Oil behemoths BP and ConocoPhillips have scrapped plans to build a $35 billion pipeline to move natural gas from Alaska to the Lower 48. BP and ConocoPhillips claim that the decision to abandon the massive natural gas pipeline project was driven by weak customer demand.

The decision, though not a complete shocker, was nonetheless a blow to Alaska's long-delayed hopes of exporting more of its abundant natural gas. A rival proposal, backed by Exxon Mobil and TransCanada Corporation, a company focused on natural gas transmission, remains in the works. However, the announcement by the BP-Conoco coalition, known as Denali, questions the viability of an Alaskan pipeline project. The $35 billion pipeline was to carry approximately 4.5 billion cubic feet of natural gas out of Alaska per year.

Opponents of the pipeline claim that technology to exploit natural gas locked in shale deposits in the Lower 48 eliminates the need for Denali. Shale basins are scattered across the U.S.

[Source: UPI]

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