Plan to Export Alaskan Oil Unites Unlikely Allies
Critics see environmental risks and say plan would cut US jobs
EIGHTEEN years after oil began flowing through the trans-Alaska pipeline, chances are stronger than ever that Congress will allow some of it to be sold overseas.Skip to next paragraph
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A bill supported by Alaska's all-Republican congressional delegation would lift the export ban, originally slapped on North Slope crude as a condition for building the 800-mile oil pipeline.
The plan -- arising when gas-station lines are a distant memory and oil companies are trying to bolster flagging domestic production -- has raised alarms on the West Coast, where some residents worry about loss of refinery jobs. It also could determine whether oil companies can develop the huge oil reserves thought to exist in Alaska's Arctic National Wildlife Refuge.
Oil-export backers include some unlikely allies, such as Alaska's Democratic governor, California's Republican governor, Alaska and California oil producers, and the Clinton administration.
But the list of opponents also includes some odd couplings. Along with environmentalists, opponents include such heavy industry groups as domestic refiners, shippers, and shipbuilders. They note that the company standing to gain the most is foreign-owned: British Petroleum, which produces almost half of Alaska's oil.
Proponents of the plan argue that removal of market barriers would incrementally increase prices and spur new production, new jobs, and new government revenue.
A US Department of Energy study released last summer predicted significant net benefits if Alaska oil were allowed to be sold in Japan and other Asian markets closer to the state than the US Gulf Coast. The study predicted that by 2000 exports would generate 10,000 to 25,000 new jobs and add $700 million to $1.6 billion in royalty and tax income to the state of Alaska.
On March 1, President Clinton formally endorsed exports of North Slope oil, albeit with caveats. They include requirements that the oil be shipped in US-crewed and US-flagged vessels and that an environmental assessment be completed before the shipments start.
But opponents say that exporting Alaska oil to Asia, thus diverting some West Coast and Panama Canal shipments, would cost US shipyard and refinery jobs.
''There is no such thing as a free market in oil,'' says Howard Marlowe, director of the Coalition to Keep Alaska Oil, an industry group. ''In oil, it's the major companies that make the market, and they manage the market.''
Environmentalists add that new tanker routes to Japan would expose more of Alaska's coastline to oil spills and ballast-water pollution. Even if the ships are US-flagged, they will likely be large, foreign-built, and single-hulled, environmentalists say.
They also fear that exports will provide incentives to develop the Arctic Refuge, says the Wilderness Society's Pam Miller.
''Creating this new market and making it more profitable for the industry to deal with the oil will put more pressure on the development of the Arctic Refuge,'' Ms. Miller says. ''The desire of industry is to get access where they don't have access.''
Environmentalists are not unanimous in their opposition to Alaska oil exports. Candidates from Alaska's Green Party campaigned last fall in favor of lifting the ban, as long as ANWR is left untouched. Green Party leaders have argued that efforts devoted to opening the refuge to oil drilling would be better spent trying to unlock the secrets of West Sak, a huge but technically difficult and untapped field in the already developed Prudhoe Bay area.
Alaska's generally eco-friendly Governor Knowles says allowing exports would be one of several incentives for West Sak production. If they work, ''The pipeline has a long life ahead of it,'' he said. And that's important for the quality of life in oil-dependent Alaska, he says: ''I think the healthier an industry is and the healthier the state is, the better we can take care of our environment.''
But Marlowe says any justification for Alaska oil exports will disappear as production at Prudhoe Bay, six years past its peak, continues to slide: ''Sometime before two years, the West Coast will become a net importer [of oil] for the first time since the pipeline opened up.''