Declining crude prices resulted in spending cuts on several major projects in Alaska as the state is attempting to deal with a $3.5 billion budget deficit. These projects include the Alaska Stand Alone Pipeline, a 727-mile, 36-inch diameter natural gas transmission line that will connect North Slope production to the ENSTAR Pipeline.

“The state’s fiscal situation demands a critical look and people should be prepared for several of these projects to be delayed and/or stopped,” a spokesman for Gov. Bill Walker told The Alaska Dispatch.

The project, which is key to the development of a pipeline to transport gas from the North Slope to the Lower 48 states, has not been cancelled, but additional funding and related hiring and contracting have been ceased. The state will continue to fund salaries and contractually required spending related to the project for the time being. It is expected that a decision on the long-term outlook for this and other projects will be decided in early 2015.

While the state’s coffers are currently well stocked at just under $10 billion, lower oil prices are expected to negatively impact economic activity in the state, thus lowering the amount of taxable income available.