[Congressional Record Volume 140, Number 87 (Friday, July 1, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 1, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
  DEPARTMENT OF ENERGY STUDY ON ALASKA NORTH SLOPE OIL RECOMMENDS THE 
                          RIGHT POLICY CHOICE

                                 ______


                         HON. DANA ROHRABACHER

                             of california

                    in the house of representatives

                        Thursday, June 30, 1994

  Mr. ROHRABACHER. Mr. Speaker, the U.S. Department of Energy today 
released its long awaited study on whether the decades-long ban on the 
export of Alaska North Slope oil should be repealed.
  Their study recommends repeal of the ban.
  The study found that there would be a significant number of benefits 
from allowing the export of North Slope crude oil.
  This is good news for our balance of payments and for our Nation's 
energy security.
  I urge my colleagues to read today the following Executive Summary of 
the Energy Department's study. Every Member's office has received the 
complete study. I urge every Member to closely examine this study 
during the July 4th district work period. The repeal of the ban on the 
export of North Slope crude oil will be a priority issue when we return 
to Washington.

      Exporting Alaskan North Slope Crude Oil--Benefits and Costs


                executive summary--overview of findings

       Our examination of the Alaskan North Slope (ANS) crude oil 
     export issue found that there would be a significant number 
     of benefits to the United States from allowing the export of 
     ANS crude. The principal conclusions of this study are:
       1. Exporting ANS crude oil would partially relieve the 
     downward pressure on West Coast prices of both ANS and 
     California crude oils. Little, if any, increase in consumer 
     petroleum prices would be likely.
       2. Higher crude oil prices would lead to better oil 
     producer profitability, which in tern, would raise investment 
     in domestic oil production.
       (a) Incremental production in Alaska and California could 
     be as high as 100 to 110 thousand barrels per day (mb/d) by 
     the end of the decade.
       (b) Reserve additions in Alaska alone could be as large as 
     200 to 400 million barrels--a size that roughly equates to 
     the known reserves in major North Slope fields such as Point 
     McIntyre or Endicott.
       3. Improving conditions for West Coast oil producers would 
     raise royalty revenue for the Federal Government and tax and 
     royalty revenues for the States of Alaska and California. 
     During the years 1994 to 2000:
       (a) Federal receipts related to royalties and sales of Elk 
     Hills oil production would total between $99 and $180 million 
     (1992 $).
       (b) Alaska would gain $700 million to $1.6 billion in State 
     severance taxes, income taxes, and royalties.
       (c) California returns from the State share of Federal 
     royalties and State and local taxes would be $180 to $230 
     million.
       (d) Under the low oil price scenario three-fourths of these 
     benefits accrue between 1994 and 1996.
       4. Exporting ANS crude oil would result in a substantial 
     net increase in U.S. employment. In all cases examined, gains 
     related to increases in oil industry investment and State and 
     Federal revenues would be much larger than job losses in the 
     U.S. maritime sector.
       (a) By 1995, the net increase in U.S. employment would be 
     from 11,000 to 16,000 jobs. By the end of the decade, 
     exporting ANS crude could generate from 10,000 to 25,000 
     jobs. The range of estimates grows over time due to 
     uncertainty in future oil prices.
       (b) The estimate of the level of net job generation is 
     relatively insensitive to whether ANS oil is exported on 
     foreign-flag, U.S.-flag, or Jones Act tankers (U.S.-
     constructed and -crewed). Exporting oil in foreign-flag 
     vessels would be the least expensive option, thereby 
     generating higher returns for producers and the State of 
     Alaska. This would lead to the highest level of overall job 
     creation, but also would produce the highest level of job 
     losses in the maritime sector. Exporting ANS crude on Jones 
     Act vessels would lower corporate returns, oil production, 
     and revenues for Alaska, but job losses in the maritime 
     sector would be small. These differences offset each other, 
     thereby eliminating the sensitivity to the method of 
     exportation.
       (c) Direct, indirect, and induced employment losses related 
     to the maritime sector could be as high as 3,300 jobs if 
     foreign-flag tankers are employed for exports of ANS crude 
     oil.
       5. No significantly negative environmental implications 
     were found.
       (a) Lifting the ANS export ban would decrease the incentive 
     for opening the Arctic National Wildlife Refuge (ANWR), and 
     would not affect California production from Outer Continental 
     Shelf (OCS) areas.
       (b) No modifications to the Trans-Alaskan Pipeline System 
     (TAPS) would be required, although incremental production 
     arising from ANS crude exports would extend the economically 
     viable lifetime of the system a few years.
       (c) Exporting ANS crude probably would decrease crude oil 
     tanker movement in U.S. waters.
       (d) Greenhouse gas emissions from generating steam to 
     produce additional heavy oil would increase slightly, but 
     this increase would be insignificant.
       This report does not fully address the implications of 
     changing U.S. maritime law. For example, the report does not 
     examine whether limiting exports of ANS crude to Jones Act 
     vessels would be consistent with existing U.S. international 
     trade policies and commitments. Because this report does not 
     address these trade-related issues, it makes no attempt to 
     weigh the benefits of lifting the ban against any costs that 
     might result from changes in U.S. maritime law.
       The aspects of the study that lead to these findings and 
     the study methodology are summarized in the sections that 
     follow. The body of the report and its appendices provide 
     details.

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