[Congressional Record Volume 141, Number 80 (Monday, May 15, 1995)]
[Senate]
[Pages S6650-S6675]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       ALASKA POWER ADMINISTRATION ASSET SALE AND TERMINATION ACT

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
proceed to the consideration of S. 395, which the clerk will report.
  The legislative clerk read as follows:

       A bill (S. 395) to authorize and direct the Secretary of 
     Energy to sell the Alaska Power Marketing Administration, and 
     for other purposes.

  The Senate proceeded to consider the bill
   which had been reported from the Committee on Energy and Natural 
Resources, with amendments; as follows:

  (The parts of the bill intended to be stricken are shown in boldface 
brackets and the parts of the bill intended to be inserted are shown in 
italic.)
                                 S. 395
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
                                [TITLE I

     [SECTION 101. SHORT TITLE.

       [This title may be cited as the ``Alaska Power 
     Administration Sale Act''.

     [SEC. 102. SALE OF SNETTISHAM AND EKLUTNA HYDROELECTRIC 
                   PROJECTS.

       [(a) The Secretary of Energy is authorized and directed to 
     sell the Snettisham Hydroelectric Project (referred to in 
     this Act as ``Snettisham'') to the State of Alaska in 
     accordance with the terms of this Act and the February 10, 
     1989, Snettisham Purchase Agreement, as amended, between the 
     Alaska Power Administration of the Department of Energy and 
     the Alaska Power Authority.
       [(b) The Secretary of Energy is authorized and directed to 
     sell the Eklutna Hydroelectric Project (referred to in this 
     Act as ``Eklutna'') to the Municipality of Anchorage doing 
     business as Municipal Light and Power, the Chugach Electric 
     Association, Inc., and the Matanuska Electric Association, 
     Inc. (referred to in this Act as ``Eklutna Purchasers''), in 
     accordance with the terms of this Act and the August 2, 1989, 
     Eklutna Purchase Agreement, as amended, between the 
     Department of Energy and the Eklutna Purchasers.
       [(c) The heads of other Federal departments and agencies, 
     including the Secretary of the Interior, shall assist the 
     Secretary of Energy in implementing the sales authorized and 
     directed by this Act.
       [(d) The Secretary of Energy shall deposit sale proceeds in 
     the Treasury of the United States to the credit of 
     miscellaneous receipts.
       [(e) There are authorized to be appropriated such sums as 
     may be necessary to prepare or acquire Eklutna and Snettisham 
     assets for sale and conveyance. Such preparations and 
     acquisitions shall provide sufficient title to ensure the 
     beneficial use, enjoyment, and occupancy to the purchasers of 
     the asset to be sold.

     [SEC. 103. EXEMPTION.

       [(a)(1) After the sales authorized by this Act occur, 
     Eklutna and Snettisham, including future modifications, shall 
     continue to be exempt from the requirements of the Federal 
     Power Act (16 U.S.C. 791a et. seq.).
       [(2) The exemption provided by paragraph (1) does not 
     affect the Memorandum of Agreement entered into between the 
     State of Alaska, the Eklutna Purchasers, the Alaska Energy 
     Authority, and Federal fish and wildlife agencies regarding 
     the protection, mitigation of, damages to, and enhancement of 
     fish and wildlife, dated August 7, 1991, which remains in 
     full force and effect.
       [(3) Nothing in this Act or the Federal Power Act preempts 
     the State of Alaska from carrying out the responsibilities 
     and authorities of the Memorandum of Agreement.
       [(b)(1) The United States District Court for the District 
     of Alaska has jurisdiction to review decisions made under the 
     Memorandum of Agreement and to enforce the provisions of the 
     Memorandum of Agreement, including the remedy of specific 
     performance.
       [(2) An action seeking review of a Fish and Wildlife 
     Program (``Program'') of the Governor of Alaska under the 
     Memorandum of Agreement or challenging actions of any of the 
     parties to the Memorandum of Agreement prior to the adoption 
     of the Program shall be brought not later than ninety days 
     after the date of which the Program is adopted by the 
     Governor of Alaska, or be barred.
       [(3) An action seeking review of implementation of the 
     Program shall be brought not later than ninety days after the 
     challenged act implementing the program, or be barred.
       [(c) With respect to Eklutna lands described in Exhibit A 
     of the Eklutna Purchase Agreement:
       [(1) The Secretary of the Interior shall issue rights-of-
     way to the Alaska Power Administration for subsequent 
     reassignment to the Eklutna Purchasers--
       [(A) at no cost to the Eklutna Purchasers;
       [(B) to remain effective for a period equal to the life of 
     Eklutna as extended by improvements, repairs, renewals, or 
     replacements; and
       [(C) sufficient for the operation, maintenance, repair, and 
     replacement of, and access to, Eklutna facilities located on 
     military lands and lands managed by the Bureau of Land 
     Management, including land selected by the State of Alaska.
       [(2) If the Eklutna Purchasers subsequently sell or 
     transfer Eklutna to private ownership, the Bureau of Land 
     Management may assess reasonable and customary fees for 
     continued uses of the rights-of-way on lands managed by the 
     Bureau of Land Management and military lands in accordance 
     with current law.
       [(3) Fee title to lands at Anchorage Substation shall be 
     transferred to Eklutna Purchasers at no additional cost if 
     the Secretary [[Page S6651]] of the Interior determines that 
     pending claims to, and selection of, those lands are invalid 
     or relinquished.
       [(4) With respect only to approximately eight hundred and 
     fifty-three acres of Eklutna lands identified in paragraphs 
     1. a., b., and c. of exhibit A of the Eklutna Purchase 
     Agreement, the State of Alaska may select, and the Secretary 
     of the Interior shall convey, to the State, improved lands 
     under the selection entitlements in section 6(a) of the Act 
     of July 7, 1958 (Public Law 85-508), and the North Anchorage 
     Land Agreement of January 31, 1983. The conveyance is subject 
     to the rights-of-way provided to the Eklutna Purchasers under 
     paragraph (1).
       [(d) With respect to the approximately two thousand six 
     hundred and seventy-one acres of Snettisham lands identified 
     in paragraphs 1. a. and b. of Exhibit A of the Snettisham 
     Purchase Agreement, the State of Alaska may select, and the 
     Secretary of the Interior shall convey to the State, improved 
     lands under the selection entitlement in section 6(a) of the 
     Act of July 7, 1958 (Public Law 85-508).
       [(e) Not later than one year after both of the sales 
     authorized in section 2 have occurred, as measured by the 
     transaction dates stipulated in the purchase agreements, the 
     Secretary of Energy shall--
       [(1) complete the business of, and close out, the Alaska 
     Power Administration;
       [(2) prepare and submit to Congress a report documenting 
     the sales; and
       [(3) return unused balances of funds appropriated for the 
     Alaska Power Administration to the Treasury of the United 
     States.
       [(f) The Act of July 31, 1950 (64 Stat. 382) is repealed 
     effective on the date, as determined by the Secretary of 
     Energy, when all Eklutna assets have been conveyed to the 
     Eklutna Purchasers.
       [(g) Section 204 of the Flood Control Act of 1962 (Public 
     Law 87-874; 76 Stat. 1193) is repealed effective on the date, 
     as determined by the Secretary of Energy, when all Snettisham 
     assets have been conveyed to the State of Alaska.
       [(h) As of the later of the two dates determined in 
     subsection (f) and (g), section 302(a) of the Department of 
     Energy Organization Act (42 U.S.C. 7152 (a)) is amended--
       [(1) in paragraph (1)--
       [(A) by striking out subparagraph (C); and
       [(B) by redesignating subparagraphs (D), (E) and (F) as 
     subparagraphs (C), (D), and (E) respectively;
       [(2) in paragraph (2), by striking out ``the Bonneville 
     Power Administration, and the Alaska Power Administration'' 
     and inserting in lieu thereof ``and the Bonneville Power 
     Administration''.
       [(i) The Act of August 9, 1955 (69 Stat. 618), concerning 
     water resources investigation in Alaska, is repealed.
       [(j) The sales of Eklutna and Snettisham under this Act are 
     not considered a disposal of Federal surplus property under 
     the following provisions of section 203 of the Federal 
     Property and Administration Services Act of 1949 (40 U.S.C. 
     484) and section 13 of the Surplus Property Act of 1944 (50 
     U.S.C. app. 1622).]
                                TITLE I

     SECTION 101. SHORT TITLE.

       This title may be cited as the ``Alaska Power 
     Administration Asset Sale and Termination Act''.

     SEC. 102. SALE OF SNETTISHAM AND EKLUTNA HYDROELECTRIC 
                   PROJECTS.

       (a) The Secretary of Energy is authorized and directed to 
     sell the Snettisham Hydroelectric Project (referred to in 
     this Act as ``Snettisham'') to the State of Alaska in 
     accordance with the terms of this Act and the February 10, 
     1989, Snettisham Purchase Agreement, as amended, between the 
     Alaska Power Administration of the United States Department 
     of Energy and the Alaska Power Authority and the Authority 
     successors.
       (b) The Secretary of Energy is authorized and directed to 
     sell the Eklutna Hydroelectric Project (referred to in this 
     Act as ``Eklutna'') to the Municipality of Anchorage doing 
     business as Municipal Light and Power, the Chugach Electric 
     Association, Inc., and the Matanuska Electric Association, 
     Inc. (referred to in this Act as ``Eklutna Purchasers''), in 
     accordance with the terms of this Act and the August 2, 1989, 
     Eklutna Purchase Agreement, as amended, between the Alaska 
     Power Administration of the United States Department of 
     Energy and the Eklutna Purchasers.
       (c) The heads of other Federal departments and agencies, 
     including the Secretary of the Interior, shall assist the 
     Secretary of Energy in implementing the sales authorized and 
     directed by this Act.
       (d) Proceeds from the sales required by this title shall be 
     deposited in the Treasury of the United States to the credit 
     of miscellaneous receipts.
       (e) There are authorized to be appropriated such sums as 
     may be necessary to prepare, survey and acquire Eklutna and 
     Snettisham assets for sale and conveyance. Such preparations 
     and acquisitions shall provide sufficient title to ensure the 
     beneficial use, enjoyment, and occupancy by the purchaser.

     SEC. 103. EXEMPTION AND OTHER PROVISIONS.

       (a)(1) After the sales authorized by this Act occur, 
     Eklutna and Snettisham, including future modifications, shall 
     continue to be exempt from the requirements of the Federal 
     Power Act (16 U.S.C. 791a et seq.) as amended.
       (2) The exemption provided by paragraph (1) does not affect 
     the Memorandum of Agreement entered into among the State of 
     Alaska, the Eklutna Purchasers, the Alaska Energy Authority, 
     and Federal fish and wildlife agencies regarding the 
     protection, mitigation of, damages to, and enhancement of 
     fish and wildlife, dated August 7, 1991, which remains in 
     full force and effect.
       (3) Nothing in this title or the Federal Power Act preempts 
     the State of Alaska from carrying out the responsibilities 
     and authorities of the Memorandum of Agreement.
       (b)(1) The United States District Court for the District of 
     Alaska shall have jurisdiction to review decisions made under 
     the Memorandum of Agreement and to enforce the provisions of 
     the Memorandum of Agreement, including the remedy of specific 
     performance.
       (2) An action seeking review of a Fish and Wildlife Program 
     (``Program'') of the Governor of Alaska under the Memorandum 
     of Agreement or challenging actions of any of the parties to 
     the Memorandum of Agreement prior to the adoption of the 
     Program shall be brought not later than ninety days after the 
     date of which the Program is adopted by the Governor of 
     Alaska, or be barred.
       (3) An action seeking review of implementation of the 
     Program shall be brought not later than ninety days after the 
     challenged act implementing the Program, or be barred.
       (c) With respect to Eklutna lands described in Exhibit A of 
     the Eklutna Purchase Agreement:
       (1) The Secretary of the Interior shall issue rights-of-way 
     to the Alaska Power Administration for subsequent 
     reassignment to the Eklutna Purchasers--
       (A) at no cost to the Eklutna Purchasers;
       (B) to remain effective for a period equal to the life of 
     Eklutna as extended by improvements, repairs, renewals, or 
     replacements; and
       (C) sufficient for the operation of, maintenance of, repair 
     to, and replacement of, and access to, Eklutna facilities 
     located on military lands and lands managed by the Bureau of 
     Land
      Management, including lands selected by the State of Alaska.
       (2) If the Eklutna Purchasers subsequently sell or transfer 
     Eklutna to private ownership, the Bureau of Land Management 
     may assess reasonable and customary fees for continued use of 
     the rights-of-way on lands managed by the Bureau of Land 
     Management and military lands in accordance with existing 
     law.
       (3) Fee title to lands at Anchorage Substation shall be 
     transferred to Eklutna Purchasers at no additional cost if 
     the Secretary of the Interior determines that pending claims 
     to, and selections of, those lands are invalid or 
     relinquished.
       (4) With respect to the Eklutna lands identified in 
     paragraph 1 of Exhibit A of the Eklutna Purchase Agreement, 
     the State of Alaska may select, and the Secretary of the 
     Interior shall convey to the State, improved lands under the 
     selection entitlements in section 6 of the Act of July 7, 
     1958 (commonly referred to as the Alaska Statehood Act, 
     Public Law 85-508, 72 Stat. 339, as amended), and the North 
     Anchorage Land Agreement dated January 31, 1983. This 
     conveyance shall be subject to the rights-of-way provided to 
     the Eklutna Purchasers under paragraph (1).
       (d) With respect to the Snettisham lands identified in 
     paragraph 1 of Exhibit A of the Snettisham Purchase Agreement 
     and Public Land Order No. 5108, the State of Alaska may 
     select, and the Secretary of the Interior shall convey to the 
     State of Alaska, improved lands under the selection 
     entitlements in section 6 of the Act of July 7, 1958 
     (commonly referred to as the Alaska Statehood Act, Public Law 
     85-508, 72 Stat. 339, as amended).
       (e) Not later than one year after both of the sales 
     authorized in section 102 have occurred, as measured by the 
     Transaction Dates stipulated in the Purchase Agreements, the 
     Secretary of Energy shall--
       (1) complete the business of, and close out, the Alaska 
     Power Administration;
       (2) submit to Congress a report documenting the sales; and
       (3) return unobligated balances of funds appropriated for 
     the Alaska Power Administration to the Treasury of the United 
     States.
       (f) The Act of July 31, 1950 (64 Stat. 382) is repealed 
     effective on the date, as determined by the Secretary of 
     Energy, that all Eklutna assets have been conveyed to the 
     Eklutna Purchasers.
       (g) Section 204 of the Flood Control Act of 1962 (76 Stat. 
     1193) is repealed effective on the date, as determined by the 
     Secretary of Energy, that all Snettisham assets have been 
     conveyed to the State of Alaska.
       (h) As of the later of the two dates determined in 
     subsection (f) and (g), section 302(a) of the Department of 
     Energy Organization Act (42 U.S.C. 7152 (a)) is amended--
       (1) in paragraph (1)--
       (A) by striking subparagraph (C); and
       (B) by redesignating subparagraphs (D), (E), and (F) as 
     subparagraphs (C), (D), and (E) respectively; and
       (2) in paragraph (2) by striking out ``and the Alaska Power 
     Administration'' and by inserting ``and'' after 
     ``Southwestern Power Administration,''.
       (i) The Act of August 9, 1955, concerning water resources 
     investigation in Alaska (69 Stat. 618), is repealed.
       (j) The sales of Eklutna and Snettisham under this title 
     are not considered disposal of Federal surplus property under 
     the Federal Property and Administrative Services Act of 1949 
     (40 U.S.C. 484) or the Act of October 3, 1994, popularly 
     referred to as the ``Surplus Property Act of 1944'' (50 
     U.S.C. App. 1622).
                                TITLE II

     SEC. 201. SHORT TITLE

       This title may be cited as ``Trans-Alaska Pipeline 
     Amendment Act of 1995''.

     SEC. 202. TAPS ACT AMENDMENTS.

       Section 203 of the Act entitled the ``Trans-Alaska Pipeline 
     Authorization Act,'' as amended (43 U.S.C. 1652), is amended 
     by inserting the following new subsection 
     (f): [[Page S6652]] 
       ``(f) Exports of Alaskan North Slope Oil.--
       ``(1) Subject to paragraphs (2) and (3), notwithstanding 
     any other provision of law (including any regulation), any 
     oil transported by pipeline over a right-of-way granted 
     pursuant to this section may be exported.
       ``(2) Except in the case of oil exported to a country 
     pursuant to a bilateral international oil supply 
     agreement entered into by the United States with the 
     country before June 25, 1979, or to a country pursuant to 
     the International Emergency Oil Sharing Plan of the 
     International Energy Agency, the oil shall be transported 
     by a vessel documented under the laws of the United States 
     and owned by a citizen of the United States (as determined 
     in accordance with section 2 of the Shipping Act, 1916 (46 
     U.S.C. App. 802)).
       ``(3) Nothing in this subsection shall restrict the 
     authority of the President under the Constitution, the 
     International Emergency Economic Powers Act (50 U.S.C. 1701 
     et seq.), or the National Emergencies Act (50 U.S.C. 1601 et 
     seq.) to prohibit exportation of the oil.''.

     SEC. 203. SECURITY OF SUPPLY.

       Section 410 of the Trans-Alaska Pipeline Authorization Act 
     (87 Stat. 594) is amended to read as follows: ``The Congress 
     reaffirms that the crude oil on the North Slope of Alaska is 
     an important part of the Nation's oil resources, and that the 
     benefits of such crude oil should be equitably shared, 
     directly or indirectly, by all regions of the country. The 
     President shall use any authority he may have to ensure an 
     equitable allocation of available North Slope and other crude 
     oil resources and petroleum products among all regions and 
     all of the several States.''.

     SEC. 204. ANNUAL REPORT.

       Section 103(f) of the Energy Policy and Conservation Act 
     (42 U.S.C. 6212(f)) is amended by adding at the end thereof 
     the following: ``In the first quarter report for each new 
     calendar year, the President shall indicate whether 
     independent refiners in Petroleum Administration District 5 
     have been unable to secure adequate supplies of crude oil as 
     a result of exports of Alaskan North Slope crude oil in the 
     prior calendar year and shall make such recommendations to 
     the Congress as may be appropriate.''.

     SEC. 205. GAO REPORT.

       The Comptroller General of the United States shall conduct 
     a review of energy production in California and Alaska and 
     the effects of Alaskan North Slope crude oil exports, if any, 
     on consumers, independent refiners, and shipbuilding and ship 
     repair yards on the West Coast. The Comptroller General shall 
     commence this review four years after the date of enactment 
     of this Act and, within one year after commencing the review, 
     shall provide a report to the Committee on Energy and Natural 
     Resources in the Senate and the Committee on Resources in the 
     House of Representatives. The report shall contain a 
     statement of the principal findings of the review and such 
     recommendations for consideration by the Congress as may be 
     appropriate.

     SEC. 206. EFFECTIVE DATE.

       This [Act] title and the amendments made by it shall take 
     effect on the date of enactment.

