Potential organizational problems of the proposed Alaska natural gas pipeline project

by R. E. Horvath

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This paper discusses some of the organizational problems that may occur during the construction of the Alaskan natural gas pipeline. To deal with the unprecedented size and nature of this privately-financed venture, the federal government will emplace two new regulatory mechanisms--the Office of the Federal Inspector and the incentive rate of return. The Federal Inspector will expedite and coordinate federal involvement with the project, and the incentive rate of return will provide rewards (in the form of a higher rate of return) for cost control measures undertaken by the consortium building the pipeline. The focus of this paper is on the organizational aspects of the implementation of the Office of the Federal Inspector and the incentive rate of return.

This report is part of the RAND Corporation Note series. The note was a product of the RAND Corporation from 1979 to 1993 that reported other outputs of sponsored research for general distribution.

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