A push to authorize shipments of Alaskan North Slope (ANS) crude to the world market hit a familiar snag last week.
California oilmen have been pressing for such exports, banned by the 1973 federal law that enabled construction of the trans-Alaska crude oil pipeline, to bolster demand and prices for their production. They long have said ANS crude is flooding the Lower 48 West Coast market and it makes more economic sense to export the oil to the Far East.
The U.S. Senate will debate renewal of the Export Administration Act early next month, and Alaska Sens. Frank Murkowski and Ted Stevens plan to offer an amendment to lift the ban. House committees did not strike the ban in their bills.
MARITIME POSITION
A breakthrough occurred recently when five maritime unions agreed the ban should be dropped if the exports were carried in American-flag tankers.
Last week, the Coalition to Keep Alaska Oil charged exports would benefit a unit of British Petroleum Co. plc, the largest ANS producer, but hurt refinery and maritime workers.
Howard Marlowe, coalition director, said, "Those who think we might create some jobs in the area of domestic production are kidding themselves and misleading us. The fact is that oil produced in existing California fields simply cannot serve as a substitute for Alaskan oil."
He said West Coast refineries would have to retrofit to run more heavy California crude. So demand is limited.
Two key House committee chairmen, John Dingell (D-Mich.) of energy and power and George Miller (D-Calif.) of natural resources, oppose lifting the ban.
Miller said even if ANS crude is hurting California prices, "it is difficult to understand how allowing exports and increasing the cost of energy would benefit the majority of Californians or boost an economy that is struggling to recover from recession.
"Moreover, the likelihood that Alaskan oil would be primarily replaced in the market not by increased production from California producers but rather by increased imports also raises serious environmental concerns about foreign flagged tankers operating on the West Coast."
Robert Wages, president of the Oil, Chemical & Atomic Workers International Union, said, "The West Coast refining industry is already threatened by gasoline imports from low cost foreign refiners. In California, refinery employment has declined from 23,000 in 1990 to approximately 19,500.
"If West Coast refiners lose their supply of preferred ANS feedstocks, the higher cost of using foreign oil would further undermine their competitiveness."
THE ADMINISTRATION
At this point, the opinion everyone wants to know is the Clinton administration's.
The Department of Energy has prepared a study that contains no recommendations. However, Energy Sec. Hazel O'Leary says the study has persuaded her the ban should be lifted.
The oil industry relief package drafted by 119 congressmen also calls for removing the ban (OGJ, Mar. 28, p. 35). Rep. Bill Thomas (R-Calif.) was expected to argue for repeal when the group briefed President Clinton late last week.
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