  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. MURKOWSKI. Mr. President, the Senator from Washington and I have 
been in discussion. It is my understanding that the Senator from 
Washington has agreed to taking up the debate on the bill at this time.
  I ask the Chair for unanimous consent that the committee amendment be 
adopted and considered to be the original text for further amendment.
  The PRESIDING OFFICER. Is there objection?
  Mrs. MURRAY. I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. MURKOWSKI. Mr. President, in view of the objection, it would be 
my intent to announce to the body that I would move to table. I want to 
accommodate my friend from Washington, but I will suggest that at 2:30 
I will move to table the committee amendment at that hour.
  Mr. President, let me begin with my opening statement relative to S. 
395.
  Mr. President, on February 13, the senior Senator, Senator Stevens, 
and I introduced Senate bill 395. Title I of this bill provides for the 
sale of the Alaska Power Administration--known as the APA--the assets 
of that and the termination of the Alaska Power Administration once the 
sale occurs.
  Further, title II would allow exports of Alaska's North Slope oil, 
referred to as ANS crude oil, when carried only on U.S.-flag vessels. 
It is my understanding that Senator Feinstein and Senator Kyl later 
cosponsored S. 395.
  On March 1 the committee heard testimony from the administration, 
from the Lieutenant Governor of Alaska, the State of California, the 
California independent producers, maritime labor, and other proponents 
of Senate bill 395. The administration testified in support of lifting 
the Alaska North Slope crude oil export ban, and they indicated that 
the bill should be amended to provide for an appropriate environmental 
review to allow the Secretary of Commerce to prevent anticompetitive 
behavior by exporters and to establish a licensing system. And then on 
March 15, after agreeing to work with the administration on these 
concerns prior to bringing the bill to the floor, the committee adopted 
Senate bill 395 by an overwhelming vote. The vote on that was 14 to 4. 
So it was truly bipartisan support relative to the merits of S. 395.
  Further, Mr. President, Senator Johnston and I were pleased to offer 
a committee substitute. We propose that now as in the original bill. 
Title I would provide for the sale of the assets of the Alaska Power 
Administration and title II would authorize exports of Alaska North 
Slope crude carried on American flag vessels with changes to satisfy 
some Members and administration concerns.
  Title I of S. 395 provides for the sale of the Alaska Power 
Administration's assets and the termination of the Alaska Power 
Administration once the sale is completed.
  Further, I am pleased to state that the Department of Energy has 
testified in support of the Alaska Power Administration's asset sale 
and agency termination.
  In addition, on April 7, 1995, the administration submitted 
legislation to Congress substantially similar to title I of S. 395. The 
transmittal letter says:

       This legislation, which is proposed in the President's FY 
     1996 budget, is part of the administration's ongoing effort 
     to reinvent the Federal Government.

  The Alaska Power Administration is quite unique among the Federal 
power marketing administrations. First, unlike the other Federal power 
marketing administrations, the Alaska Power Administration owns its 
power-generating facilities, which consist of two hydroelectric 
projects.
  Second, these single-purpose hydroelectric projects were not built as 
a result of the water resource management plan as is the case or was 
the case with most other Federal hydroelectric dams. Instead, they were 
built to promote economic development and the establishment of 
essential industries.
  Third, the Alaska Power Administration operates entirely in one 
State, the State of Alaska.
  Fourth, the Alaska Power Administration was never intended to remain 
indefinitely under Government control. That is specifically recognized 
in the Eklutna national project authorizing legislation. The Alaska 
Power Administration owns two hydroelectric projects, one near Juneau 
at Snettisham and the other near Anchorage at Eklutna. Snettisham is a 
78-megawatt project located 45 miles from Juneau to the south. It has 
been Juneau's main power supply since 1975, accounting for up to 80 
percent of its electric power. Eklutna is a 30-megawatt project located 
34 miles northeast of Anchorage. It has served the Anchorage and 
Matanuska valleys since about 1955 and accounts for 5 percent of its 
electric power supply.
  The Alaska Power Administration's assets will be sold pursuant to the 
1989 purchase agreement between the Department of Energy and the 
purchasers. Snettisham will be sold to the State of Alaska. Eklutna 
will be sold jointly to the municipality of Anchorage, Chugach Electric 
Association, and the Matanuska Electric Association.
  For both, the sale price is determined under an agreed upon formula. 
It is the net present value of the remaining debt service payments that 
the Treasury would receive if the Federal Government had retained 
ownership of the two projects. The proceeds from the sale are currently 
estimated to be about $85 million. However, the actual sales price will 
vary with the interest rate at the time of purchase.
  S. 395, in a separate formula agreement, provided for the full 
protection of the fish and wildlife in the area. The purchasers, the 
State of Alaska, the U.S. Department of Commerce, U.S. Marine 
Fisheries, and the U.S. Department of the Interior, have jointly 
entered into a formal binding agreement providing for postsale 
protection, mitigation and enhancement of fish and wildlife resources 
affected by Eklutna and Snettisham. The agreement makes that legally 
enforceable. [[Page S6653]] 
  As a result of the formal agreement, the Department of Energy, the 
Department of the Interior, and the Department of Commerce will all 
argue that the two hydroelectric projects warrant exemption from FERC 
licensing under the Federal Power Act. The August 7, 1991 purchase 
agreement states in part that

       The National Marine Fisheries Service, the U.S. Fish and 
     Wildlife Service, and the State agree that the following 
     mechanism to develop and implement measures to protect and 
     mitigate damages, to enhance fish and wildlife, including 
     related spawning grounds and habitat, obviate the Eklutna 
     purchaser and the EAE to obtain licenses.

  This agreed upon exemption from the Federal Power Act's requirements 
to obtain a FERC license will save the purchasers and their customers 
as much as $1 million in licensing costs for each project plus 
thousands of dollars in annual fees.
  The Alaska Power Administration has 34 people located in my State of 
Alaska. The purchasers of the two projects have pledged to hire as many 
of these as possible. For those who do not receive offers of 
employment, the Department of Energy has pledged that it will offer 
employment to any remaining Alaska Power Administration employees 
although the DOE jobs are expected to be in other States.
  Let me turn to title II, Mr. President, the Trans-Alaska Pipeline 
Amendment Act of 1995.
  Title II of S. 395 would at long last allow exports of Alaska's North 
Slope crude oil when carried on U.S.-flag vessels. This legislation 
will finally allow my State to market its major product in the global 
marketplace and let the marketplace determine its ultimate usage. The 
export restrictions were first enacted shortly after the commencement 
of the 1973 Arab-Israel war and the first Arab oil boycott. At that 
time, many people believed that the enactment of the export 
restrictions would enhance our Nation's energy security. Indeed, 
following the major oil shock of 1979, Congress effectively imposed a 
ban on exports.
  Well, Mr. President, much has changed since then. In part, due to 
conservation efforts and shift to other fuel sources, total U.S. 
petroleum demand in 1993 actually was lower than in 1978. However, in 
the last 2 years, our consumption of oil has significantly increased 
and our productive capacity has declined. Our dependence on foreign oil 
sources has now gone up. We now produce almost 3 billion barrels a day 
less than we did in 1973. Employment in the oil and gas production 
industry has fallen by more than 400,000 jobs since 1982. Production on 
the North Slope has now entered a period of sustained decline. 
Throughput in the Trans-Alaska pipeline has dropped from 2.2 million 
barrels a day in 1989 to about 1.5 million barrels a day currently. In 
California, small independent producers have been forced to abandon 
wells or defer further investments to increase production. By 
precluding the market from operating normally, the export ban has had 
the unintended effect of discouraging, discouraging, Mr. President, oil 
production in California and Alaska. Lifting the ban on Alaska North 
Slope crude oil exports is the first step, the first step toward 
stopping the decline of this Nation's oil production. ANS oil exports 
will increase our oil production capacity by opening new reserves to 
production. This is oil production that our country can count on if it 
needs it. With an efficient market brought about by exports, we would 
not have this increased production and resultant increase in energy 
security. With this market distortion eliminated, producers will make 
substantial investments, will make investments in California, they will 
make investments on the marginal field on the North Slope that will 
lead to additional production. Every barrel of additional oil produced 
in California and on the North Slope is one less that would have to be 
imported from the Mideast or elsewhere in the world.
  In an effort to quantify the likely production response and to 
evaluate benefits and costs of Alaska oil exports, the Department of 
Energy has concluded a very comprehensive study last year on the 
matter. In its June 1994 report, the department concluded ``Alaska oil 
exports would boost production in Alaska as well as California by 
approximately 100,000 to 110,000 barrels per day by the end of the 
century.'' The study also concluded ANS exports could create up to 
25,000 jobs. These are new jobs that will be created in California and 
to a lesser degree Alaska. Now, Mr. President, some Senators have 
expressed concern that lifting the ANS oil export ban will jeopardize 
the supply of ANS crude on the west coast. This is just simply not the 
case. Washington and California are and will remain the natural markets 
for ANS crude. Washington and California ports are the closest to 
Alaska and the ANS crude will continue to be supplied to those 
refineries. The economics simply dictate that as the closest point from 
Alaska and the closest point to significant distribution capability 
because of the populations in those areas near those west coast 
refineries.
  Furthermore, the only major refinery that opposes lifting the ban is 
one that has a 5-year contract with British Petroleum to keep their 
refinery supplied. It is my understanding there is still approximately 
4 years left on that contract, so there is no immediate suggestion that 
this or any other refinery is about to have its operation jeopardized 
by this action.
  Further, the lifting of the oil export ban would relieve pressure 
that forces some of the ANS crude oil down to Panama, where it is 
unloaded, transported across Panama via a pipeline, and then reloaded 
onto vessels to take it to the gulf coast. It simply makes no economic 
sense to handle the oil that many times and transport it that long 
distance. That oil is the oil we are talking about, the available oil 
from 75,000 to 200,000 barrels a day that would be exported. The market 
in our opinion should determine the price and destination of the ANS 
crude oil.
  Mr. President, there has been a long concern in the domestic maritime 
community that lifting this ban would force the scrapping of the 
independent tanker fleet--these are U.S.-flag vessels that make up the 
significant portion of the U.S. maritime fleet under the American 
flag--and this lifting of the ban would destroy employment 
opportunities for merchant mariners who remain a vital contributor to 
our national security.
  In recognition of this concern, the proposed legislation before this 
body would require, and I emphasize require, the use of U.S.-flag 
vessels to carry the available oil that would be exported. This is not 
the first time the law was changed. Some would suggest that this is an 
issue of precedent, but it is not. The law was changed to allow the 
export of ANS crude oil in 1988 when Congress passed legislation to 
implement the United States-Canadian Free-Trade Agreement.
  It agreed at that time to allow the 50,000 barrels a day of ANS crude 
to be exported to and subject to the oil being carried on Jones Act, 
that is U.S.-flag, vessels.
  Mr. President, we have been trying to lift the oil export ban for 
some time. In the past, maritime unions opposed our efforts because 
they believed it would increase job losses in that industry. Last year, 
the maritime unions came to the realization that their unions were 
facing virtual extinction if Alaska oil production continued to 
decline; in other words, there would be no oil to haul and, as a 
consequence, no ships to man. So they initiated support for lifting the 
ban to help both Alaska and California production if--and I want to 
emphasize this--if it were transported on U.S.-flag vessels with U.S. 
crews.
  Mr. President, this current ban no longer makes economic sense. For 
far too long, it has hurt the citizens of my State. It has severely 
damaged the California oil and gas industry and has precluded the 
market from functioning normally. In other words, you have a free 
market out there. It should function as a free market. If this ban is 
left in place any longer, there is no question that it will further 
discourage energy production. It will destroy jobs in California, or 
the prospects for jobs, as well as in my State of Alaska, and it will 
ultimately be the end of our seafaring mariners, the independent U.S. 
tanker fleet and, as a consequence, the shipbuilding sector of our 
Nation because, under the current law, these vessels are required to be 
built in U.S. shipyards. And, clearly, if there is no oil to haul, you 
are not going to need any ships, regardless of the mandate that they be 
U.S. vessels with U.S. crews. [[Page S6654]] 
  I am sure we are going to hear from some of our colleagues today 
expressing concerns that prices will go up, gas prices, gasoline 
prices, on the west coast, if exports of ANS oil are authorized.
  Well, Mr. President, there is no indication that this is the case. 
The Department of Energy carefully studied this issue and concluded 
that consumers would not see a discernible increase in the price at the 
gas pump. The DOE showed that west coast refineries enjoy the widest 
refiner gross profit margins in the country. Some would ask: Why? Well, 
we will get into that later on in the debate, I am sure.
  In other words, the west coast refineries have been able to buy crude 
oil for less per barrel than anywhere else in the country because of 
the proximity of the refiners to the origin of the oil in Alaska, yet 
they are selling the gasoline or other refined products for more than 
anywhere else in the country.
  In 1993, the refiners' gross margin on the west coast was more than 
$4 higher than the U.S. average, according to the Department of Energy. 
Wholesale gasoline prices in California are consistently 3 or 4 cents 
higher than in New York, despite the fact that California refiners are 
purchasing cheaper crude than the foreign crude oil shipped into the 
east coast. One wonders why.
  Another concern we will probably hear today is ANS oil exports will 
create environmental hazards, including increased chances of oilspills. 
However, the DOE study has taken that into consideration and found that 
exports of Alaskan oil will actually decrease tanker traffic in U.S. 
waters. And this is the simple reality. Furthermore, any tankers 
exporting ANS oil exported from Alaska will proceed some 200 miles off 
our coast and stay 200 miles or more off our coast while proceeding 
overseas. In other words, this oil, a small amount, in excess, will 
move from the Port of Valdez and go straight across the ocean, we 
assume, to refiners in perhaps Japan, Korea, and Taiwan, as opposed to 
this oil going down to the west coast of Alaska, the west coast of 
British Columbia, the west coast of the State of Washington, the State 
of California, and Oregon, as well.
  So to suggest that there is an increase in environmental hazards of 
oil spills is simply not true because we are simply not moving this oil 
down the west coast. It is much safer, as a matter of fact, to 
transport it across the ocean than down the west coast of the United 
States.
  It is interesting to point out, Mr. President, that this oil, this 
excess oil, would ordinarily have gone all the way down the west coast 
beyond California and into the pipeline at the Pacific isthmus in 
Panama, where it would have been unloaded, gone across Panama in the 
pipeline, and then again reloaded on smaller United States-flag vessels 
to be delivered to the refineries in the gulf coast. The economics of 
this double handling is the reason this is no longer a viable 
alternative and why we have this excess oil on the west coast.
  Now there are other concerns that exporting ANS crude will decrease 
work for the U.S. shipyards. However, in my opinion, it will have the 
reverse effect, simply because more tankers will be needed to trade, it 
will be necessary to bring a few more ships out. The lay-up fleet will 
provide significantly more jobs in the maritime market. The reason for 
that is you are moving the oil further and when you move it further, it 
takes more time and, as a consequence, you need more ships.
  Now, the question that somehow this will result in tankers being 
repaired overseas if the ban is lifted, I think bears some examination. 
Because if Alaska crude oil production continues to decline, in part 
because of the depressed prices caused by the export ban, there will be 
more tankers put in lay-up and unavailable for repair. And I would 
further advise the Chair that, as far as the threat of tankers being 
lifted overseas, there is a 50-percent surcharge that must be paid to 
the U.S. Government for tankers that are lifted in foreign yards.
  So, Mr. President, the reality is that it simply makes no sense to 
continue this ban at this time. And the lifting of the ban will, in my 
opinion, increase jobs, certainly increase domestic oil production 
without any cost to the country. It will be of great benefit to the 
country.
  Mr. President, I would like to refer a little bit to a little of the 
history relative to this matter and try and put into perspective the 
situation in the State of Alaska as it exists today.
  We are all aware that Alaska was a pretty good bargain when we 
purchased it from Russia and we paid a favorable price for it.
  But, you know, we are a little unique in having come into the Nation 
of States in 1959. We have a population of some 560,000 people spread 
out over a vast area roughly one-fifth the size of the United States. 
Until a few years ago, we had four time zones in our State; now we have 
three, simply to make it simpler living in Alaska. We have some 33,000 
miles of coastline.
  We have a unique ownership of our land. We have 365 million acres. 
But if you look at the ownership of that land, you find that the 
Federal Government still owns over 65 percent of that land. Our State 
of Alaska, the State government itself, has about 28 percent. The 
native people, the aboriginal people of our State, have some 12 
percent, and the private ownership in our State is somewhere in the 
area of 3 to 4 percent.
  Our State has been producing nearly 25 percent of the Nation's total 
crude oil for the last 16 or 17 years. That production was as high as 2 
million barrels a day. Now it is about 1.6 million barrels a day.
  Coming into the Union in 1959 with the State of Hawaii, while we had 
camaraderie and a friendship, we in many ways did not have much in 
common. We were a large land mass federally owned; Hawaii, a much 
smaller island land area.
  We were separated by the Nation of Canada from the continental United 
States and, as a consequence, as we began to develop, a rather curious 
set of circumstances came about. We found ourselves subject to pretty 
much the whims of the Federal Government with regard to development, 
because the wealth and resources of our State, unlike many other 
States, were not controlled by private individuals or private groups in 
residence. We found ourselves subject to outside ownership and outside 
control.
  So, as we look at Alaska today, we really have to look at what 
constitutes the ownership of our resources, what contributes to our 
economy, where they are domiciled, where our jobs come from in 
relationship to the development of those resources.
  As we look at who owns Alaska today, setting aside the 65-percent 
Federal Government ownership, and identify our industries, we first 
look at our oil industry and find that our oil industry, which is such 
a significant factor, is not an Alaska-based industry. It is based in 
Texas, it is based in California, it is based in England, as a 
consequence of large international companies and not independents 
domiciled in our State.
  Our second-largest industry, fishing, for all practical purposes, is 
controlled by interests out of the State of Washington, primarily in 
Seattle, and Japan, where a large percentage of the ownership is 
concentrated. Very little of our fishing industry, as far as the 
processing is concerned, is domiciled with ownership in our State. We 
have a significant number of fishing vessels in our State, but many of 
the fishing vessels that fish in our State are domiciled in other 
States.
  Timber, which is our third-largest industry, is primarily controlled 
by the Japanese and interests in the State of Oregon and, to a lesser 
degree, in the State of Washington.
  Mining, which is a tremendous resource potential for Alaska, is 
primarily situated in British Columbia, in England, and in Utah.
  Our airlines, Mr. President, our largest carrier, Alaska Airlines, is 
domiciled in the Washington State area in Seattle. We are serviced by 
Delta, Northwest, United. As a consequence, the point I am making is 
virtually everything that comes in or goes out of Alaska goes through 
the State of Washington. Even our shipping, and virtually everything we 
use in our State, comes through the State of Washington. Sea-Land is 
associated in the Seattle area, yet it is a New Jersey corporation. 
Tote, which is a carrier that brings two to three ships a week in 
Alaska, is also domiciled in the State of Washington. Previous to that, 
[[Page S6655]] the State was dependent on transportation by Alaska 
Steamship Co.
  Some of the more senior Members will undoubtedly recall the ongoing 
debate that occurred for many years between the late Senator Gruening 
and the Alaska Steamship Co. which he claimed had a vice grip on 
Alaska, its transportation system and, as a consequence, controlled, to 
some degree, the level of Alaska development.
  As we look at everything we consume in Alaska--virtually everything--
our foodstuffs, our beverages, our mattresses, our light bulbs, our 
toilet paper, everything comes up through the State of Washington.
  We find many of our oil rigs or activities on the North Slope 
relative to oil and gas production are fabricated in the State of 
Louisiana and brought up. We have our own transportation system, a 
ferry system, which sails out of Bellingham, WA, to Alaska. It has been 
estimated that as much as 20 percent of all the economic activity in 
the State of Washington is directly associated with activities in 
Alaska. So one can say anything that happens in Alaska stimulating the 
economy also has a multiplying factor on the State of Washington. Even 
our oil tankers that haul oil go to shipyards, not in Alaska, but 
shipyards in Portland and San Diego, and those ships are not crewed 
with Alaskan crews, but rely on crews supplied from Washington, Oregon, 
and California.
  Our cruise ships that come up to our State during the summer months 
sail out of Vancouver, BC, where they are supplied and crewed. They are 
owned by Florida and British interests.
  So as we look at Alaska coming into the Union after all the rest of 
the States have established their land patterns, and so forth, we found 
that we had a rather curious set of circumstances. We have the reality 
that we are dependent, in a sense, for supply by our States to the 
south. The benefits are primarily concentrated in the State of 
Washington.
  I think perhaps a little further history is appropriate as we look 
back on how some of these policies developed, and it is fair to say 
that back in the twenties there was a fear from the State of 
Washington, the Seattle area, that perhaps Vancouver, BC, or Prince 
Rupert, BC, might begin to supply the frontier country of Alaska. To 
ensure this profitable business activity generated through the State of 
Washington was not lost, there was an action by the Washington State 
delegation. That delegation was basically responsible for getting the 
Jones Act passed.
  This was a rather interesting piece of legislation that said that 
goods and services that moved between two U.S. ports had to go in U.S. 
vessels with U.S. crews, built in U.S. shipyards. This action basically 
eliminated the British Columbia supplying Alaska goods originating in 
the United States and carrying them to ports in Alaska.
  The question is, Who was Jones? You may have guessed it. He was a 
U.S. Senator from the State of Washington. He served in this body 23 
years, from 1909 to 1932. Some would say, why, he was doing his job, as 
some of the opponents today of this legislation can certainly justify, 
but we have to question, if you will, in Alaska that we were 
theoretically at that time denied an opportunity to let the market 
dictate the transportation modes to our State.
  I wonder how the Senator from Alaska would be treated today if I were 
up here suggesting Washington and Oregon not be allowed to export their 
timber products to the markets of the world or that Boeing would not be 
allowed to sell their airplanes outside the United States or perhaps 
people in the State of Washington have to eat all their own delicious 
apples. This is a part of the issue as some of us in Alaska see it.
  Our Washington State opponents say oil export of Alaska's surplus oil 
that has been on the west coast, formerly went through the Panama 
Canal, would harm Washington State because the excess oil on the west 
coast would not make it favorable for one of their major independent 
refiners in that area to be able to buy this oil at perhaps a favorable 
price that is pending.
  They say the refinery jobs are threatened. I really think this 
argument has no foundation in reality. As I stated earlier, this 
refinery in question has 5-year contracts and 4 years remaining with 
British Petroleum to supply the amount of oil that it needs to that 
refinery. Perhaps we will get into refinery returns a little later in 
the debate. But it is fair to say the consumers of Washington State are 
not benefiting by the abnormally high rate of return on investment in 
comparison to the refining industry as a whole in this area.
  In other words, the profits are not necessarily passed on to the 
consumer. That is really a case for the Washington delegation to 
address. But it certainly appears that way from the information 
supplied us by the Department of Energy, which I will make a part of 
the Record at a later date.
  Further production of Alaska oil will always find its natural markets 
in the nearest area where there is a refining concentration simply 
because of the costs of transportation; and that equates to the 
existing refineries on the west coast, which are the closest source of 
Alaskan oil.
  Oregon's opposition is a little different. Washington State does not 
have, as I understand it, shipyards with the capacity of lifting many 
of the larger U.S.-flag tankers. Several years ago, the Portland area, 
on the basis of the assumption that there would be perhaps more oil 
produced in Alaska, floated a public bond issue and bought a large dry 
dock from the Columbia River and solicited business of hauling out and 
dry-docking Alaskan tankers that were in the Alaskan trade as well as 
other commercial shipping.
  As we look at the merits of the volume of oil, a quarter of all U.S. 
production, except a small amount, goes to the Virgin Islands--I might 
add, in foreign vessels--that is exempt, and it goes in in these U.S. 
tankers moved down from Alaska to ports in Washington, California, and 
Panama. The Oregon delegation fears that some of this excess oil that 
used to move through the Panama Canal, now with the proposed 
legislation that would allow it to move into foreign markets, the free 
market, even though it would still have to move in U.S. ships with U.S. 
crews, these ships might be dry-docked in foreign shipyards, even 
though there is a more, I think, protective piece of legislation in 
place that addresses this. As I have said before, this requires U.S. 
owners to pay a 50-percent penalty to the U.S. Government on top of the 
foreign shipyard bill.
  So what we have here is understandable sensitivity. But not much is 
said by our Oregon neighbors as to where their shipyard was built. It 
was built in Japan. That is obviously a question that they saw fit to 
purchase that yard there rather than build it in the United States. 
Unfortunately, that shipyard has had its ups and downs. It has been out 
of work from time to time. And in making some inquiries, we found that 
most of the tanker traffic that used to be repaired in Portland is now 
being repaired in San Diego because we can only assume that yard 
appears to be more competitive, even though, at our urging, the tanker 
industry has contracted for the repair of two tankers in the Portland 
yard recently, and we will continue to support that yard as much as 
possible.
  I hope that we can address the concerns of the Oregon delegation 
because we are quite sensitive to the fact that they floated a bond 
issue and those bonds are still being retired, and without an adequate 
volume of business, the ability to retire those bonds is questionable. 
So we want to assist in every way possible, and we are working with the 
Oregon delegation at this time to try to work out some accord.
  I do not want to mislead the President about the real issue. There is 
an effort to stop Alaska from exporting its excess oil, and I wanted 
the Record to reflect on the real story and the reasons why.
  Now, the issue of why excess oil on the west coast needs relief now 
deserves a brief, expanded explanation. When we were at an all-time 
high of our production--some 2 million barrels a day--we simply had to 
move this excess oil because the west coast refineries could not 
consume it; the markets were not big enough. So a pipeline was built, 
and it was very interesting. I went down for the opening of it. It was 
built by the Government of Panama in partnership with Northfield 
Industries, which is an east coast firm, and Chicago Bridge & Iron. It 
was built to move the excess oil, so the oil would go down from Valdez 
to the Pacific isthmus in U.S.-flag vessels, unloaded, and moved in the 
pipeline. I might add, [[Page S6656]] that pipeline was simply a cat 
trail in the jungle, and the pipe, for the most part, was on the 
surface. But it did the job.
  In any event, once the oil was unloaded, the Pacific isthmus went 
through the pipeline, reloaded on U.S. small ships and was taken into 
the Houston refineries in the Gulf of Mexico. Well, as one can easily 
ascertain, the economics of that double handling is no longer 
efficient. As a consequence, they can bring in oil in the gulf and 
Houston refineries from South and Central America, offshore Louisiana, 
and Mexico as well, so they are not interested in taking the volumes of 
the United States oil which is no longer competitive in that market. 
That is the reason we have this excess on the west coast today.
  Now, letting the Pacific rim market absorb the excess oil also 
deserves a brief explanation. First of all, we are not talking about 
very much oil. The excess is estimated to be somewhere between 75,000 
to 200,000 barrels per day. The rest of our 1.6 million acres is 
consumed on the west coast refineries and will continue to be. So if 
one looks at the economics of this excess oil, it is a pretty tough set 
of facts, because it will have to compete on some rather difficult 
terms. I ask the Chair to just compare the costs of marketplaces such 
as Korea, Japan, and Taiwan, to take the oil from Alaska, shipped in 
United States-crewed tankers that operate at obviously much higher 
costs, when those same countries can bring in oil much cheaper in 
foreign tankers than they can bring in oil from the Mideast.
  So there you have an analysis of the economics associated with the 
merits of getting some of this excess oil off the west coast. But the 
real concern is the stimulation of oil production in California and 
bringing on the small producers that have been down for some time. And 
once this excess is removed, you have the capability of this relatively 
large volume of small producers being able to bring their oil in 
because of the close proximity and reduced transportation costs 
associated with bringing that oil into the California refiners.
  So there you have the real issue before this debate. Alaskans, of 
course, are sensitive to the significance of sovereignty as it applies 
to what a State produces in the free market system, having the 
capability of making a determination of just where those resources will 
be utilized.
  Furthermore, Mr. President, I have some more detail that I would like 
to present to substantiate our concerns over this legislation. I think 
the best way to do it is to go into some detail relative to the 
background associated with the support for this legislation.
  Last year, for the first time, imports met more than half of our 
domestic consumption because the domestic production has drastically 
declined. By precluding the market from operating,
 the export ban has had an unintended effect of discouraging further 
energy production.

