WATCHING GOVERNMENT THE LAST ENERGY BILL?

President Clinton has signed into law a bill repealing the 22 year old prohibition against the export of Alaskan North Slope (ANS) crude.

The legislation also permits royalty relief for marginally economic deepwater fields in the Gulf of Mexico.

BENEFITS

Both actions make simple economic sense and neither will cost the federal government a dime. Alaska, the federal government, and Alaska and California oil producers all will benefit from lifting the ANS export ban.

The deepwater royalty relief provision will raise royalty and tax revenues for the federal government by enabling development of fields that otherwise would not be tapped.

Under the ANS export measure, the crude must be shipped on U.S. flagged and crewed tankers. Before exports can begin within 5-6 months the administration must determine that the exports will not harm the U.S. economy, environment, or national security.

An Energy Department study previously concluded that allowing ANS exports could result in a 110,000 b/d rise in U.S. production, create 25,000 jobs, and increase local, state and federal royalty and tax revenue by as much as $2 billion by 2000.

Exports are likely to be limited to 100,000 b/d-the same volume of ANS crude presently shipped to the Gulf Coast.

White House Press Sec. Mike McCurry said, "It's good fiscal policy, sensible economic policy and, most important, sound energy policy."

British Petroleum is the major producer of ANS crude. BP chairman and CEO Charles Bowman said, "We are very happy and pleased that we can now begin the process of establishing a market for ANS crude in the Pacific Rim countries as well as in the U.S."

Energy Sec. Hazel O'Leary said the royalty relief measure "will lessen America's dependence on volatile foreign sources of crude oil by helping unlock an estimated 15 billion bbl of oil in the deep waters of the central and western Gulf of Mexico."

LONG OVERDUE

It is deplorable that Congress took so long to pass such common sense energy measures.

Alaska and California congress-men have been urging repeal of the export ban for years, and in 1984 the Senate rejected an export amendment by Sen. Frank Murkowski (R-Alaska). The issue did not begin to move until the Clinton administration joined the crusade (OGJ, Dec. 20, 1993, p. 21).

Sen. Bennett Johnston (D-La.) proposed the royalty relief measure 3 years ago (OGJ, Aug. 31, 1992, p. 21) but had to overcome many objections and obstacles.

The ANS export/royalty relief measure is the first major piece of energy legislation to pass in the current Congress. And it is likely to be the last.

The only other major legislation pending is a budget bill rider which would permit leasing on the Arctic National Wildlife Refuge Coastal Plain. The Clinton administration has threatened to veto any bill that allows ANWR exploration (OGJ, Nov. 6, p. 31).