Much of the attention to energy issues in recent years has focused on new production in places like Pennsylvania and North Dakota, as well as on what is happening to increase production in traditional energy powerhouses like Oklahoma and Texas.

Though Alaska has long been considered a leading energy-producer, it hasn’t been regarded as a key part of the current, largely shale-driven supply revolution that is creating a new era of American energy abundance.

An agreement that Alaska officials brokered with a number of industry participants last week could go a long way to changing that perception.

Alaskans have known for nearly half a century that the North Slope possesses enormous natural gas deposits – perhaps as much as 200 trillion cubic feet. But while the energy industry has successfully produced more than 16 billion barrels of oil from Prudhoe Bay, producing the region’s natural gas and transporting it to markets has been an ongoing challenge.

Developing those gas resources may finally happen now.

The parties – including TransCanada, ExxonMobil, BP, ConocoPhillips, and the state government – are working on a plan to build an 800-mile natural gas pipeline from the North Slope fields to Alaska’s Kenai Peninsula for export to Asian markets.

Tens of billions of dollars of investment required

The state will take an equity share in the project, providing financial support and alignment among all necessary parties to ensure it moves forward. That will help because making this decades-long dream a reality for the citizens of Alaska will require tens of billions of dollars of investment, both for the pipeline and for a related gas liquefaction facility along the southern coast.

It will also require that certain fiscal terms be ironed out by state lawmakers during the upcoming legislative session. The stability and durability of those terms will be an important factor in determining whether the project moves forward.

So it’s not a done deal. But if these things come to pass, the project promises to inject a significant boost into the state’s economy.

Oil production from the mature Prudhoe Bay field has been declining in recent years, adding to economic anxiety in Alaska. A surge in natural gas production would go a long way to help keep the state’s finances on solid ground, while offering the increased economic activity and employment growth that have become a hallmark of new energy production in much of the Lower 48.