  With this market disorientation eliminated, producers would make 
substantial investments in California and the North Slope that would 
lead to additional production.
  Every barrel of additional oil produced in California and on the 
North Slope is one less than would have to be imported from the Middle 
East or elsewhere in the world. As I have said before, Mr. President, 
Washington and California are the natural markets for crude. Washington 
and California ports are closest to Alaska, and the ANS crude will 
continue to be supplied to their refiners.
  It simply no longer makes economic sense to handle the oil as many 
times and transport it the long distance that has previously been the 
disposition of that oil on the west coast of the United States. That is 
the oil that we are talking about. That is the excess.
  Let me refer to a report from the Department of Energy that addresses 
this issue. Lifting the Alaska crude oil export ban would, one, add as 
much as $180 million in tax revenue to the U.S. Treasury by the year 
2000. It would allow California to earn as much as $230 million during 
the same period. It would increase U.S. employment, U.S. jobs, by some 
11,000 to 16,000 jobs by 1995 and 25,000 new jobs by the year 2000. It 
would preserve as many as 3,300 maritime jobs. It would increase 
American oil production by as much as 110,000 barrels a day by the year 
2000. It would add 200 to 400 million barrels to Alaska's oil reserve.
  Now, Mr. President, these are not figures that have been put together 
by the Senator from Alaska. These are figures released by the 
Department of Energy.
  Mr. President, as we address further consideration of the issues 
covering Alaska's oil export, I think we have to again rely on the 
credibility of the information. I was very pleased that the Department 
of Energy did such an exhaustive study relative to this issue, before 
the administration took a position.
  I am pleased to say that the President of the United States supports 
this legislation because this legislation is good for America. It is 
good for America because it decreases our dependence on foreign 
imports. By so doing, we basically keep our dollars home and keep our 
jobs home.
  As a consequence, Mr. President, we find that this report by the 
Department of Energy, in substantiating our efforts, keeps America in a 
position of ensuring that we can, through the incentives offered by 
this legislation, keep our production again flowing from marginal wells 
that previously have not been capable of being competitive in the 
marketplace.
  I am told that several fields in Alaska adjacent to Prudhoe Bay that 
are currently marginal at this time would be brought into production. 
When one begins to add up all the benefits of this, why, clearly, it 
benefits the maritime industry as well.
  As a consequence, Mr. President, I note that the maritime unions, 
without exception, support this legislation. As a consequence, they are 
urging Members to evaluate the merits of the legislation before this 
body.
  I have already addressed at some length the issue of increased oil 
production. I want to talk very briefly now as to the position of the 
administration in supporting the lifting of the North Slope crude oil 
export ban. Inasmuch as their indication that the bill, as proposed, 
should be amended to provide for an appropriate environmental review, 
now the question of an environmental review would be to allow the 
Secretary of Commerce to address anticompetitive behavior by exporters, 
and to establish a licensing system of some kind.
  We have addressed those concerns in the committee amendment. Before 
making his national interest determination, the President would be 
required, under this legislation, to complete an appropriate 
environmental review.
  In making his national interest determination, the President could 
impose conditions other than a volume limitation. The Secretary of 
Commerce then would be required to issue any rules necessary to 
implement the President's affirmative national interest determination 
within some 30 days.
  If the Secretary later found that anticompetitive activity by an 
exporter had caused sustained material oil shortages or sustained 
prices significantly above the world level, and that the shortages or 
high prices caused sustained material job losses, he could recommend 
appropriate action by the President against the exporter, including 
modifications of the authority to export.
  Under Senate bill 395, the President would retain his authority to 
later block exports in an emergency. In addition, Israel and other 
countries, pursuant to an international oil sharing plan, would be 
exempted from the United States flag requirement. The compromise also 
would retain a requirement of an annual report by the President on the 
ability of the refiners to acquire crude oil, and a GAO report 
assessing the impact of ANS exports on consumers, independent refiners, 
shipbuilders, and ship repair yards.
  Now, Mr. President, let me be specific on some of the principal 
benefits. The principal benefit, of course, is increased oil 
production. The Department of Energy, as I have stated, projects Alaska 
and California production will increase by 100,000 to 110,000 barrels 
per day by the end of the decade. Thus, by the end of this decade, 
exports would stimulate an additional 36.5 million to 40 million 
barrels per year.
  And it would create energy sector jobs. Specifically, some 25,000 
jobs on [[Page S6657]] the west coast, as well as an undetermined 
number in Alaska. Revenues for the Federal Government, according to the 
Congressional Budget Office scoring, raising $55 million to $59 million 
over 5 years. It would raise State revenues.
  Using different assumptions, the Department of Energy concluded that 
the ANS exports would generate up to $1.8 billion in revenues for 
California and Alaska by the end of the decade.
  It would decrease net import dependence. It would reduce, as I 
stated, tanker movements by stimulating onshore production in 
California. Enactment of the bill would actually reduce tanker 
movements off the California coast, and it would preserve repair 
opportunities by helping preserve the independent fleet that otherwise 
would be laid up for scrap.
  The bill would provide shipyard repair work for shipyards in 
Portland, California, and others, that would be lost with the death of 
the fleet.
  So, the importance of continued production from Alaska is absolutely 
vital to the continuity of America's merchant marine. And the fact that 
this legislation would provide relief for the excess oil speaks for 
itself.
  Let me now draw your attention to some charts that I think explain 
this in detail, so we will have a little better understanding of just 
what the issues are before us. This is the area in Alaska. I wonder if 
I could have the staff provide me with a pointer, if there might be one 
available at this time, so I can continue my presentation? I think it 
will be a little more beneficial to have it.
  What we have here is a chart that depicts in detail the disposition 
of Alaska's north shore crude oil.
  Let me give this to my associate over here and perhaps he can point 
out where the oil begins, the production area in Prudhoe Bay, which 
went into production in the 1970's. An 800-mile pipeline was built 
across the breadth of Alaska. At that time that pipeline was one of the 
engineering wonders of the world. It was first estimated to cost 
somewhere in the area of $900 million. By the time it was completed, it 
was somewhere in the area of $7 to $8 billion. There are numerous pump 
stations along the 800 miles of pipeline. The terminus is the Port of 
Valdez, and that port handles 25 percent of the total crude oil that is 
produced in the United States.
  Let us look at the destination of this oil. Alaska, my State, 
consumes 70,000 barrels a day in three relatively small refineries. 
That oil is used in our State for jet fuel, for heating oil, diesel, 
gasoline, and other purposes.
  Then, first of all we ship from Valdez to our neighboring State of 
Hawaii directly, in U.S.-flag vessels, some 60,000 barrels per day. 
That is utilized in the refinery outside of Honolulu.
  The second route is a rather curious one. This was by congressional 
action, where we authorized a small amount of oil to go in foreign-flag 
vessels to the Virgin Islands, to the refinery at St. Croix, that is 
the Amerada Hess refinery in the Virgin Islands which is currently 
under U.S. flag, obviously, but is not considered a U.S. port in the 
interpretation of the Jones Act. Some 90,000 barrels of oil go that 
great distance around Cape Horn, the southern point of land of South 
America.
  Then we go to the next half circle. This is the oil we are talking 
about allowing free market flow, to be exported. This is oil that moves 
down to Panama. The reason it moves to Panama is, simply, these tankers 
cannot go through the Panama Canal, so they built a pipeline across 
Panama, and it goes to the gulf coast.
  As a consequence of developments in Colombia, which is down below, 
developments in Venezuela and other areas, including Mexico, the 
economics of moving this Alaskan oil this great distance, unloading it, 
moving it across the pipeline and loading it again, and taking it into 
the gulf coast, when other oil is available, as I have stated, from 
Central America, South America, and Mexico to the gulf coast--it is 
simply no longer competitive. So we have this excess of some 75,000 to 
200,000 barrels a day.
  Let us look at where this oil goes, remaining, in the larger areas. 
The State of Washington receives some 440,000 barrels per day from 
Alaska. A good portion of Washington--I would say somewhere in the area 
of 95 percent of Washington's consumption is Alaskan oil--as it should 
be because of the proximity.
  The rest of the west coast, down in California where we have, in the 
San Francisco area and Los Angeles area, large accumulations of refined 
product. I am told California is currently consuming about 770,000 
thousand barrels a day. I am very pleased to note the Senator from 
California, Senator Feinstein, is with me on this legislation to allow 
this export, because she and other Californians recognize the 
significant impact of relieving this excess, what it would do to 
stimulate the small operators, and for the creation of new jobs.
  So that is where the oil goes. I just want to make one more point. As 
Alaska oil declines, the obvious alternative is for these areas to look 
toward imported oil. That imported oil would not be in U.S.-flag 
vessels. It would come in, in foreign vessels, as some of it currently 
does to California and, to a smaller extent, the State of Washington. 
So that is where the oil goes. It goes in U.S.-flag vessels.
  What we are talking about, if this legislation is approved by this 
body, and we do move that surplus out, is a chart very similar to the 
this one, although you will note there is no oil moving through the 
Panama Canal. We should have included the Virgin Islands as continuing 
to receive their oil, which they will.
  But the point is the west coast--Washington, Oregon, California--
clearly are going to receive the same amount of oil. Hawaii will 
receive the same amount of oil. And this excess that previously went 
down here is going to be available in the Pacific rim. We have no idea 
what the dictate will be, other than it will have to go in U.S.-flag 
vessels and we have reason to believe that those countries have an 
interest in this oil because of its viscosity and it will be acceptable 
in the marketplace.
  Mr. FRIST assumed the chair.
  Mr. MURKOWSKI. Let us see what we have next. These are some rather 
interesting charts. I talked some time ago about refined gasolines and 
the price relative to the east coast and west coast. Of course, the 
east coast is dependent on oil coming in from various places around the 
world. Virtually no Alaskan oil comes on the east coast. It is oil that 
comes from Central America, Venezuela, the Mideast, and other places. 
What we have is the average wholesale price of unleaded regular gas 
from California versus New York.
  We notice in 1985, California was slightly higher than New York; in 
1986 the margin was again substantially higher, 4 cents a gallon; in 
1987 it equalized; in 1988 it equalized. Then, in 1989 we found that 
New York was higher. In 1990 we found New York was higher. In 1991 we 
found New York was higher.
  One would expect the east coast to have higher costs simply because 
of longer transportation to market, bringing that oil in through the 
Mideast and other areas.
  Then, in 1992 we saw a rather curious change. In 1992, we saw New 
York at 66 and California at 69.
  When I say California, I am talking about the entire west coast 
average as opposed to a specific State. When we are talking about New 
York, we are talking about the entire east coast.
  In 1993, we saw a differential gain where it was more expensive on 
the west coast than on the east coast. In 1994, again we saw 57 
compared to 60.
  So the point is that California was higher in the wholesale price of 
unleaded regular gasoline. When one considers that we have had a 
surplus of oil on the west coast, during that time that we have close 
proximity from the standpoint of Alaskan oil coming down to the 
refiners, one may begin to question why that is the case.
  This chart attempts to compare--unfortunately, we could not get more 
current figures than 1993--the refiner growth margins in 1992 dollars 
per barrel. This chart was a consequence of information that was 
provided us by the Department of Energy. It lists PADD V average, which 
are the distributors of the west coast U.S. refiners. It shows their 
growth margins vis-a-vis the U.S. average. As one can see, the west 
coast gross profit margin per refiner is rather interesting in 
comparison to the rest of the country. I have no hesitation to 
[[Page S6658]] point out that the business community is entitled to 
what the traffic will bear. But it is interesting to see comparisons of 
one part of the country vis-a-vis another.
  This chart actually belonged to the one earlier when we were 
comparing New York and California or the east coast vis-a-vis the west 
coast. But as you can see, the spread lengthened over here in 1992 when 
California wholesale price exceeded that of the east coast price. Maybe 
we will have a chart that will give us a little further explanation.
  I would like to defer a little bit to address a concern that we have 
in Alaska. It is evident as we address future years. Clearly, you can 
see the projections of Alaskan North Slope production. We are here in 
1995, and we are somewhere around 1.6 million barrels per day. That 
production, if you will look at the light gray, continues to decline. 
So this shows how, if we can significantly reduce the decline in the 
Trans-Alaska Pipeline oil production, the pipeline will be economically 
viable for a longer period of time. That is what we are talking about 
here, trying to bring this margin of reserves on line and provide more 
jobs and import less oil, all of which I think everyone would agree 
makes good sense and is in the national interest of our Nation.
  We have had discussions that would suggest that Alaska North Slope 
exports will increase consumer prices at the gas pump. The reality 
dictates otherwise. The Department of Energy I think carefully studied 
the issue and found that the consumers would not see any discernible 
increase in the price at the gas pump. The Department of Energy showed 
that the west coast refiners, as I have shown on the chart--this is the 
Department of Energy talking--enjoyed the widest refiner growth margin 
in the country. West coast refiners are buying crude oil for less per 
barrel than anywhere in the country. Yet, they are selling their 
gasoline and other refined products for more than anywhere else in the 
country. Wholesale gasoline prices, as I have said, in California are 
consistently 3 or 4 cents higher than in New York.
  Some say that energy production will not go up, that Alaska North 
Slope exports will not increase oil production in California and 
Alaska. Again, I would defer to the Department of Energy report which 
carefully studied the issue and concluded that oil production would 
increase by 100,000 to 110,000 barrels per day by the end of the 
decade. Both California independents and British Petroleum testified on 
March 1 that they expect substantial production increases in California 
and Alaska.
  Some believe that there will be an increase in oil spills if ANS 
crude is exported. The reality is that the DOE carefully studied the 
issue and found that the exports will actually reduce tanker traffic in 
U.S. waters, especially in California as a result of the increased on-
shore production.
  Furthermore, any tankers exporting ANS oil exported from Alaska will 
proceed as I have said to cross the ocean and not along the shore.
  Mr. President, I think the Senator from Alaska--I would be happy to 
yield to the Senator from Alaska, if I may retain my right to the 
floor.
  The PRESIDING OFFICER. Is there objection?
  Mrs. MURRAY addressed the Chair.
  The PRESIDING OFFICER. Is there objection to the unanimous-consent 
request?
  Mrs. MURRAY. Mr. President, parliamentary inquiry: Does that take a 
unanimous-consent?
  Mr. STEVENS. Will the Senator use the microphone, please, so we might 
hear what she is saying?
  The PRESIDING OFFICER. Unanimous consent is required.
  Is there objection?
  Mrs. MURRAY. I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. STEVENS addressed the Chair.
  The PRESIDING OFFICER. The junior Senator from Alaska has the floor.
  Mr. STEVENS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. STEVENS. Mr. President, I thank the President.
  I am saddened to see the opposition that is coming to the proposal to 
deal with the distribution of Alaska's oil in the fashion that we are 
facing right now. I am one of the few Senators who was here at the time 
the original Mondale amendment passed that restricts the export of 
Alaskan oil. I remember commenting on it at the time that I did not 
think we would ever sell Alaskan oil to Japan. At that time, we were 
working on a theory that would have established a crude stream 
internationally so that Alaskan oil would not be sold to Japan but it 
would be delivered to Japan, the Saudi Arabian oil would not be sold to 
our east coast but it would be delivered to our east coast, that we 
would reduce the transportation distance for tankers on the oceans of 
the world by establishing a crude stream theory, that the crude oil 
would be delivered to the closest port where it could be utilized, and 
the sales would take place through arrangements that were made 
throughout the world with accommodation being made to every producer 
for the savings on transportation. We were never allowed to establish 
that concept for a lot of reasons.
  Just as we still have in place in Alaska the Jones Act that restricts 
transportation to Alaska of all goods and services from Seattle and 
other places in American-built ships, we are the only place in the 
United States where the export of oil is prohibited, and it is only 
prohibited really as far as the oil that is transported in the Alaskan 
oil pipeline. I have always said it was unconstitutional. I would 
invite anyone to read the Constitution.
 It is not constitutional to require that the products of one State be 
exported only through the ports of another State, and that is exactly 
what happens to Alaskan oil. Alaskan oil goes to the west coast; it 
goes to Washington; it goes to Oregon and California, and it is refined 
there and then the products are exported. They do not consume our oil. 
It is amazing to see this kind of reaction. I wonder what would happen 
if we said that the corn produced in Iowa can only be exported through 
a Chicago exporter. This is the same kind of restriction. It makes no 
sense.

