Lessons Learned from Constructing the Trans-Alaska Oil Pipeline

In 1968, a feasibility cost study estimated that an oil pipeline system from Prudhoe Bay to Valdez, Alaska, would cost $863 million for a 500,000 barrel-a-day line or $1.046 billion for a 1.2 million barrel-a-day capacity. After construction began in 1975, the Alyeska Pipeline Service Company, the agent for the companies designing and building the pipeline, established a base control budget of about $6.4 billion. By December 1977, this budget had been exceeded by about $1.5 billion. The $19.8 million additional direct labor hours needed to complete the project accounted for most of the $1.5 billion increase.