President Clinton has determined that allowing exports of Alaskan North Slope (ANS) crude is in the national interest, formally ending a 23 year ban.
British Petroleum, the biggest ANS producer, said exports to the Far East could begin as early as this month.
The law that enabled construction of the trans-Alaska crude oil pipeline expressly reserved ANS production for domestic use. California producers have long complained that a surplus of Alaskan oil on the Lower 48 West Coast has depressed their production and the prices for it.
A law enacted last year repealed the export ban, but it required further studies and a finding by the president that exports were in the national interest.
Clinton said, "Permitting this oil to move freely in international commerce will contribute to economic growth, reduce dependence on imported oil, and create new jobs for American workers. It will not adversely affect oil supplies or gasoline prices on the West Coast, in Hawaii, or in the rest of the nation."
Conditions, effects
Last year's repeal law requires ANS oil exports to be carried in U.S.-flag tankers crewed by U.S. merchant seamen. The law allows the president to impose new export restrictions in the event of severe oil supply shortages.
Clinton imposed these further condition on ANS oil exports:
- Tankers carrying the oil must remain outside the 200 mile Exclusive Economic Zone. Clinton said, "This will ensure that tankers in the ANS export trade remain far from the U.S. coastline and environmentally sensitive areas along the Aleutian Islands."
- ANS export tankers must be equipped with a satellite communications system to allow the Coast Guard to monitor their positions.
- The tankers must be inspected yearly by the Coast Guard.
- The tankers must flush their ballast water in deep ocean before entering Alaska's Prince William Sound. "This will help prevent introduction into Alaskan fisheries of nonindigenous, aquatic nuisance species."
Clinton said an interagency review found that lifting the export ban will generate as many as 25,000 more jobs, additional oil production of 100,000 b/d, and as much as $2 billion in additional federal, state, and local royalty and tax payments. It also will reduce tanker movements along the West Coast.
Clinton said the review predicted no harmful effects on Washington state consumers, refiners, or environment, although "concern is clearly rising in that state about the increasing volume of vessel traffic projected to occur as a result of other factors."
The president ordered the Coast Guard to accelerate its plan for a private-sector vessel assistance system, and the Transportation Department to determine the need for additional, cost effective measures to protect the marine environment and prevent shipping accidents in Washington state.
Producers' reaction
The California Independent Petroleum Association said oil companies have begun preparations for shipping Alaskan crude oil to Pacific Rim customers.
Jerry Hoffman, chief executive officer of Berry Petroleum, Co., Taft, Calif., said, "California independent producers have been working for this day for many years. We have long believed that allowing the export of ANS crude oil would strengthen the nation's economy, increase domestic oil production, and create thousands of jobs."
Richard Olver, BP Exploration's deputy chief executive, said, "Many people deserve credit for making this happen. A strong bipartisan effort by members of the House and Senate, along with the Department of Energy, made the passage of the export legislation possible."
Taiwan's Chinese Petroleum Co. has agreed to buy 10,000 b/d, or about one tanker cargo a quarter, from BP.
Olver said, "While export markets will be very important to us, California and the Pacific Northwest will remain the primary market for ANS crude oil because of their proximity to Alaska." Copyright 1996 Oil & Gas Journal. All Rights Reserved.