  Interestingly enough, the author of the amendment that originally led 
to this prohibition is now the United States Ambassador to Japan, and 
he is seeking the removal of the prohibition, as I understand it. We 
come to the time now where the question is whether there can be an 
exception made for the export of Alaskan oil in U.S.-made vessels, 
U.S.-manned vessels, entirely in accordance with the current situation, 
and have some of the surplus oil that has been developed on the west 
coast be exported.
  At the time we passed this amendment, the projections were that what 
was then known as district 5, the west coast, would be short of oil 
during this period. To the contrary, because of other imports that are 
coming into the west coast, there is a surplus of oil in southern 
California and along the west coast in general. It now appears it would 
be to the best advantage of our Nation if there is this authority to 
export a portion of the oil that comes through the oil pipeline.
  Mind you, Mr. President, that will not apply to any oil discovered in 
Alaska that is now transported through the Trans-Alaska oil pipeline. 
It was one of the conditions we had to agree to at the time we got the 
Trans-Alaska Pipeline, authorized by one vote, I might add. It was the 
vote of the then Vice President which broke the tie that developed when 
we considered the Alaskan oil pipeline amendment to the Right-of-Way 
Act, when that act was originally passed.
  I find myself in the strange position of wondering why, after so many 
years, we still have this opposition to Alaskan oil production. It is a 
strange thing that the area of the country that has benefited most, 
more than Alaska has ever benefited--Seattle, WA, and Washington State 
have benefited more from Alaskan oil production than we have in terms 
of jobs and in terms of basic income--it does seem to me it is an odd 
thing that there is opposition to having it go where market forces 
would take it. I wish we could go back to the concept of the crude 
stream that we were working on at that time. It still makes no sense to 
me to see Middle Eastern oil go around the horn or through other 
mechanisms to get to the Far East, travel all that distance on the 
oceans by tanker, and have Alaskan oil reverse that and go down the 
west coast and through the pipeline [[Page S6659]] and up into the east 
coast of the United States.
  That is the system which was brought about by the Mondale amendment 
that prohibited the export of oil from the United States that had been 
transported by the Trans-Alaska oil pipeline. I do think it is time we 
recognize that is an unconstitutional restriction on the export of oil 
from Alaska only, and remove the obstruction to the export of that 
amount that would be exported in American-flag vessels.
  Now, Alaskans do support the concept of American-flag vessels. That 
is, we like the idea that the American-flag vessels are the vessels 
that come to the Prince William Sound to receive Alaska's oil for 
transport. This is a period of time, I think, when we have to recognize 
that the maldistribution has led to a strange pricing system on the 
west coast and clearly it will be in the best interests of the United 
States if we modify this law now.
  I was most pleased to see the vote on this bill, the amendment to 
this bill, as it came from the Energy Committee, and I congratulate my 
colleague and good friend, Senator Murkowski, for the work he has done 
in shepherding this amendment through the committee and to the floor. 
This was really the subject of the bill that Senator Murkowski and I 
introduced. S. 395 was introduced in February of this year, and the 
bill has, for all intents and purposes, been added to the bill which 
deals with the subject of the Alaska Power Administration sale. This is 
an amendment that I think is timely, as I said. We are now in a 
situation where the pricing of oil is changing drastically. I am sure 
we have all read the forecasts that are coming now. There is no 
question that the concepts of the projections that were made in the 
1960's when we considered this Alaska oil pipeline originally have not 
now been proven accurate.
  I do believe that conditions have changed. They have really improved 
to a great extent. In 1978, world crude reserves were estimated to be 
649 billion barrels. But last year, the reserves that had been proven 
reached 1,009 billion barrels. That is a 55-percent increase in the 
world's known reserves of oil.
  As a consequence, prices have reflected that increase in reserves. 
The oil price has dropped. If you put it on a deflator basis and carry 
it through from the times we were debating this basic Mondale 
amendment, oil prices are substantially lower than they were then, even 
at today's nominal values.
  I do believe the Senate ought to take note that even the Washington 
Post reported last year gasoline has never been cheaper than it has 
this year compared with what people pay for other goods and services. 
In other words, the distribution system for oil has changed with the 
discovery of reservoirs for production of oil throughout the world. We 
have maintained a protection against a sudden shortage or stoppage such 
as we had at the time we had the Arab oil embargo. We now have a 
strategic petroleum reserve that has about 600 million barrels of oil. 
We have other reserves under the control of the Federal Government. 
There is no reason for us to have a prohibition against the export of 
Alaskan oil based upon a worldwide shortage of reserves.
  That is also what was talked about back at the time the Mondale 
amendment was approved. We thought we were running out of oil and oil 
was so finite it would not meet the demand of the industrial economies 
over the period ahead, so there was a necessity, they felt, to maintain 
the oil to be produced from Alaska's North Slope for U.S. markets.
  Those U.S. markets have been satisfied now, many of them, for years, 
from oil from outside the United States at a much lower price than any 
oil is produced in the United States. And that is why we are buying it 
from overseas.
  I do not support the concept that we should not have a basic oil and 
gas industry in this country to produce oil and to meet our needs. I do 
think we should do everything we can to stimulate that industry so it 
has the productive capability to meet our needs and to continue, along 
with the strategic petroleum reserve, to meet our needs even in times 
of crisis or embargoes against our purchase from offshore.
  There is no question that the production of Alaskan oil has changed 
the overall structure of oil pricing for the great benefit of the 
United States, as a matter of fact. We have had considerable impact on 
the pricing from abroad, and I think that will continue.
  This is not a bill to bring about the total export of all production 
of Alaskan oil. It is to allow exports on the basis of them being 
transported out of the United States by American-flag vessels at 
considerable cost difference to the prices paid for transportation by 
foreign producers of oil that are bringing oil into the United States.
  I think that at this time right now, when we need to spur the 
creation of jobs in the United States, this is a good way to do it. If 
Congress approves this oil export legislation, we believe it will spur 
the creation of new jobs, spur energy production, and raise revenues 
for both the Federal and local governments.
  Small, independent, and other oil producers, maritime labor, and 
independent tanker owners hope Congress will enact this bill as quickly 
as possible, because they have told us just that. It will create jobs. 
It will give an incentive to additional energy production and raise 
Federal and State revenues and enhance our basic economic security.
  I think that energy security is a subject we ought to explore 
sometime. This is part of that concept of spurring the economy to go 
further into exploration and discovery of oil. In particular, I think 
it will spur the restoration of the stripper oil wells in the 
southwestern part of the United States. The Department of Energy has 
concluded that if we do export a portion of Alaskan oil, it would 
result in a substantial net increase in U.S. employment, stimulating 
about 25,000 new jobs by the end of the decade.
  As we review this bill, I hope people from throughout the country 
will understand that approving it will mean that Congress has taken 
action to preserve the independent tanker fleet and to maintain the 
thousands of skilled maritime industry jobs that will be required as we 
go into this new phase of distribution of Alaskan oil, and it will be 
done at no cost to the taxpayers. This is a segment of the American 
merchant marine. They face a bleak future unless there is a stimulus to 
export some of this oil. The Alaska North Slope exports will help 
solidify the demand for this tanker fleet.
  The act of Congress making these exports possible, the Department of 
Energy has concluded, would raise royalty revenues for the Federal 
Government and tax and royalty revenues for the States of Alaska and 
California. Federal revenues are projected to increase by $99 billion 
to $180 billion in terms of 1992 dollars between 1994 and the year 
2000. The Congressional Budget Office [CBO], has told us that this 
legislation will raise a net revenue of $55 million. It is a revenue-
sound proposal.
  By lifting this ban, Congress will, as I said, restore demand in 
California and in the Southwest region of the United States. The 
Department of Energy projects that oil production will increase by at 
least 100,000 barrels per day by the end of the decade in that part of 
the country. That is because the independents face a squeeze in terms 
of the price, due to the fact that there was an excessive amount of oil 
in southern California, in particular. And the stripper wells, the 
small producing wells, have gone out of production.
  We believe that, by giving an incentive to produce, it will bring 
these new jobs and will give us the chance to have a signal from 
Washington that we believe enhanced drilling activity should take place 
in that part of the country and create new jobs in the area.
  There is very little, if any, impact of this proposal on the east 
coast or the gulf coast of the United States. The oil has been going 
through the Panama Canal pipeline, the oil that would be exported, and 
there, too, the markets that the Alaskan oil goes to now have a surplus 
of oil due to the increase of imports in the United States from the 
Middle East and other parts of the world.
  My point, Mr. President, is that this is a different oil world than 
we had when we considered the Alaska oil pipeline amendments in the 
1970's. There is a much greater reserve of oil worldwide, a proven 
reserve, and there [[Page S6660]] is a much different distribution 
pattern. The effect of the current distribution pattern is we have 
created surpluses on the west coast where, at the time, we had 
projected that there would have been a shortage if it were not possible 
to limit Alaska's oil production to distribution to south 48 demand 
only.
  The administration has supported this bill. The Senate Energy and 
Natural Resources Committee is in support of this legislation. I think 
we should act on it as soon as possible.
  The difficulty that I have, really, with the bill is it should have 
happened a long time ago. We have tried at times to remove this 
prohibition. As the Senate knows, over the years, we had a series of 
votes on the subject, and always the opposition came from the same 
source.
  I hope that the Senate now, with new information, with support of the 
Energy Department, with the administration's overall support of the 
legislation, with the concept of American industry now understanding 
what it means to them--we now have support from the west coast 
industries; we have support from the independent tanker operators; we 
have support from the maritime unions; we have support from the 
maritime industry in general; and we certainly have support from people 
who understand what this will mean in terms of restoring jobs along the 
west coast, as I said, an estimated 25,000 jobs--will support this 
legislation.
  This bill also has the sale of the regional Power Marketing 
Administration, as originally proposed, strangely enough, about the 
same period of time that the Alaskan oil pipeline amendments were 
adopted, as offered by Senator Mondale, which restricted the export of 
oil transported through the pipeline. The administration at that time 
recommended that the Alaska power authority be sold.
  We still are working toward getting that approved. The sale of these 
assets will generate between $1.6 and $4.9 billion in terms of the 
Department's sale of the regional power marketing administrations. We 
now have Alaska's marketing agency, a portion of a national plan, and I 
am hopeful that the Congress will approve the national plan, which will 
go ahead with the recommendations I originally made to the Senate in 
behalf of the administration in 1973.
  I think that this will reduce, by the way, the responsibilities of 
the Department of Energy. There will be a substantial reduction in cost 
to the taxpayers to maintain these regional power marketing 
administrations, and it makes sense for us to do this now, to take 
advantage of the circumstances that exist throughout our country and 
take the Federal Government out of the business of running regional 
power marketing administrations.
  On permitting export of Alaskan crude, there has been this glut that 
has been created on the west coast. It keeps the crude oil price 
artificially low. It has meant, as I said, the small stripper wells, 
even some of the medium-sized operators, have gone out of business. 
They have had no incentive to develop new reserves or to really reach 
out in wildcat areas of great promise.
  We believe the Mondale amendment has brought about a dependence upon 
the southwestern area of the United States on cheap oil that comes 
about because of the cost of transporting that oil beyond California 
down to Panama through the Panama Canal pipeline, onto another tanker 
and taken up to a market someplace in the south 48 States in the 
eastern part of our country.
  The result of that long trip for the Alaskan oil to reach a market, 
under the prohibition against export, cannot be sold except in the 
United States, is that the sales have been taking place in California 
far below the market price of oil. It has established, as I said, a 
glut of oil on the west coast. It has kept the prices there so low that 
they have lost their own industry. We now feel that the California 
people understand that the result has not been good for that State nor 
for the Nation. We need the ability to produce from the areas that have 
capability of producing oil in times of crisis when there is a 
stoppage, when there is a shortage, and this bill before us now will 
give us that incentive.
  The Department study that was released in June 1994--I am sure my 
colleague has talked about it already--has indicated that this will be 
the case. It has been tested in many places. I do not see anyone 
discounting the study that was made by the Department of Energy that 
led to the conclusion that it was in the national interest to pass this 
bill. There are a few local spots where there is a willingness to 
prevent the enactment of legislation in the national interest because 
of some special or private interest on their part. That was an interest 
that was created, in my judgment, by an unconstitutional provision to 
begin with, one that should be eliminated. If I had my way it would be 
a bill to eliminate it altogether.
  But this legislation will give authority to export under specific 
conditions. It is a concept that would be consistent with the American 
merchant marine concept of requiring that our oil be exported in 
American-flag, American-crewed, American-built vessels. I do believe 
there is a great benefit to the American people as a whole. It is a 
step that should have been taken a long time ago.
  It is an interesting thing, I think, to go back and examine some of 
the history of Alaska's oil industry, Mr. President. When we were 
seeking statehood, there were a great many people who opposed statehood 
for Alaska because they said such a vast area could not afford self-
government. And so a series of people made suggestions as to how we 
might be able to finance our own future, and one of them was to 
increase the amount of land that Alaska received as compared to other 
States.
  The State received from the Federal domain section 16 and 34 out of 
every township. They had to wait until those townships were surveyed, 
and we find the strange situation that California still is waiting for 
a substantial amount of its land, and Utah also and Nevada, because the 
lands have never been surveyed. When we looked at the situation for 
Alaska, when we realized people were willing to allow Alaska to have a 
greater land grant, and we did obtain a greater land grant, Mr. 
President. Congress approved the transfer of 103.5 million acres to 
Alaska out of our 375 million acres. What we did, however, is we 
permitted Alaska to select its land from vacant, unappropriated, 
unreserved lands, and the net result was that we had the opportunity to 
decide the lands we wanted for our future.
  The difficulty developed in what we call (D)(2), section 17(D)(2) of 
the Alaska Statehood Act required us to have a study of the portions of 
our State that should be set aside in the national interest. We then 
proceeded to produce what is known to us as ANILCA, Alaska National 
Interest Lands Conservation Act.
  That lands act restricted our right to the lands we could have and 
required a substantial portion of Alaska to be set aside in national 
withdrawals and no longer available to us for selection.
  In the process, unfortunately, we have gone back to, again, a real 
delay factor in the surveying of lands that we have selected. The last 
time I had an estimate, it would be 2050 before all of the lands we 
have selected are surveyed and the native lands, Congress subsequently 
passed an act which confers on Alaska Natives a substantial amount of 
land, almost 45 million acres of land, in satisfaction of claims 
against the United States for the taking of their lands at the time 
Alaska was acquired from Russia.
  The reason I mention these delays, Mr. President, is that we have a 
series of sedimentary basins in Alaska that are capable of producing 
oil or gas. Only three of them have been drilled so far. I believe 
there are 17 of them--I think 15 of them are onshore--that are capable, 
these areas are capable of producing oil and gas. This bill before us 
has nothing to do with additional exploration or use of Federal lands, 
but if you just look at the lands that the State of Alaska has, the 
lands that the native people have a right to under legislation that has 
been passed by Congress previously, the great difficulty that we have 
is establishing a mechanism for transport of that oil to market, and 
beyond that establishing a demand for it.
  As long as there is a surplus of oil on the west coast, I do not 
perceive that there will be a demand for development of the oil and gas 
capability of the State of Alaska lands or Alaska Native 
[[Page S6661]] lands. But I do believe that if we can have a bill such 
as this passed and have that glut be removed and restore the incentive 
to the industry to explore for and develop oil in the promising areas 
of the west that are not on Federal lands, they are not in any way 
restricted by Federal Government policy, then I think we will have a 
different future for our State.
  That was the intent of the people who brought about the amendments to 
the Alaska Statehood Act to increase the amount of land to be given to 
our State. I think that our State, in surveying the lands that we would 
select, tried to select the lands that had potential resource value.
  However, that resource value is really not predictable now because of 
this glut of oil. No one really wants to put money into developing oil 
and gas opportunities on Alaska State or Native lands so long as there 
is an existing restriction on the export of oil produced in those 
slopes.
  Incidentally, that oil is produced from State lands. Many people 
think the oil is from Federal lands. The State of Alaska owns the land 
from which the Prudhoe Bay oil field is produced. We view it as an 
unconstitutional restriction on our State's powers to have this 
restriction against the export of oil produced from lands owned by the 
State of Alaska.
  Again, one of the things that makes us so interested in this 
legislation is the future viability of the lands that we own. Those 
lands are valuable for oil and gas, and I do believe we will see the 
day, when this bill passes, that the independent oil industry will come 
to Alaska and start inventorying these potentials because of the fact 
that there will be a potential increase in demand for the oil and gas 
from our State.
  We are in a very strange circumstance here, apparently, and that is 
that we want to try to get this bill to a vote. I, particularly, very 
much would like to see that.
  Mr. President, I am having a little discussion with staff as to the 
accuracy of a comment I made. My memory is that it was the Mondale 
amendment. My staff says the amendment that was finally enacted by the 
Congress at the time was the Jackson amendment--the amendment that was 
finally adopted by the Senate in July 1973. They are right. But I am 
also right that it was Senator Mondale that raised the subject. I had a 
debate at length with him at the time, and his amendment was 
subsequently modified by the former Senator from Washington. It was the 
Jackson amendment that finally passed. The initiative for the 
restriction on the export of Alaskan oil originated with Senator 
Mondale. I have, since that time, called it the Mondale amendment. If I 
have offended anyone by having so referred to it, I am sorry about 
that. But there is no question that we discussed at length with Senator 
Mondale the proposal to restrict the export of oil. I do recall at the 
time that in order to offset Senator Mondale's proposal, I introduced 
an amendment which would have prohibited the export of oil from any 
State in the Union, which I think would be within the constitutional 
powers of Congress. I did not pursue that, and although Senator Jackson 
opposed the basic Alaska pipeline amendment, he was the one that did 
offer the amendment that was adopted. It was the amendment that 
currently is in the law as far as the exporting of Alaskan oil. I hope 
those on my staff are satisfied.
  I see my colleague is back. I might say to him, Mr. President, that I 
do hope that the bill will pass. And as I have said in the Senator's 
absence, I believe as chairman of the Energy Committee, you have done a 
great service for the country, for California, and for our State in 
bringing this subject to the floor in a positive way. I hope other 
Members of the Senate will address the report he has presented and show 
the support that we have for the concept now. I do hope that there is 
an overwhelming vote in support of the bill that we have before us to 
bring about both the sale of the power administration, as well as to 
enable the export of Alaskan oil under the circumstances described in 
the bill.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alaska [Mr. Murkowski], is 
recognized.
  Mr. MURKOWSKI. I thank my senior colleague from Alaska regarding his 
comments on this very vital issue, which is important not only to our 
State but to the Nation as well.
  Mr. THOMAS. Will the Senator yield for a question?
  Mr. MURKOWSKI. I am happy to yield without losing my right to the 
floor.
  Mr. THOMAS. I have a couple of questions that refer to both aspects 
of the bill.
  First, the power marketing agency. It is my understanding that there 
is a uniqueness to this power marketing agency; for example, the 
Western Area Power Administration that is in the West, in that 
instance, it serves a number of States and different municipalities in 
a great many uses. It also does not have the generating facility but 
simply the distribution facility. So it is my understanding that in 
this bill the Alaska Power Authority is substantially different in 
composition, is that correct?
  Mr. MURKOWSKI. The Senator from Wyoming is correct. These two power 
marketing associations are separate. They are not connected. The 
distance between Snettisham and Juneau and Anchorage is 600, 700 miles, 
so they are not dependent on one another. The provision for the sale--
unlike other Federal marketing administrations, the Alaska Power 
Administration owns its power-generating facilities and hydroelectric 
projects. It was never contemplated that these two relatively small 
projects remain under Federal determination. It was the considered 
opinion that once they were up and operating, the contribution to 
utilize the tremendous hydro potential, even though it is a very small 
percentage, that they be disposed of, and as a consequence, we have 
been working with the administration in the State of Alaska to achieve 
this. We feel that the support base is there and, of course, the fact 
that the Department of Energy and the administration support this, I 
think, is evidence that we have a constructive proposal here.
  Mr. THOMAS. I thank the Senator. With respect to the oil export 
portion, I recall the hearings that we had in the Energy Committee. I 
ask the Senator if it is not true that we had substantial testimony, 
not only from Members of Congress from the California delegation, but 
also representatives of the private sector that dealt with this whole 
business of seeking to develop and encourage the domestic oil market, 
as is the case in Wyoming. We have been very much affected by that. 
There have been nearly half a million jobs lost in the domestic oil 
industry over the past 10 years. We now have, of course, the highest 
imports that we have had for a very long time--the highest ever, I 
believe. And the testimony, as I recall, was that the opportunity to 
export some of the oil from Alaska would strengthen the domestic oil 
industry,
 which would result, I think, in more jobs not only in Alaska but 
perhaps in other parts of the country as well.

