The purpose of this paper is to examine two of the alternatives for transporting natural gas from the Mackenzie Delta-Beaufort Sea area of the Northwest Territories in Canada and from Prudhoe Bay on the Alaska north slope. The first of these is a Mackenzie Valley pipeline proposed by Canadian Arctic Gas Pipeline Ltd to transport both Alaskan and Mackenzie Delta gas to southern markets. The other alternative analysed is the all American El Paso proposal to transport solely Prudhoe Bay gas to

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... markets. In particular the cost-benefit analyses of these proposals as undertaken by the D.0.I.-Aerospace study and by Helliwell et al., are examined. The paper attempts to highlight differences, both methodological and other, between two studies of the economic returns in exploiting northern natural gas resourses. The Department of the Interior study was undertaken to examine two alternative methods of transporting Prudhoe Bay gas from the Alaskan north slope; a pipeline and liquification route (proposed by El Paso Natural Gas Co.), and transportation via an all pipeline route which would traverse Alaska, the Yukon Territory, and the Northwest Territories, and thence through southern Canada into the continental U.S.A. The major differences highlighted include different estimates of capital and operating costs, for the proposed Mackenzie Valley Pipeline, between D.O.I, and CAGPL. Also evaluated are the different lifetime assumptions, estimates for the supply price of capital and the discount rate, and the treatment of Canadian taxes.