The 3,500-mile pipeline would follow a southern route instead of a northern route that would have pushed the project offshore into waters used for hunting whales.

The Bush administration has insisted that Congress should not dictate the route to oil companies, but let economics drive companies' choice.

Democrats on the panel, who have complained about being shut out of writing the draft legislation, had no immediate comment.

Sen. Pete Domenici and Rep. Billy Tauzin - who head the joint congressional committee working out differences in each chamber's energy bill - included a mandated pipeline route in the draft of combined legislation released this week.

The pipeline would ship natural gas to the Lower 48 states from Alaska's energy-rich North Slope, estimated to hold 32 trillion cubic feet of gas reserves.

The route calls for the pipeline to stretch from Prudhoe Bay in northern Alaska to near Fairbanks and then along the Alaska Highway, eventually reaching Chicago.

The White House has indicated support for government-backed loan guarantees for 80 percent of the project's construction costs up to $18 billion.

But the administration is strongly opposed to subsidies for the pipeline owners if the price of gas falls too low.

The White House said it fears the tax credit would distort markets in other natural gas producing states and undermine support of the pipeline from Canada, which will have to issue permits for part of the pipeline crossing its territory.

Congressionally mandated tax incentives could be crucial to convince three firms - ConocoPhillips, BP Plc. and Exxon Mobil Corp. - to commit to the massive 10-year period to build the pipeline.

The draft also took on less controversial topics like hydrogen power, new coal technology and energy efficiency.

Domenici indicated last week that negotiators will "get our feet wet" with less controversial topics before moving on to upgrading the electricity grid, fighting global warming and drilling in the Arctic national Wildlife Refuge.

Other parts of the draft bill agreed upon by Domenici and Tauzin, which will be circulated among other lawmakers, would:

* Provide $3.4 billion for fiscal years 2004 through 2006 to help low-income families pay heating and cooling bills

* Provide $325 million in 2004, rising to $500 million in 2006, to weatherize homes of low-income families

* Authorize $2.15 billion by 2008 for research into producing hydrogen to power cars and generate electricity

* Allow the Energy Department to spend $2 billion to research ways to generate electricity from cleaner coal with fewer harmful emissions.