  There was testimony about the assistance to the oil production aspect 
to the California economy, as well, of course, as providing an 
opportunity to strengthen the domestic industry as a matter of national 
security. That seemed to me to be the tenor of the testimony. I ask the 
Senator if that is the impression that he had?
  Mr. MURKOWSKI. Mr. President, yes, the Senator from Wyoming is 
correct. As I recall specifically, the Department recommended in their 
Department of Energy report to the U.S. Treasury that by the year 2000 
that would be approximately $180 million in tax revenue to the Treasury 
and there would be an increase of employment by some 11,000 to 16,000 
U.S. jobs immediately, and by the year 2000, 25,000 jobs.
  I think that was evident in the base of support that was evident when 
the vote came out of the committee, 14 to 4. The Senator from Wyoming 
will recall, Senator Domenici, Senator Nickles, Senator Craig, Senator 
Thomas, Senator Kyl, Senator Graham, Senator Jeffords, Senator Burns, 
Senator Campbell, Senator Johnston, Senator Ford, Senator Bradley, and 
Senator Bingaman voted to vote out of committee the issue of the oil 
export relief, as well as the proposal on the Alaska power authority. I 
think the jobs issue was well covered in that report. [[Page S6662]] 
  Mr. President, I would like to refer to an article that appeared on 
February 22, and it appeared in the Seattle Times. I think it was an 
editorial or an op-ed. It was a column, in any event. It suggests a 
number of reasons why it might not be in the national interest to 
continue the restrictions on the export of Alaska's North Slope crude 
oil.
  I feel that the facts as confirmed by the U.S. Department of Energy 
report, the General Accounting Office, and other objective sources show 
that the export of ANS crude oil on what has been agreed upon, that is 
U.S.-flagged and U.S.-crewed vessels would, indeed, create jobs, 
increase our energy production, and as a consequence our national 
security, and increase Federal and State revenues.
  Now, in that particular column there was a reference to the Senator 
from Washington that suggested that exports would ``not meet the 
statutory test designed to protect broader national interests.'' 
Further, exports would ``seriously hurt consumers, jobs, and the 
environment in our own State.''
  Again, I would refer to the comprehensive June 1994 study by the 
Department of Energy which concluded that exporting ANS crude oil on 
U.S.-flagged vessels would, one, again add as much as $180 million in 
tax revenue to the U.S. Treasury by the year 2000; two, increase U.S. 
employment by 11,000 to 16,000 jobs immediately and by 25,000 jobs by 
the year 2000; third, preserve as many as 3,300 maritime jobs; fourth, 
increase American oil production by as much as 110,000 barrels a day by 
the year 2000; fifth, probably decrease crude oil tanker movement in 
U.S. waters; six, have minimal or nonexistent effect on prices to 
consumers, since the benefit of the current subsidy to west coast 
refiners from exports is not shared with consumers of refined products.
  Now, the statement in the article indicated and was referenced to the 
Senator from Washington that ``over the years Alaska North Slope crude 
oil has fueled Washington State. Ninety percent of our crude oil comes 
from the North Slope and our refineries are operating at 90 percent 
capacity. Today this secure supply of oil faces a threat.''
  The fact is, if exports are permitted, the Pacific Northwest will 
continue to be the closest market for ANS crude. Given the low cost of 
transporting oil to Puget Sound, there is no economic reason why any 
oil now going there be in jeopardy.
  Even the Coalition To Keep Alaskan Oil, which is a rather interesting 
organization--it is an oil refinery-sponsored group, just a few 
refiners are supporting it now--is opposed to exports. They admitted in 
a paper last year that if exports were permitted, only the ANS crude 
oil surplus to the west coast requirements would be exported.
  Excess west coast oil formerly went to Panama and was transported 
across the isthmus for transfer to smaller United States tankers that 
moved the oil to gulf coast refineries. That process, which involved 
dual handling of the oil, is now prohibitively expensive given the low 
world price of oil.
  Now, the article further attributes to the Senator from Washington 
that the North Slope has given us a reliable oil supply. Carried aboard 
U.S.-flagged vessels, the ships employ Washingtonians as crew members, 
and ``the tankers, that transport Alaska oil are repaired in the 
Pacific Northwest. If export restrictions are lifted, this work will go 
overseas. We could lose 5,000 jobs within our own region and $160 
million in annual employment income. This is more than half of the 
maritime industry's total west coast employment.''
  That is not the case. The fact is that exports will aid substantially 
the maritime industry, and all North Slope crude oil would continue to 
be carried aboard U.S.-flagged vessels with American crews. Labor 
leaders representing 50,000 members have written the President 
supporting exports, stating that ``ANS exports will create jobs, help 
maintain our merchant marine and encourage energy production.''
  Estimates of job losses are completely unsupported. Further, most of 
the U.S.-flagged tankers are lifted for repairs in yards currently in 
San Diego and, to some extent, Portland. The Portland shipyard being 
built in Japan and floated to Portland, portions of that yard have been 
facing financial problems.
  I understand there is a competitive posture between Portland and San 
Diego. We have encouraged that consideration be given to the Portland 
bids. As a consequence, it is my understanding that there are two ships 
that are currently under contract to be repaired in the Portland yard.
  Further, the article attributes the Senator from Washington saying,

       More than 2,000 jobs at refineries, and Anacortes, 
     Bellingham, and Takoma would be lost. Ninety percent of 
     Alaskan oil is consumed by west coast refiners, and these 
     refiners go into refineries as attributed to the Atlantic 
     Richfield Company, Texaco Company, and Shell, plus 
     independents such as Tosco and a smaller refinery, Summit 
     Oil. Six of these refineries are in our State, the State of 
     Washington, competing against foreign barges willing to pay 
     premium prices. Industry experts predict our refineries will 
     shut down or be forced to pay a premium price to keep their 
     Alaskan supply or to purchase substitute foreign crude.

  That argument just is not based on fact. The facts, the hard, cold 
facts, are that two of the refiners mentioned support exports--that is 
ARCO and British Petroleum--and we have evidence of that, which will be 
entered into the Record. And for Texaco, which has not taken a position 
on the issue, supply will be sure. In fact Tosco, one of the refiners, 
has a supply agreement with British Petroleum that offers, in Tosco's 
own words, ``a reliable, economic supply of Alaska North Slope crude 
oil for the next 5 years,'' although it is my understanding there are 
some 4 years to go on that contractual agreement. Foreign buyers have 
no reason to pay premium prices for Alaska crude, because they can get 
their crude oil elsewhere. As stated above, even export opponents have 
admitted at world prices for Alaska crude oil now going to Puget Sound, 
it will not be exported.
  Some independent refiners have opposed exports because the market 
distortion created by the current restrictions allow these refiners to 
enjoy, according to the Department of Energy, ``the largest gross 
refining margins in the world.''
  No credible evidence supports the assertion that, ``If forced to 
compete in a world market like everyone else in the United States, any 
refiner would have to lay off workers.''
  Again, I remind my colleagues, one refiner in question, Tosco, 
already has a long-term contractual supply.
  Further attributed to the article, the Senator from Washington 
states:

       Tosco alone has predicted a $1 per gallon increase if 
     exports are permitted.

  The fact is, the Department of Energy has concluded that the 
``economic benefits of export could be achieved without increasing 
prices either in California or in the Nation as a whole, and that the 
current subsidy to west coast refiners from exports is not shared with 
consumers of refined products.''
  The refiner, Tosco, in their 1994 quarterly report to the U.S. 
Securities and Exchange Commission stated that:

       At the Ferndale refinery in Washington, refining margins 
     average $4.66 per barrel; retail margins continue to be 
     strong, averaging 11 cents per gallon on sales of some 2.4 
     million gallons per day.

  Tosco, of course, may be worried about losing this price advantage, 
but that will not hurt consumers or the national interest. It will 
continue to allow this firm to reap profits, which they are entitled 
to. But they are certainly not passing on any savings to the consumer.
  It is kind of interesting to note why Washington State has some of 
the highest gasoline prices in the country while the refiners, 
including Tosco, have the highest profit margins between the price paid 
for crude oil and the amount at which they sell their refined product 
or gasoline. In the sense these refiners are closest to the point of 
the Alaska oil coming down from Valdez, these refiners are those that 
have the shortest shipping distance; as a consequence, the least 
transportation costs. But one might conclude the consumers in the State 
of Washington are certainly not recipients of the transportation 
advantage that is enjoyed by the geographic location of the proximity 
of the refiners to the Alaska oil supply at Valdez.
  Further reference in the article by the Senator from Washington:


[[Page S6663]]

       Since the Arab oil embargoes of the seventies, our reliance 
     on foreign oil has not diminished and the arguments for 
     retaining [that is, the oil export restrictions] remain 
     strong.

  The fact is that exporting Alaska's North Slope--ANS--crude would 
increase U.S. energy security by stimulating additional production, 
estimated by the Department of Energy at 100,000 to 110,000 barrels per 
day. This will reduce U.S. net oil imports.
  The United States has already removed restrictions in place in the 
1970's on petroleum product exports and on the price and allocation of 
oil, thus improving the efficiency of the market. Exports from every 
State other than Alaska are allowed if certain regulatory requirements 
are met. The effective ban on ANS exports is unique and discriminatory.
  Further, the article makes reference to comments from the Senator 
from Washington:

       With 99 percent of Alaska's crude coming through Puget 
     Sound and 94 percent of this carried on U.S. tankers, foreign 
     replacement oil would not only be more costly, but would be 
     carried on more environmentally risky tankers. The U.S. Coast 
     Guard rates as high-risk one-half of the current foreign 
     tanker fleet that carries crude oil through Puget Sound.

