
"We're ironing out the fine points. It's not still up in the air," said an Energy Department official.
The administration hopes these two documents will satisfy Canadian officials, who have become concerned about the viability of the project.
If Canada requires stronger U.S. backing for the project, the administration may ask Congress to waive the 1977 provisions ruling out consumer participation in the project's financing, congressional sources said.
Canada's National Energy Board recently has called for solid assurances from the United States that the project will be constructed from Alaska's North Slope to the U.S.-Canadian border. The current timetable calls for construction to begin in 1983, with the first gas shipments flowing in 1985-86. c
From the Canada-U.S. border, two separate links will carry the gas to the West Coast and the U.S. Midwest.
The Canadian energy board also wants guarantees that U.S. funds will be available to pay for construction of the Canadian segment whether the more difficult Alaskan link is built.
Congressional sources predicted yesterday that it would be very difficult to get congressional support for consumer participation in the financing.
The Northwest consortium, headed by John G. McMillian, won a contested bidding in 1977 for the rights to develop the pipeline. Two other applicants said the financial risks of construction and operation of the pipeline were too great for the natural gas pipeline industry to bear alone and that a consumer contribution would be required as the project was developed.
The McMillian group said it would raise the construction funds itself, but it now concedes it needs help. This led to the negotiations between Northwest and the North Slope gas producers -- Exxon Corp., Atlantic Richfield and Sohio.
The Energy Department has prodded the two sides hard to reach a compromise, considering the pipeline a vital energy project for the mid-1980s and beyond. From the start, DOE has resisted any direct federal financial support, contending the private sector should be able to build and operate it.