Alaskans Campaign to Change

OIL INDUSTRY

By , Special to The Christian Science Monitor

DURING the energy crisis of the 1970s, as oil companies, environmentalists, and consumers battled over Alaskan oil, a compromise was struck: In exchange for allowing construction of an 800-mile oil pipeline across the Alaska wilderness, Congress banned the export of North Slope crude carried by the pipeline, reserving America's oil for Americans.

Since then, the export ban has been an irritation to Alaskans, who depend on oil revenues for some 85 percent of state government operating funds.

``I think it's wrong, it's unconstitutional, and it's got to stop,'' Gov. Walter Hickel said in his state-of-the-budget address last week. ``So tonight, in the spirit of NAFTA and GATT and free trade, I'm calling on President Clinton: Mr. President, lift that ban now.''

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Mr. Hickel last year filed a pair of lawsuits opposing the ban as unconstitutional and seeking $2.5 billion in damages for alleged lost revenues. Because of the export ban, most Alaskan crude is shipped from Valdez to the West Coast of the United States, where markets are considered glutted. Except for a small amount refined in Alaska for in-state markets, the remaining crude is shipped through the Panama Canal to the US Gulf Coast - costing $2.70 a barrel more than shipping crude to Japan, state officials say. The result is an annual revenue loss to the Alaska treasury of $150 million to $200 million, estimates Chuck Logsdon, the state's chief petroleum economist.

The Clinton administration's December energy plan included a call for a study of the effects of lifting the ban. ``Permitting [Alaskan] exports in the near term will potentially stimulate onshore California production and could initiate a less volatile transition away from imports in general,'' the Department of Energy policy statement said. Many independent California oil producers contend that the export ban is a source of their woes.

The California Independent Petroleum Association, representing some 200 of the state's 535 small oil producers, says lifting the Alaskan oil export ban will be the quickest way to prop up the industry, says executive director Dan Kramer. ``With the low oil prices, around April you will see the majority of our small producers and our medium-sized producers decide it's not economic to produce anymore.''

Prices for the benchmark California crude are hovering around $8 a barrel, near the 1986 low of $7, he says. Per-barrel production costs are $6 to $14, he says. Already, unemployment has swelled in the state's oil-producing areas. Small producers have laid off workers, cut wages, and cancelled capital projects, Mr. Kramer says.

Supporters of the Alaskan oil export ban rarely invoke national security as justification. Instead, they argue that US shipping jobs would be lost. The most ardent defenders of the ban are maritime lobbies and unions.

Protection of shipping jobs is one concern raised by US Rep. John Dingell (D) of Michigan, a key congressional supporter of the ban.

In a recent letter to Energy Secretary Hazel O'Leary, Mr. Dingell also said Alaskan crude exports could hike prices for US consumers and would break a solemn vow made in the 1970s, when a Midwestern route for the trans-Alaska pipeline was abandoned. ``To remove the ban would violate these assurances to the benefit of foreign interests,'' he wrote.

Dingell sponsored 1979 legislation that put the Alaskan oil export ban into statute as part of the Export Administration Act. Congressional action would be needed to remove the ban. US Rep. William Thomas (R) of California has introduced legislation to lift the ban, but he has yet to be supported on the issue by California's governor or senators, Kramer says.

The export ban has other implications. Rep. Don Young (R) of Alaska has argued that ending the ban could hurt the campaign to open the Arctic National Wildlife Refuge - opposed by environmentalists and sought by oil companies - to oil drilling.

Steve Hansen, Mr. Young's press secretary, says the congressman favors ending the ban. But ``the biggest and most effective argument that we have for opening [the refuge] to oil and gas development is to reduce America's dependence on foreign oil,'' Mr. Hansen says. ``If you tack that onto removing the oil-export ban, then what you're doing is diluting Alaska's strongest argument on the [drilling] issue.''

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