  The fact is, there is simply no basis to assert that the Pacific 
Northwest will need to import oil to replace ANS crude for the reasons 
already listed, or that foreign-flag tankers in Puget Sound waters are 
environmentally risky.
  In fact, the Department of Energy has concluded that exports would 
``probably decrease crude oil tanker movement in U.S. waters.'' 
Further, virtually all the oil coming into Vancouver, BC, comes in 
through the Straits of San Juan, adjacent to the State of Washington 
and British Columbia, and it comes in foreign tankers. So there is a 
high concentration of foreign tanker activity already coming into the 
San Juan area, and some of its goes into Puget Sound as well.
  Another contention is that British Petroleum Corp. would also save 
money by having its tankers built and repaired in foreign countries. 
The fact is that British Petroleum uses and would continue to use U.S.-
flag, U.S.-built, U.S.-crewed tankers to carry Alaska crude because, 
Mr. President, they are a foreign corporation and cannot own U.S. 
vessels. It would make no economic sense for British Petroleum, or any 
other exporter, to reflag foreign-built tonnage to carry Alaska crude, 
when abundant U.S.-flag, foreign-built tonnage is already in existence 
in the trade.
  The ban on the exports of Alaska North Slope crude oil simply makes 
no sense. Reality dictates that it creates an inefficient market that 
breeds extraordinary returns for a few special interests. And some of 
these, unfortunately, do not seem to be inclined to pass the benefits 
along to the consumers. Meanwhile, maritime and oil industry jobs would 
be lost to this destructive trade restriction.
  I am sure the Senator from Washington does not begrudge the fact that 
Alaska might benefit from lifting the ban, any more than the fact that 
Alaskans recognize activity in Alaska is very beneficial to the State 
of Washington. I would again suggest, even on this issue, what is good 
for Alaska is good for the State of Washington.
  Our States are too close and too intertwined to believe that 
restrictions on each other's commerce will be good for one at the 
expense of the other.
  Mr. President, there are some other items that I want to bring to 
your attention; that is, some of the charges relative to what the 
passage of this legislation would do.
  Some have made the argument that as part of the original deal in 1973 
to authorize construction of the pipeline, Congress saw fit to ban the 
ANS exports. Again, I think it is important to note that is not totally 
accurate. Congress did not ban exports in 1973. Instead, for the first 
time, it restricted all domestically produced crude oil, including ANS 
oil, to the same general export restrictions. At the committee's 
hearing on March 1, Senator Stevens, one of the few Senators still 
sitting in this body today who actually cast a vote in 1973, confirmed 
that there had been no such deal.
  Mr. President, there is a question of increased foreign oil reliance. 
The argument is made that by exporting ANS oil, we will increase our 
dependence on the Mideast and other foreign sources of oil. The reply 
to that is quite simple. The Department of Energy concluded that 
enactment of the legislation will decrease our net dependence on 
imports by spurring additional domestic energy production.
  We have heard the concern expressed from time to time about the 
potential that refinery workers would lose their jobs because refiners 
would have to pay more for crude oil. Yet, again in response, the 
Department of Energy concluded that independent refiners on the west 
coast have such high gross operating margins that they will be able to 
absorb any increased crude oil acquisition costs without significant 
job losses. And as the chart that I previously showed, based on the 
figures at hand, clearly there is justification to understand that is 
indeed the case.
  There is a question of lost work to foreign yards that would provide 
repairs. The argument has been made that once exports are authorized, 
the tankers in the Alaska oil grid will all be repaired in those 
subsidized foreign shipyards permitting domestic ship repair yards to 
be no longer economic.
  Tankers in the Alaskan oil trade are free to go abroad for repairs 
today. They rarely do, however, because foreign repairs are subject to 
a 50-percent ad valorem duty. One might wonder about some of our 
restrictive and protectionist types of legislation. This is one of 
them. A recent court decision, the Texaco Marine decision, will ensure 
that U.S. Customs will aggressively enforce collection of that 50-
percent duty, as they should. Some suggested that customs is not doing 
it adequately. I certainly see no reason why customs should not 
actively enforce the law.
  Furthermore, every tanker that is scrapped as a result of the 
declining ANS production is one less tanker that will ever come in for 
need of repair. By spurring energy production, the bill will actually 
increase repair opportunities for U.S. shipyards. As long as U.S. 
shipyards, such as the Port of Portland, San Diego, and others, remain 
competitive, they should expect to do most of the repair work on the 
fleet simply because the vessels are traversing the waters of the west 
coast.
  An argument has been made that ANS exports will destroy the 
shipbuilding sector opportunity to build 1,200 to 1,500 120,000-dead-
weight-ton tankers over the next 5 years. After this charge was made at 
the committees hearings, the leading trade association for the tanker 
industry advised us that not one of its members had a vessel under 
construction and not one planned any new building with so many vessels 
sitting.
  Furthermore, there have been suggestions that there has been some 
violation of GATT or OECD. The argument has been made that the U.S.-
flag requirement is an unprecedented extension of cargo preference and 
violates our international obligation under GATT and GATT's standstill 
agreement and the OECD code. The reply to that is that the U.S. Trade 
Representative formally advised the committee that the U.S.-flag 
requirement did not violate our internal obligations. In adopting the 
United States-Canada Free-Trade Agreement, Congress specifically 
required the use of so-called Jones Act vessels to carry Alaska oil 
exports to Canada. No foreign government currently complained at that 
time.
  There has been some concern that the U.S.-flag requirement violates 
the Treaty of Friendship. That is the FCN, commerce and navigation with 
many nations. The reply to that is that just this past week the 
administration testified again that the U.S.-flag requirement does not 
violate any of our international obligations. The FCN treaties permit 
measures in furtherance of our national security such as preserving a 
militarily useful tanker fleet.
  California offshore production. There has been an argument that 
exports will encourage or increase pressure for California offshore 
production. I reply to that that the Department of Energy concluded 
that the California offshore production will not increase because State 
moratoriums are effectively in place. They simply block any further 
development. At the committee's March 1 hearing the witnesses 
representing the State of California especially rejected the argument 
saying [[Page S6664]] that the moratoriums in effect ban further 
offshore development.
  Mr. President, let me enter into the Record at this time a letter 
from our U.S. Trade Representative, Mr. Kantor, to Senator Bennett 
Johnston, dated March 9, 1955.

       Dear Senator Johnston: This replies to your letter of March 
     2, 1995, requesting information on the implications of cargo 
     preference provisions of Senate bill 395 on our obligations 
     under the World Trade Organization and the Organization of 
     Economic Cooperation and Development, OECD.
       Specifically, you asked if the legislation violates any 
     trade agreements, the potential legal and practical affects 
     of a challenge as well as its effect on the ongoing 
     negotiations on maritime in Geneva.
       As to WTO violation, I can state categorically that Senate 
     bill 395, as currently drafted, does not present a legal 
     problem.
       Further, we do not believe that the legislation will 
     violate our obligations under the OECD's code of 
     liberalization of current invisible operations or its 
     companion common principles of shipping policy. However, the 
     OECD does not have a mechanism for the settlement of disputes 
     and its associations and the rights of retaliation.
       While parties to the OECD are obligated to defend practices 
     that are not consistent with the codes, the OECD process does 
     not contain a dispute mechanism with possible retaliation 
     rights. The OECD shipbuilding agreement, by contrast, does 
     contain specific dispute settlement mechanisms although the 
     agreement does not address flag or crew issues.
       Your letter requests guidance on the implications of Senate 
     bill 395 on the GATT's ministerial decision on negotiations 
     of maritime transport service . . . which is the document 
     that guides the current negotiations on maritime and the WTO. 
     The maritime decision contains a political commitment by each 
     participant not to adopt restrictive measures that would 
     improve its ``negotiating position'' during the negotiations 
     which expire in 1996.
       This political commitment is generally referred to as a 
     ``peace clause.'' Actions inconsistent with the ``peace 
     clause'' or any other aspect of the maritime decision cannot 
     give rise to a dispute under the WTO since such decisions are 
     not legally binding obligations.
       There are, of course, potential implications for violating 
     the ``peace clause'' by adopting new restrictive measures 
     during the course of the negotiations. These implications 
     could include changes in the willingness of other parties to 
     negotiate seriously to remove maritime restrictions that 
     might lead to certain parties simply abandoning the 
     negotiating table. But the maritime decision does not provide 
     the opportunity for retaliation.
       Our view is that the U.S.-flag preference provisions of 
     Senate bill 395 do not measurably increase the level of 
     preference for U.S.-flag carriers and actually present 
     opportunities for foreign flag vessels to carry more oil to 
     the United States in light of the potentially new market 
     opportunities resulting from enactment of S. 395. Thus, it 
     would be very difficult for foreign parties to make a 
     credible case that the U.S. has ``improved its negotiating 
     position'' as a result of S. 395.
       For reasons I have explained, we are certain that the U.S.-
     flag preference does not present legal problems for us under 
     the WTO. However, in the event any U.S. measure were found to 
     violate our obligations, WTO does not have authority to 
     require alterations to affect statutes. That remains the 
     sovereign decision of the country affected by an adverse 
     panel ruling. A losing party in such a dispute may alter its 
     law to conform to its WTO obligations to pay compensation or 
     accept retaliation by the prevailing party.
       Finally, we agree with you that it would not be appropriate 
     to include a requirement that ANS export in U.S.-built 
     vessels.
       I trust this information is of assistance to you. Please do 
     not hesitate to contact me.
           Sincerely,
                                                    Mickey Kantor.


Vote on Motion to Table committee amendment beginning on page 1, line 3

  Mr. MURKOWSKI. Mr. President, the hour of 2:30 has come, and I would 
move to table the first committee amendment and ask for the yeas and 
nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the motion to 
table. The yeas and nays have been ordered. The clerk will call the 
roll.
  The legislative clerk called the roll.
  Mr. LOTT. I announce that the Senator from North Carolina [Mr. 
Faircloth], the Senator from Texas [Mr. Gramm], the Senator from Texas 
[Mrs. Hutchison], the Senator from Oklahoma [Mr. Inhofe], the Senator 
from Vermont [Mr. Jeffords], and the Senator from Pennsylvania [Mr. 
Specter] are necessarily absent.
  Mr. FORD. I announce that the Senator from Montana [Mr. Baucus], the 
Senator from New Jersey [Mr. Bradley], the Senator from Nebraska [Mr. 
Exon], the Senator from Massachusetts [Mr. Kerry], the Senator from New 
Jersey [Mr. Lautenberg], the Senator from Illinois [Ms. Moseley-Braun], 
the Senator from Georgia [Mr. Nunn], and the Senator from Minnesota 
[Mr. Wellstone] are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Minnesota [Mr. Wellstone] would vote ``yea.''
  The PRESIDING OFFICER (Mr. Kyl). Are there any other Senators in the 
Chamber who desire to vote?
  The result was announced--yeas 80, nays 6, as follows:

                      [Rollcall Vote No. 167 Leg.]

                                YEAS--80

     Abraham
     Akaka
     Ashcroft
     Bennett
     Bingaman
     Bond
     Breaux
     Brown
     Bryan
     Bumpers
     Burns
     Campbell
     Chafee
     Coats
     Cochran
     Cohen
     Conrad
     Coverdell
     Craig
     Daschle
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Feinstein
     Ford
     Frist
     Glenn
     Gorton
     Graham
     Grams
     Grassley
     Gregg
     Harkin
     Hatch
     Hatfield
     Heflin
     Helms
     Hollings
     Inouye
     Johnston
     Kassebaum
     Kempthorne
     Kennedy
     Kerrey
     Kohl
     Kyl
     Leahy
     Levin
     Lieberman
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Mikulski
     Moynihan
     Murkowski
     Nickles
     Packwood
     Pell
     Pressler
     Pryor
     Reid
     Robb
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Shelby
     Simon
     Simpson
     Smith
     Snowe
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--6

     Biden
     Boxer
     Byrd
     D'Amato
     Feingold
     Murray

                             NOT VOTING--14

     Baucus
     Bradley
     Exon
     Faircloth
     Gramm
     Hutchison
     Inhofe
     Jeffords
     Kerry
     Lautenberg
     Moseley-Braun
     Nunn
     Specter
     Wellstone
  So the motion to table the amendment was agreed to.
  Mr. MURKOWSKI. Mr. President, I move to reconsider the vote by which 
the motion was agreed to.
  Mr. BOND. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. MURKOWSKI addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. MURKOWSKI. Mr. President, what is the pending business?


                Committee Amendment on Page 17, Line 10

  The PRESIDING OFFICER. The question now before the Senate is the 
second committee amendment.
  Mr. MURKOWSKI. Mr. President, we have had an extended discussion on 
the matter of the sale of the Alaska Power Marketing Association, as 
well as the proposal to allow the export of surplus oil on the west 
coast of the United States.
  During the course of the day, the Senate came in at 9:30 a.m. and a 
proposal was to take up the bill. There was an objection to moving to 
the bill from my friend from the State of Washington. As a consequence, 
from approximately 9:30 a.m. until noon, the Senator from Washington 
had a quorum call in effect, and I had hoped that we could hear the 
particular position of the Senator from the State of Washington.
  Unfortunately, that was not the case. There was an agreement to move 
to the bill at 12 o'clock, and it is now 3 o'clock. The amendment that 
we just tabled is significant and I think was an expression of the 
attitude of the Senate towards this. Mr. President, furthermore, the 
majority leader tried to accommodate Members.
  Mr. President, in view of some of the changes----
  Mr. BOND. Will the Senator yield?
  Mr. MURKOWSKI. Yes.
  Mr. BOND. Mr. President, may I address a question to the manager and 
sponsor of this legislation? The Banking Committee's Subcommittee on 
International Finance has jurisdiction which looks remarkably as though 
it may be appropriate to this measure.
  While I am in general support of the position of my distinguished 
friend from Alaska, I would like to have an explanation for this body 
as to the jurisdiction and what he feels is the appropriate committee 
referral. Might I ask that question of the Senator from Alaska?
  Mr. MURKOWSKI. Mr. President, I will be happy to respond. It is my 
understanding the Senator from Missouri [[Page S6665]] is a 
subcommittee chairman of the Banking Committee. The question of 
jurisdiction has been addressed by him in the subcommittee context, and 
I wonder, for the Record, if he could give us some background with 
regard to the manner in which they have studied that.
  Is it not, indeed, the fact that that particular jurisdiction under 
the Banking Committee, as well as other prohibitions on the export of 
Alaska oil, such as the Mineral Leasing Act, the Export Administration 
Act, and others, were presented in such a way, once the proposal was 
made with the substantiation falling to include the sale of the two 
generating plants in Alaska, that the Chair ruled that it was 
appropriate that it be under the jurisdiction of the Energy and Natural 
Resources Committee, and it is my understanding that ruling of the 
Chair still stands.
  I ask the Chair if there is any reference to anything to the contrary 
to that?
  I am sorry; I guess the Chair was preoccupied. But the issue that we 
have before us is the jurisdiction potentially of the Banking 
Committee, and the Alaska oil export ban is not in the jurisdiction of 
the Senate Banking Committee because the Alaska oil export originated 
in the Trans-Alaska Pipeline Authorization Act, the bill that is 
strictly within the jurisdiction of the Energy Committee.
  The Energy Policy and Conservation Act, which is EPCA, includes a 
provision that generally restricts crude oil exports. This bill is also 
within the jurisdiction of the Energy Committee. The bill was 
introduced but did not reference the Export Administration Act.
  Furthermore, the Export Administration Act expired, so it no longer 
governs the export of Alaskan crude oil. And that is the understanding 
of the Senator from Alaska with regard to the jurisdiction of this 
matter before the Senate being referred to the Energy and Natural 
Resources Committee.
  Mr. BOND. Mr. President, let me thank the Senator from Alaska. We 
will have further discussions on that. I appreciate the discussion he 
has conducted and the ruling of the Chair. I think we are going to do 
some further investigation of that matter. At this point, I appreciate 
very much his stating his views. We will continue to review that and 
work at the staff level to assure there is no problem.
  Mrs. FEINSTEIN. Mr. President, I wonder if the Senator from Alaska 
will yield for a question.
  Mr. MURKOWSKI. The Senator is happy to yield for a question from the 
Senator from California.
  Mrs. FEINSTEIN. I want to commend the two Senators from Alaska for 
their work on this measure. I also want to thank them for seeking my 
support. Early on in the discussions, because of concerns, I took the 
time to discuss this with virtually all of the parties involved. In a 
meeting in my office in September of last year, one of those parties 
was British Petroleum. British Petroleum would be a major supplier or 
purveyor of Alaskan crude.
  One of the concerns that I had was that we not create jobs somewhere 
else and take jobs from our people, specifically the merchant marine. 
The two authors have been good enough to see to it that the legislation 
reflects that the oil must be transported on American-flag and 
American-crewed vessels and has secured that as a part of the 
legislation. There is another part to this, and that is American-built 
vessels. But because of a GATT problem, it is not possible to put this 
in the legislation.
  In September, I received a letter and I would like to quickly read 
this letter and ask the Senator directly the question. The letter is 
addressed to me and it says:

       Further to discussions with you held September 30, 1994, if 
     the ban on Alaska exports is lifted, BP will commit now and 
     in the future to use only U.S.-built, U.S.-flag, U.S.-crewed 
     ships for such exports. We will supplement or replace ships 
     required to transport Alaskan crude oil with the U.S.-built 
     ships as existing ships are phased out under the provisions 
     in the Oil Pollution Act of 1990.
       I hope that this commitment satisfies your request that 
     Alaska oil exports be carried on U.S.-built, U.S.-flag ships, 
     manned by U.S. crews.
           Yours, sincerely,

                                                  Steven Benz,

                                                        President,
                                     BP Oil Shipping Company, USA.

  My question to the Senator from Alaska is: Is this agreement still in 
effect?
  Mr. MURKOWSKI. In response to the Senator from California, it is my 
understanding, Mr. President, that indeed it is still in effect. I 
should point out, however, as I know the Senator from California is 
aware, British Petroleum, being a foreign corporation, cannot own U.S.-
flag, U.S.-documented vessels. So British Petroleum contracts with 
private U.S. owners that own the U.S. vessels. It is my understanding 
that since they basically--in the sense of having a long-term charter 
agreement--have dictated this position that they will move BP's oil 
and, for that matter, all the other oil that would flow between Alaska 
and any other American port in a U.S.-flag vessel. But BP itself is 
precluded by our maritime laws from owning the vessel outright.
  Mrs. FEINSTEIN. I appreciate that, Mr. President. It is very 
important to me that this U.S.-flag and crewed and, to the extent we 
can, built ships be used. I take this commitment from BP, however they 
are going to do it, that the oil that they transport will be in U.S.-
flagged, crewed, and built vessels. I thank them for that.
  I ask unanimous consent to have this letter printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record as follows:

                                                 BP Oil, Inc.,

                                Cleveland, OH, September 30, 1994.
     Hon. Dianne Feinstein,
     U.S. Senate, Washington, DC.
       Dear Senator Feinstein: Further to discussions with you 
     held September 30, 1994, if the ban on Alaska exports is 
     lifted, BP will commit now and in the future to use only 
     U.S.-built, U.S.-flag, U.S.-crewed ships for such exports. We 
     will supplement or replace ships required to transport 
     Alaskan crude oil with U.S.-built ships as existing ships are 
     phased out under the provisions in the Oil Pollution Act of 
     1990.
       I hope that this commitment satisfies your request that 
     Alaska oil exports be carried on U.S.-built, U.S.-flag ships, 
     manned by U.S. crews.
           Yours sincerely,

                                                  Steven Benz,

                                        President, BP Oil Shipping
                                                         Co., USA.

