The Canadian National Energy Board has recommended construction of a pipeline along the Alaska Highway to move natural gas from Alaska to U.S. markets.

The $8.5 billion pipeline would be utilized to carry the 22 trillion cubic feet of gas in proven Alaskan reserves from Prudhoe Bay to Canada and the lower 48 United States. Experts estimate that it will be the early 1980s before gas would move through the pipeline.

One major condition set by the board in a report issued today, however, would require the successful applicant to file plans by July 1, 1979, for connecting line feeding Canadian western Arctic gas into the main line. This gas would destined for Canadian consumers.

The board's recommendations favor Foothills (Yukon) Ltd. of Calgary and appear to scuttle the rival project along the Mackenzie River proposed by Arctic Gas Pipeline Ltd., a 15-company American-Canadian consortium including both countries' largest petroleum and pipeline interests. Arctic Gas has sunk $140 million into its plan.

Foothills has combined with North-west Pipeline Corp. of the United States to form Alcan Pipeline Co.

The Canadian board's decision narrows down the options to either Alcan or an "all American" route proposed by El Paso Natural Gas Co. of Texas.

The board recommendations must by approved by the federal Cabinet, but it would take a major reversal and subsequent legislative intervention to block the Foothills plan, which government energy officials say is unlikely.

The board termed "environmentally unacceptable" all three routes proposed by Arctic Gas to move Alaskan gas to connect with its proposed Mackenzie Valley line.

The board said more time was needed to resolve social and economic concerns before a Mackenzie Valley pipeline could be built.

The three-volume, 26,000-word report says social and economic impact of the Foothills line can be held "to tolerable leveis" and environmental damage can be "overcome by avoidance or mitigative measures."

The proposed 4,700-mile Alcan pipeline follows the route of the Alyeska oil pipeline south through Alaska, jutting off at Fairbanks to cut through the southern Yukon. British Columbia. Alberta and Saskatchewan to the U.S. border. The Alyeska line, just opened, carries oil to tankers at the Alaskan port of Valdez.

The U.S. Congress has passed legislation providing for the Canadian and American governments to coordinate their decisions on construction of a pipeline. Under this legislation. President Carter is to make his decision by Sept. 1, but an extension until the end of the year is possible.

The U.S. Federal Power Commission recommended earlier this year an overland route through Canada to move Alaskan gas. The commissioners tied 2-2 on whether it should be an Alcan or Arctic Gas project.

The commission also recommended that if an overland Canadian route is not selected the United States should approve the "all-American" line proposed by a consortium headed by El Paso Natural Gas Co. of Texas. El Paso proposed a pipeline to carry the gas to Valdez where it would be liquefield, then shipped to tankers to the U.S. West Coast.

A U.S. interagency environmental task force recommended Friday against construction of any of the three proposed pipelines. The report said, however, that the Alcan proposal was the most acceptable of the three.