  Mrs. FEINSTEIN. I would like to ask the Senator from Alaska another 
question. It is essentially about jobs. After looking at this very 
carefully and talking with independent oil producers and the Department 
of Energy, I believe that this legislation will, as the Senators from 
Alaska have stated on the floor earlier, be helpful in producing jobs 
in the State of California.
  The Department of Energy has some very generous estimates in their 
report. I am not sure I believe the totality of this, but suffice it to 
say that they predict 5,000 to 15,000 new jobs very quickly and as many 
as 10,000 to 25,000 jobs by the decade end, most of which they identify 
as taking place in Kern County, CA.
  I ask the Senator from Alaska if he concurs with this energy 
observation and would he agree that this would be job-producing for the 
State of California?
  Mr. MURKOWSKI. Mr. President, in reply to the Senator, it is my 
understanding that the Department of Energy has done an exhaustive 
analysis and agrees that significant job creation would be initiated 
primarily as a consequence of small, independent stripper producers 
that currently are having a difficult time maintaining production 
because of the excess oil on the west coast that would be removed if 
indeed this legislation becomes law, and that would stimulate 
production, investment and, of course, initiate numerous new jobs. And 
the proximity of that oil to the California refiners is such that it 
would reduce transportation costs as opposed to bringing the oil down--
I am not suggesting that California production would increase to the 
point where it would replace Alaska oil, but it would stimulate that 
margin of production and cannot compete with the excess oil that is on 
the west coast today.
  I am very pleased that my friend from California recognizes that the 
mix of utilization of oil in the California refineries is both Alaskan 
as well as Californian, as well as some imported oil. But there is no 
question about the merits of the job creation and margin and operations 
coming back on line. I think that is why this legislation was so 
unanimously supported by the California independent [[Page S6666]] oil 
producers, who have worked very hard on this legislation.
  Mrs. FEINSTEIN. I thank the Senator. I have one last question, and I 
would like to place a statement in the Record. One of the refineries is 
located right in my area and, of course, that is Tosco in the San 
Francisco Bay area. Among the parties that I discussed this with, Tosco 
was one of them. It is clear that they had some reservations about the 
legislation. I did discuss this with the Senator from Alaska, and I 
know he mentioned this earlier on the floor. I would like him, if he 
would, to repeat it. It is my understanding that Tosco has been assured 
reasonable supplies of oil even with this agreement in place. I would 
very much welcome the Senator's response to this in the affirmative or 
negative, whichever it may be.
  Mr. MURKOWSKI. Mr. President, responding to my colleague from 
California, with regard to Tosco, I am referring to the 1993 PADD IV 
refinery slate, which is the latest one I have indicating the origin of 
oil from the Tosco refinery at Martinez, CA, which is, I think, the 
question posed by the Senator from California.
  The capacity of that refinery is 148,000 barrels a day. That 148,000 
comes from the following origins: 56,000 barrels a day comes down from 
my State of Alaska; 75,000 barrels a day of that refinery's capacity 
comes from California, that is produced locally in California; 18,000 
barrels a day of that refinery's utilization is imported oil.
  So a little more, 75,000 California, 56,000 from Alaska, 18,000 are 
imported, and there is another Tosco refinery, Ferndale, which is, I 
think, of interest to the Senator from Washington. The Ferndale 
refinery capacity is about 89,000, currently operating at 71,000; 
64,000 come down from Alaska, 7,000 are imported--none comes from 
California, which I am sure is not a surprise.
  The point of the question of my friends from California, Washington 
and California, are certainly the natural markets for ANS crude. 
Washington and California ports are closest to Alaska as the origin of 
crude oil, and the ANS will continue to supply those refineries simply 
because of the proximity and the lower transportation costs.
  Mrs. FEINSTEIN. I thank the Senator.
  It is also my understanding, Senator, that this bill specifies that 
the President shall determine on an annual basis whether independent 
refiners in the Western United States are able to secure adequate 
supplies of crude, and if not, he can so indicate and make further 
recommendations to the Congress; is this not correct?
  Mr. MURKOWSKI. The Senator from California is absolutely correct. 
That is in the bill.
  Mrs. FEINSTEIN. I thank the Senator. I yield the floor.
  Mr. MURKOWSKI. Mr. President, what is the pending business?
  The PRESIDING OFFICER. The pending business is the second committee 
amendment.
  Mr. MURKOWSKI. Mr. President, I ask unanimous consent to adopt the 
pending amendment.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The committee amendment on page 13, line 10 was agreed to.


                           Amendment No. 1078

  Mr. MURKOWSKI. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Alaska [Mr. Murkowski], proposes an 
     amendment numbered 1078.

   Mr. MURKOWSKI. Mr. President, I ask unanimous consent further 
reading be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       Strike the text of title II and insert the following text:

                                TITLE II

     SEC. 201. SHORT TITLE.

       This Title may be cited as ``Trans-Alaska Pipeline 
     Amendment Act of 1995''.

     SEC. 202. TAPS ACT AMENDMENTS.

       Section 203 of the Act entitled the ``Trans-Alaska Pipeline 
     Authorization Act,'' as amended (43 U.S.C. 1652), is amended 
     by inserting the following new subsection (f):
       (f) Exports of Alaskan North Slope Oil.--
       (1) Subject to paragraphs (2) through (6), of this 
     subsection and notwithstanding any other provision of law 
     (including any regulation), any oil transported by pipeline 
     over right-of-way granted pursuant to this section may be 
     exported after October 31, 1995 unless the President finds 
     that exportation of this oil is not in the national interest. 
     In evaluating whether the proposed exportation is in the 
     national interest, the President--
       (A) shall determine whether the proposed exportation would 
     diminish the total quantity or quality of petroleum available 
     to the United States; and
       (B) shall conduct and complete an appropriate environmental 
     review of the proposed exportation, including consideration 
     of appropriate measures to mitigate any potential adverse 
     effect on the environment, within four months after the date 
     of enactment of this subsection.

     The President shall make his national interest determination 
     within five months after the date of enactment of this 
     subsection or 30 days after completion of the environmental 
     review, whichever is earlier. The President may make his 
     determination subject to such terms and conditions (other 
     than a volume limitation) as are necessary or appropriate to 
     ensure that the exportation is consistent with the national 
     interest.
       (2) Except in the case of oil exported to a country 
     pursuant to a bilateral international oil supply agreement 
     entered into by the United States with the country before 
     June 25, 1979, or to a country pursuant to the International 
     Emergency Oil Sharing Plan of the International Energy 
     Agency, any oil transported by pipeline over right-of-way 
     granted pursuant to this section, shall, when exported, be 
     transported by a vessel documented under the laws of the 
     United States and owned by a citizen of the United States (as 
     determined in accordance with section 2 of the Shipping Act, 
     1916 (46 U.S.C. App. 802)).
       (3) Nothing in this subsection shall restrict the authority 
     of the President under the Constitution, the International 
     Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), or 
     the National Emergencies Act (50 U.S.C. 1601 et seq.) to 
     prohibit exportation of the oil.
       (4) The Secretary of Commerce shall issue any rules 
     necessary for implementation of the President's national 
     interest determination within 30 days of the date of such 
     determination by the President. The Secretary of Commerce 
     shall consult with the Secretary of Energy in administering 
     the provisions of this subsection.
       (5) If the Secretary of Commerce finds that anticompetitive 
     activity by a person exporting crude oil under authority of 
     this subsection has caused sustained material crude oil 
     supply shortages or sustained crude oil prices significantly 
     above world market levels and further finds that these supply 
     shortages or price increases have caused sustained material 
     adverse employment effects in the United States, the 
     Secretary of Commerce may recommend to the President 
     appropriate action against such person, which may include 
     modification of the authorization to export crude oil.
       (6) Administrative action with respect to an authorization 
     under this subsection is not subject to sections 551 and 553 
     through 559 of title 5, United States Code.

     SEC. 203. ANNUAL REPORT.

       Section 103(f) of the Energy Policy and Conservation Act 
     (42 U.S.C. 6212(f)) is amended by adding at the end thereof 
     the following:
       ``in the first quarter report for each new calendar year, 
     the President shall indicate whether independent refiners in 
     Petroleum Administration for Defense District V have been 
     unable to secure adequate supplies of crude oil as a result 
     of exports of Alaskan North Slope crude oil in the prior 
     calendar year and shall make such recommendations to the 
     Congress as may be appropriate.''.

     SEC. 204. GAO REPORT.

       The Comptroller General of the United States shall conduct 
     a review of energy production in California and Alaska and 
     the effects of Alaskan North Slope crude oil exports, if any, 
     on consumers, independent refiners, and shipbuilding and ship 
     repair yards on the West Coast. The Comptroller General shall 
     commence this review four years after the date of enactment 
     of this Act and, within one year after commencing the review, 
     shall provide a report to the Committee on Energy and Natural 
     Resources in the Senate and the Committee on Resources in the 
     House of Representatives. The report shall contain a 
     statement of the principal findings of the review and such 
     recommendations for consideration by the Congress as may be 
     appropriate.

     SEC. 205. EFFECTIVE DATE.

       This Title and the amendments made by it shall take effect 
     on the date of enactment.

  Mr. MURKOWSKI. Mr. President, this is an act entitled Trans-Alaska 
Pipeline Authorization Act, as amended (43 U.S.C. 1652), is amended 
with the new subsection, ``Exports of Alaskan North Slope Oil.''
  I believe the Chair has the amendment.
  What we have attempted to do here by this amendment, as reported by 
the committee, S. 395 would immediately authorize ANS exports carried 
in U.S.-flagged vessels.
  When the administration testified in support of lifting the Alaska 
North [[Page S6667]] Slope crude oil export ban, they indicated the 
bill should be amended, one, to provide appropriate environmental 
review; and second, to allow the Secretary of Commerce to recommend 
action against anticompetitive behavior by exporters, and to establish 
a licensing system.
  Mr. President, if no one seeks recognition, I propose the question be 
put to the floor.
  Mrs. BOXER. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. Is there an objection?
  Mr. MURKOWSKI. I do not believe a quorum call is in order.
  Mrs. BOXER. Mr. President, I asked for a quorum call.
  Mr. SARBANES addressed the chair.
  The PRESIDING OFFICER. The Senator from Alaska had the floor.
  The PRESIDING OFFICER. Is there objection?
  Mrs. BOXER. Reserving the right to object, will the Presiding Officer 
please tell me what the pending business is.
  The PRESIDING OFFICER. The pending business is the amendment offered 
by the Senator from Alaska.
  Mr. MURKOWSKI. I call for the question.
  The PRESIDING OFFICER. The question is on the amendment.
  Mrs. BOXER. Mr. President, I cannot hear the Senator from Alaska.
  Mr. MURKOWSKI. The Senator from Alaska calls for the question.
  Mr. SARBANES addressed the chair.
  The PRESIDING OFFICER. The Senator from Alaska has the floor.
  Mr. SARBANES. Mr. President, what is the parliamentary situation?
  The PRESIDING OFFICER. The parliamentary situation is the amendment 
of the Senator from Alaska is on the floor.
  Mr. SARBANES. Pending?
  The PRESIDING OFFICER. It is pending and open for debate.
  Mr. MURKOWSKI. Mr. President, I would like to try to reach a 
conclusion, as I know my colleagues would, relative to this matter. We 
have had an opportunity coming in at 9:30 this morning whereby we were 
in a quorum call until 12 noon, and the Senator from Washington had 
asked that we be placed in that quorum until such time and she was 
graciously kind to advise me that we could go on the bill at 12 noon.
  Since the quorum call was placed by the Senator from Washington, I 
anticipated she would have an opportunity to speak at that time on the 
merits of the bill or the motion to proceed. I did not attempt to call 
off the quorum and she did not choose to speak.
  In all fairness, since that time I have held the floor, along with my 
senior Senator, Senator Stevens. In order to try and resolve this, I 
had hoped we could get a vote on the question--get the vote today and 
resolve this matter. It is of great interest to my State, and I know it 
is of great interest to the State of Alaska, to my colleague, Senator 
Johnston, as well as Senator Stevens, because we anticipate attaching 
as part of this Senator Johnston's interest in deep water drilling.
  Last week, the majority tried to accommodate Members by offering to 
bring this bill up at 1 p.m. today, but it is my understanding, and I 
would be happy to be corrected, that there was an objection from the 
Senator from Washington. So we had to come in at 9:30 a.m. to work out 
a motion to proceed.
  As I indicated initially, the Senator from Washington would not allow 
any agreement on getting to the bill. Then the Senator from Washington 
agreed to letting the bill come up at 12 noon. Then again at noon, 
unfortunately, the Senator from Washington objected to the first 
committee amendment being adopted. The Senator also let it be known 
that if we put in a quorum call she would object to dispensing with it, 
and as a consequence, she did.
 And that, I believe, was when Senator Grams wished to make a statement 
as if in morning business.

  We were then forced to hold the floor--I was somewhat reluctant, and 
I am sure somewhat repetitious in doing so--so we could get a vote at 
2:30. Now we still have objections and it is my understanding now that 
the objection has been dropped on the second committee amendment.
  I would like to--perhaps we would find it expedient--without losing 
my right to the floor, to ask the Chair whether the Senator from 
Washington would inform the Senate what her intentions might be on the 
legislation that is pending? Specifically, I ask, does the Senator plan 
to offer any amendments? If so, could she inform us what those 
amendments might be so we can review them?
  Mrs. MURRAY. Mr. President, I will be happy to respond to the 
questions of the Senator from Alaska. I did come to the floor this 
morning at 9:30 and did object to the motion to proceed. We then did 
work out an agreement that the bill would begin to be debated at noon.
  At that time, I was here on the floor and ready to debate and was not 
able to say anything until the 2:30 rollcall vote. Since that time, 
obviously, there has been an exchange among several Senators.
  I do have a statement I want to make. I do have a great deal of 
information I want to submit for the Record, and I want to be able to 
bring my side out on this argument. I know there are a number of other 
Senators who also wish to present their points of view on this. The 
Senator from California, Senator Boxer, does, and I know the Senator 
from Oregon, Senator Hatfield, has a statement. Several other Senators 
have indicated to me that they would like the opportunity to debate 
this bill.
  I also have been told there are a number of amendments that people 
wish to bring forward on this bill.
  Mr. MURKOWSKI. If I may respond? I am quite aware there are at least 
two Senators who are on the floor now. I am most willing and anxious to 
hear from them, as well as to hear from the Senator from Washington.
  So the Senator is not indicating one way or another whether there are 
amendments which she may be offering that we could review during the 
time under which she and others may speak.
  I wondered if she has amendments, if the Senator from Washington has 
amendments?
  Mr. FORD. Mr. President, point of information.
  Mr. MURKOWSKI. Sure.
  Mr. FORD. Parliamentary inquiry?
  The PRESIDING OFFICER. Does the Senator from Alaska yield for that 
purpose?
  Mr. MURKOWSKI. I am happy to yield without losing my right to the 
floor.
  Mr. FORD. Does the Senator from Washington retain her own right to 
make her own statement and to offer all amendments without trying to 
reveal that in advance, and not being able to get the floor?
  Mr. MURKOWSKI. If I may respond?
  Mr. FORD. I asked the Chair a question.
  The PRESIDING OFFICER. Senators may make any statement when they have 
the floor.
  Mr. FORD. So it is not a requirement, then, that she reveal what 
amendments she would like to have entered? She may have a dozen and 
reduce it to six?
  The PRESIDING OFFICER. A Senator may make any statements when that 
Senator has the floor.
  Mr. MURKOWSKI. I thank my friend from Kentucky. My purpose in making 
the inquiry was simply to try to determine whether the Senator from 
Washington would require the Senator to invoke cloture on the measure.
  Mr. FORD. That is your prerogative. That is your prerogative.
  Mr. MURKOWSKI. Does the Senator care to indicate that? It would be 
appreciated, simply from the standpoint of expediting the process.
  If not, that is certainly the right of the Senator from Washington.
  Mrs. MURRAY. Is the Senator from Alaska asking me that question?
  The PRESIDING OFFICER. Does the Senator from Alaska yield to the 
Senator from Washington?
  Mr. MURKOWSKI. No. I respectfully ask my friend from Washington if it 
is anticipated that the Senator from Washington would require the 
Senate to invoke cloture on this measure. Might that be her intention?
  Mrs. MURRAY. Let me just respond. Again, I was here at 9:30 this 
morning to object to proceeding to the bill because of the 
jurisdictional questions I had about whether the bill should have gone 
to Banking, which I sit on, which does oversee the Export 
Administration Act. It did not go through that committee, and that is 
why I voiced those objections. [[Page S6668]] 
  I then later agreed to go at noon. But I have not had an opportunity 
to speak to the bill. I intend to do that. I know other Senators do.
  I also know there are amendments out there. I cannot give a specific 
number, or any time, and it will be up to the Senator from Alaska what 
he determines to do in terms of cloture.
  Mr. MURKOWSKI. Evidently, it is understood--I certainly anticipated 
the Senator from Washington, inasmuch as she initiated the quorum call 
this morning, I assumed she would speak during that time until noon. 
But that is her right and I respect that right.
  I look forward to hearing her statement and that of my other 
colleagues at this time.
  The PRESIDING OFFICER. Does the Senator yield the floor?
  Mr. MURKOWSKI. The Senator yields the floor.
  The PRESIDING OFFICER. The Senator from Washington.
  Mrs. MURRAY. Mr. President, I thank my colleagues. I do know Senator 
Hatfield from Oregon is going to return to the floor and wants to make 
a statement, and I will speak until he does get here.
  Mr. President, I do rise today to oppose S. 395, which is a bill 
that, in part, allows the export of Alaskan North Slope crude oil. This 
issue, at first glance, may appear very simple. Lifting the ban on 
North Slope oil exports would increase sales and enhance revenues for 
many Alaskans. However, that additional income for a few of our 
citizens must be weighed against the concerns of the rest of the 
Nation.
  Job loss, price increases, dependence on foreign oil, and increased 
environmental risks are all issues that Congress must review--must 
review--before placing the needs of one State above the concerns of 
many.
  When Congress agreed to develop Alaska's North Slope--ANS--crude oil 
resources 20 years ago, it prohibited exports of this oil unless the 
President and Congress find that exports serve national economic and 
energy security, and other interests. Those conditions were a direct 
response to the economic chaos and long gas lines created by the Arab 
oil embargoes of the 1970's.
  Since then, our reliance on foreign oil has not diminished. The 
arguments for retaining the restrictions remain strong. Over the years, 
Alaska North Slope crude oil has fueled the west coast. Mr. President, 
90 percent--90 percent--of Washington State's crude oil comes from the 
North Slope, and our refineries are operating at 90 percent capacity. 
The existence of export restrictions has created an extensive 
transportation, refining, and shipyard infrastructure in our region.
  The North Slope has given us a reliable oil supply, carried aboard 
U.S.-flag vessels. Ships employ Washingtonians in crew and support 
positions, as well as in ports and ship repair yards.
  Today, this secure supply of oil faces a very serious threat. The 
State of Alaska and British Petroleum, the principal producer of ANS 
crude, are mounting a major effort to permit ANS exports. They want to 
remove the statutory restrictions. Removal of these restrictions will 
enrich both the State of Alaska's coffers and BP's pockets. But it 
would seriously hurt consumers, jobs, and the environment in this 
region.
  The tankers that transport Alaska oil are repaired on the west coast. 
If export restrictions are lifted, this work will go overseas. We could 
lose 5,000 jobs within our own region, and $160 million in annual 
employment income. This is more than half of the marine industry's 
total west coast employment.
  For shipyards, Alaska's crude oil exports would result in the loss of 
$270 million a year. More than 2,000 jobs at refineries in my State 
would be lost.
  In addition, the Pacific Northwest would forego most of the $93 
million in annual Federal, State, and local tax payments made by these 
works and facilities. Mr. President, 90 percent of Alaskan oil is 
consumed by west coast refineries owned by Atlantic Richfield, Texaco, 
and Shell, plus independents such as Tosco and U.S. Oil.
  Six of these refineries are in my home State of Washington. Competing 
against foreign buyers willing to pay premium prices, industry experts 
predict our refineries either will shut down or be forced to pay a 
premium price to keep their Alaskan supply, or to purchase substitute 
foreign crude.
  Major oil companies may be able to absorb much of the price increase. 
But the independents, that own 25 percent of the processing capacity in 
the Pacific Northwest, will not. They cannot compete with the majors by 
selling their petroleum products at higher prices. As many as 2,500 
people could lose their jobs along with the losses of $100 million
 in annual payroll income and $500 million in annual tax payments.

  My concern for our environment makes the case for export restrictions 
even more compelling. Congress opened Alaska's North Slope for 
development only after it imposed strict conditions to protect that 
region's fragile environment. Moreover, Washington State and other west 
coast States also enacted laws and regulations to assure the 
transportation and processing of this oil is done in a manner that will 
not injure our environment.
  With 99 percent of Alaska crude coming through Puget Sound and 94 
percent of this carried on U.S. tankers, foreign replacement oil would 
not only be more costly but would be carried on more environmentally 
risky tankers. The U.S. Coast Guard rates as high-risk one-half of the 
current foreign tanker fleet that carries crude through Puget Sound.
  Our coastal waters would face an added threat: Increased pollution 
risks from offshore transfers of crude oil from large foreign tankers 
to smaller ships that can actually deliver the oil to our six 
refineries.
  Exporting ANS crude on less expensive foreign vessels would lower 
transportation costs for British Petroleum and raise their profits. It 
would also raise revenue for the State of Alaska because the State's 
ANS royalty payment is based on the wellhead price, minus 
transportation costs. BP would also save money by having its tankers 
built and repaired in foreign countries. In short, North Slope's oil 
exports would benefit British Petroleum and increase the Treasury of 
the State of Alaska, but they are clearly not in the interest of the 
people I represent.
  Moreover, I do not believe exports would meet the statutory tests 
designed to protect broader national interests. When I weigh the 
benefits to Alaska and BP against these very serious risks, exports 
make little sense to me. For the sake of our workers and their 
families, our environment and our energy security, I urge my colleagues 
to listen and oppose this bill and any other efforts to lift the export 
restrictions.
  Mr. President, I want to read into the Record some of the editorials 
that have been written in the last several months regarding this bill 
and the lifting of the Alaska oil ban. The first one comes in the 
Seattle Times, and it is dated March 3 of this year, 1995.
                          Keep Alaska Oil Ban

       The export ban on Alaskan crude oil has served this country 
     well as a domestic source of valuable petroleum. Contrary to 
     the Clinton administration's desires, this is not the time to 
     overturn the ban, nor the time to imply that over-dependence 
     on foreign oil supplies is over.
       Oil from the North Slope of Alaska was drilled, pumped and 
     shipped south as part of a massive enterprise intended to tap 
     into a huge domestic reserve. The 800-mile Alyeska pipeline 
     delivers oil to the port of Valdez, Alaska, but it came at 
     enormous cost and large environmental and cultural questions. 
     The most immediate beneficiaries are the residents of Alaska, 
     who receive yearly Permanent Fund checks for the treasure 
     they are sharing with the rest of the country.
       Alaska's representatives are all in favor of ending the 
     ban--probably because higher prices could give their state 
     $1.6 billion more in royalties in just four more years. But 
     while Alaskans rightly share in the profits from oil, those 
     North Slope holes have since the beginning been considered a 
     national resource.
       Although nothing in the Alaskan oil equation has changed, 
     the political requirements of Southern California have 
     apparently been heard in the Clinton White House.
       California refineries are full of Alaskan oil; exporting 
     the oil to its likely buyer, Japan, would stimulate 
     California's own oil fields. Although Department of Energy 
     officials testified motorists would see very little price 
     change at the pump, the very premise of stimulating one 
     region's fields by exporting oil from another region has 
     inherent price risks.
       There is something smelly about a plan that sends Alaskan 
     oil abroad when the resource should be carefully used at 
     home. The only reason the U.S. imports foreign oil is to meet 
     domestic consumption. Depleting our own resources because 
     some refineries have too much oil goes against the original 
     argument for opening the fields. [[Page S6669]] 
       Shipping Alaska's oil abroad carries a new set of 
     environmental questions for the Pacific Northwest as new 
     maritime routes would be opened. That's not the most serious 
     question about dropping the oil ban, but simply another in 
     the long list of unnecessary actions that would result from a 
     misguided White House political strategy.

  In addition, the Portland Oregonian, on February 26, 1995, printed 
this editorial:

              [From the Portland Oregonian, Feb. 26, 1995]

 Keep Alaska's Oil Here--Lifting Ban on Oil Exports Would Raise Prices 
 Here, Hurt Port's Ship Business, Increase U.S. Dependency on Foreign 
                                  Oil

       Congress should sink a bill to remove the 21-year-old ban 
     on exporting Alaskan North Slope crude oil.
       Instead of lifting the ban, Congress should support 
     legislation introduced by Northwest Sons, Patty Murray, D-
     Wash., and Mark O. Hatfield, R-Ore., to extend the export 
     restrictions in the Export Administration Act.
       Removing the restrictions that limit the sale of Alaska's 
     oil to domestic markets is being promoted with wildly 
     optimistic promises. Proponents include BP America, Alaska's 
     largest oil producer, independent West Coast oil producers, 
     five maritime unions, the U.S. Department of Energy and the 
     states of Alaska and California.
       They say lifting the ban on Alaskan oil exports would 
     stimulate production of at least 100,000 barrels of oil per 
     day and create up to 25,000 jobs, primarily in Alaska and 
     California, while not causing an increase in the cost of 
     motor fuel prices on the West Coast.
       Those projections are very questionable. An Energy 
     Department study completed last summer suggested that lifting 
     the ban would create 11,000 to 16,000 jobs (not 25,000). That 
     study also ignored potential job losses in the West Coast 
     ship-supply industry. And it didn't address the potential 
     threat to the economic vitality of the nation's domestic 
     tanker fleet.
       Here's a more realistic appraisal of the likely outcome of 
     lifting the ban on exports of Alaskan oil:
       West coast gasoline prices would rise. The ban has 
     depressed West Coast crude oil prices by an estimated $2 a 
     barrel because Alaska oil is forced onto a surplus market 
     here.
       West Coast oil refiners have enjoyed the world's largest 
     gross margins because of the Alaskan crude's low price. If 
     that oil is withdrawn and exported, don't expect the refiners 
     to swallow their increased costs for
      replacement crude. They'll surely pass it on to motorists. 
     If the total cost were passed through, it could result in 
     a 7-cent-a-gallon increase at the pump.
       Ship repair and maintenance work at the Port of Portland 
     will all but disappear. Proponents of lifting the oil-export 
     ban say it would stimulate shipyard work on the West Coast. 
     Not so, say Port of Portland officials. They say their 
     contractors believe the lifting the ban would kill the 
     shipyard business. Alaska tankers account for about 70 
     percent of the work now, but Port of Portland officials 
     believe that tanker operators would do most of their 
     maintenance work in Japan and Korea once the ban was lifted.
       U.S. dependency on foreign oil would increase markedly, 
     because replacement of much of the Alaskan North Slope crude 
     oil would come from overseas producers.
       This comes at a time when U.S. dependency on foreign 
     sources of oil is at an all-time high. About half of the U.S. 
     daily consumption of 17.7 million barrels of oil comes from 
     foreign sources. That's substantially greater dependency than 
     this nation endured before the 1973 oil embargo or during the 
     Persian Gulf War. And government officials predict that 
     imports will represent 59 percent of consumption by 2010.
        Lifting the ban on exporting Alaskan crude would add to 
     this dependency and make the nation even more vulnerable to 
     international disruptions.
       The gain in maritime jobs is not worth the cost to this 
     nation's security and the adverse effect that foreign-oil 
     dependency has had on foreign policy.
       Hatfield and Murray need other Northwest members of 
     Congress to rally behind their leadership on Alaskan oil 
     policy.

  Finally, I will read an editorial from The Bellingham Herald called: 
``Our View.''

              [From the Bellingham Herald, Mar. 19, 1995]

              Our View--Don't Export North Slope Crude Oil

       Energy: Using the domestic oil ourselves reduces dependency 
     on foreign supplies, protects jobs.
       U.S. Sen. Frank Murkowski, R-Alaska, has introduced a bill 
     to lift the export ban on crude oil from Alaska's North Slope 
     oil fields, Sen. Patty Murray, D-Wash, has introduced a rival 
     bill that would continue the ban.
       Murray's bill better protects the best interests, not only 
     of Whatcom County and other regions on the Pacific Northwest 
     where North Slope oil creates thousands of jobs, but of the 
     nation.
       It makes little sense to propose exporting more domestic 
     oil when we already depend so heavily on imported oil to meet 
     needs and demands at home.
       Murkowski maintains that lifting the ban would net Alaska 
     an additional $700 million from increased oil sales and 
     create as many as 25,000 new jobs there by 2000.
       Murray claims that it would cost about 2,000 refinery and 
     ship-repair jobs in Washington, Oregon and California.
       Competing regional interests aside, Congress should look at 
     what's in the nation's best interest.
       If the export ban were lifted, foreign vessels could be 
     used to transport the crude oil to other nations. That might 
     pose additional environmental risks as well as eliminate 
     American jobs.
       Nations such as China are developing industrial and 
     technological-based economies and need more oil. The pressure 
     to cash in on supplying it is intense. Just last week, the 
     Clinton administration had to pressure Conoco to abandon a 
     plan to help Iran develop two large offshore oil fields.
       Best that we stay focused on what's in our nation's best 
     interest regarding North Slope crude oil and use it 
     ourselves.

  Mr. President, I think all three of those editorials very clearly 
point out that it is in the Nation's best interests to defeat the 
proposal that is before the Senate now. It is in the Nation's best 
interest to do so.
  I am going to respond to some of the points that were made by my 
colleague, Senator Murkowski, earlier particularly because he mentioned 
some with which I have to disagree.
  He mentioned that the unions support the bill as he has presented it.
  I would like to read for the Senate who opposes the bill the Senator 
from Alaska has presented to us:
  Communication Workers of America; Industrial Union Department, AFL-
CIO; Inland Boatmen's International Union; Longshoremen's and 
Warehousemen's Union, International; National Farmers 
Organization; National Farmers Union; Oil, Chemical and Atomic Workers; 
Steelworkers of America, United; Sailors' Union of the Pacific; United 
Auto Workers; Citizen Action; Consumer Energy Council of America; 
American Independent Refiners Association; Huntway Refining Co.; Indian 
Powerine LP; Kern Oil & Refining; Pacific Refining Co.; Tosco Refining 
Co.; U.S. Oil & Refining; Western Independent Refiners Association; 
WITCO Refining Corp.; Atlantic Marine; CBI Industries, Inc., Celeron 
Corp.; COSCOL Marine Co.; Pacific-Texas Pipeline Co.; Penn-Attransco.
  The list goes on opposing this bill: Avondale Industries; Dillingham 
Ship Repair; National Steel & Shipbuilding Co.; Northville Industries; 
Port of Astoria, OR; Port of Portland, OR; Shipbuilders Council of 
America.
  Mr. President, these are just a few of the people, including labor 
unions, who stand strong in opposition to lifting the ban on Alaskan 
oil. I think some of the unions that have written to me have very 
clearly defined why they oppose this bill. I again do this because I 
heard my colleague from Alaska say that unions support this 
legislation.
  Let me read one from the International Association of Machinists and 
Aerospace Workers written to Mr. Robert Georgine, president of AFL-CIO.

       Dear Mr. Georgine: I understand that an amendment may be 
     offered * * * to the maritime reform bill that would 
     eliminate restrictions on the export of Alaska oil. We are 
     told Senator Stevens is planning to offer the change when the 
     Senate Commerce Committee takes up the measure.
       Our organization strongly opposes this amendment. Exporting 
     Alaska crude oil across the Pacific would place 500 to 800 
     jobs at the Portland Ship Yard at extreme risk because the 
     ships used to export the oil would be repaired in foreign 
     ship yards, rather than here at home as they are today. The 
     jobs of more local subcontractors also would be threatened as 
     well as several thousand refinery jobs on the West Coast.
       The proponents of exporting Alaskan oil are the State of 
     Alaska, which stands to gain increased severance tax revenues 
     from these exports, and British Petroleum, the major producer 
     of Alaskan North Slope oil. The losers in this proposal are 
     U.S. workers, U.S. energy security, and U.S. business.
       As you know, the restrictions on the export of this oil 
     have enjoyed strong bipartisan support over the past 20 
     years. The last time an effort was made to remove the export 
     ban, the effort lost on a 70 to 20 vote.
       We strongly oppose this amendment and urge you to do 
     whatever you can to assure that it is not added to the 
     maritime reform bill.

  Mr. President, I have a number of letters from other unions: Sailors 
Union of the Pacific, Boydoco Oil & Atomic Workers, Metal Trade Union, 
and their message is one and the same, that union members stand 
strongly in opposition to the legislation that is in front of us.
  Another point that my colleague from Alaska made was that the 
Department of Energy study supported his language in this bill. I want 
all of my [[Page S6670]] colleagues to understand that the Department 
of Energy study addressed the concerns of Alaska and California.
  I, too, read that report in its entirety, and it does not address the 
issues that are important to Washington State, to Oregon, and indeed to 
the rest of the Nation. It is written in perspective as to what will be 
good for Alaska and California. I think it is very important to point 
out that the Clinton administration is not in support as was earlier 
indicated by my colleague from Alaska. The Clinton administration is 
not in support as the language stands in front of us right now. They 
believe that several important concerns need to be addressed, including 
job protection and environmental issues, before they are willing to 
endorse it, despite the DOE study. So I remind my colleagues this is 
not supported by the Clinton administration at this time. They have 
said that they have very serious concerns and are not supporting it as 
it is presently drafted.
  I also would like to point out the environmental concerns because I 
can speak for the jobs in my State, and certainly the Senator from 
Oregon, Senator Hatfield, will speak in terms of jobs from Portland. 
But the issue that has not been spoken to here is the issue of 
environmental concern.
  I heard my colleague from Alaska say earlier this morning that this 
bill in front of us is the first step in increasing domestic oil 
production. I fear, and I feel many of my colleagues fear, that the 
second step will be lifting the ban on oil drilling off the coast of 
Alaska, in the Arctic National Wildlife Refuge. ANWR has been a debate 
on this floor for many years. Allowing oil drilling there has been 
debated and defeated many times. Many of us fear that this is, as my 
colleague from Alaska said, the first step, and the second step will be 
drilling off the Arctic National Wildlife Refuge. And I know most of my 
colleagues do not want to see that occur. I think that is a real 
concern particularly since the budget that was passed out of the Budget 
Committee last week has an assumption in it that in order to get to the 
balanced budget one of the things we are going to do is allow oil 
drilling off Alaska. That is how we are going to balance the budget.
  So it is a very real concern. We do not need to pass the first step 
here in this legislation and pass the second step in the Budget 
Committee, and I will oppose that as adamantly as I oppose the bill in 
front of us.
  I do want to read to this body a letter from the Wilderness Society, 
Sierra Club, Friends of the Earth, Natural Resources Defense Council, 
Alaska Wilderness League, and the American Oceans Campaign, because I 
think it very clearly states for all of us what our environmental 
concerns should be.
  This was written last year, June 23, 1994.

       Dear Senator: The Senate will soon be asked to consider an 
     amendment to the Export Administration Act to end the ban on 
     the export of North Slope Alaskan crude oil. We urge you to 
     oppose lifting the export ban for the following environmental 
     reasons:
       Ending the oil export ban would increase development 
     pressure for sensitive areas like the Arctic National 
     Wildlife Refuge. It is also likely to increase pressure for 
     oil development in fragile areas off the shores of Alaska and 
     California. The expanded development pressure would result 
     from expanded markets, increases in the wellhead price of oil 
     per barrel, and faster depletion of North Slope fields. It is 
     a serious concern that lifting the ban could give nations 
     like Japan a vested interest in our natural resource 
     decisions in Alaska. As long as sensitive areas like the 
     Arctic Refuge and sensitive areas offshore California and 
     Alaska are still not permanently protected from oil and gas 
     development, lifting the export ban is a dangerous idea.
       Ending the ban is nonsense energy policy. It would be a 
     dramatic reversal of a national policy we thought Congress 
     had long ago resolved. Lifting the oil export ban is 
     inconsistent with any attempt at conservation of domestic oil 
     for domestic use.
       No environmental analysis has been done on ending the ban. 
     Lifting the ban would open the door to tankers nearly twice 
     as large. More traffic in Prince William Sound would pose 
     greater risks from spills. Changed tanker routes would make 
     Kodiak Island and the fisheries of the Bering Sea more 
     vulnerable to chronic and disastrous spills.
       Ending the oil export ban could increase the flow through 
     the aging and poorly-maintained Trans-Alaska Pipeline. A 
     major audit recently conducted by the Bureau of Land 
     Management said that the pipeline system poses imminent 
     threats to public and worker safety and the environment. 
     Until the government ensures that the more than 10,000 safety 
     problems with the pipeline are repaired, and that the ballast 
     water treatment and air pollution problems at the Valdez 
     marine terminal are resolved, the Congress should not take 
     actions that could increase the environmental and safety 
     risks.
       Lifting the oil export ban would increase oil imports into 
     the United States. Because refineries aren't set up to refine 
     the heavier oil produced in California, the Alaska shortfall 
     would be made up by imports which more closely match the 
     Alaska oil density. This means that more foreign-flagged 
     tankers, with less stringent manning standards than U.S. 
     flagged tankers, would be calling on West Coast ports. 
     Because increased imports would be necessary to replace the 
     oil that could now be exported to the Far East, our trade 
     balance would not improve and at the same time we would have 
     less control over our U.S. domestic oil supplies.
       Ending the oil export ban breaks the promise Congress made 
     to the American People over 20 years ago. At that time, 
     Congress sacrificed Arctic wilderness and put Prince William 
     Sound at risk of tanker spills, but said that the North Slope 
     oil was only to go to U.S. markets. In 1973, Vice President 
     Spiro Agnew went to the Senate floor to cast the tie-breaking 
     vote which ended the intense debate over approval of the 
     Trans-Alaska Pipeline. The oil export ban was a crucial part 
     of the deal Congress brokered. Congress chose to override 
     pending legal challenges to the pipeline, proclaiming the 
     environmental impact statement to be adequate even though the 
     major issue of risks to the marine environment from tankers 
     was poorly considered.
       If Congress breaks the deal now and lifts the oil export 
     ban, foreign oil companies like British Petroleum would reap 
     the largest benefits, and the American consumers would be the 
     biggest losers. It would be ironic for Congress to unravel 
     this deal at the same time as Alaskan jurors found Exxon 
     reckless and as 10,000 fishermen and Native residents finally 
     have their day in court.
       We urge you to oppose lifting the ban on exports of North 
     Slope crude oil.

  Again, that is signed by the Wilderness Society, National Resources 
Defense Council, Friends of the Earth, Sierra Club, Alaska Wilderness 
League, and American Oceans Campaign.
  I think this letter very clearly points out to all of us that this is 
a major step and can put a lot of us at risk and our environment at 
risk that many of us care about.
  It is not a step that should be taken willy-nilly on a Monday, when 
people are not prepared to think about the long-term, serious 
consequences. That is why I came to the floor this morning at 9:30 to 
protest moving to this bill, because it has not gone through the 
Banking Committee where the Export Administration Act has had 
jurisdiction over this for a long time.
  I do believe we have to look much more carefully at all of the 
conditions that are put forth in this and all of the consequences that 
many of us will have to suffer for a long time to come if the Senate, 
in its haste to get legislation passed, does so without considering the 
consequences to many of us.
  Mr. President, I would also like to read into the Record a statement 
by the Wilderness Society and the Alaska Wilderness League that I think 
points to what the environmental impacts of ending the ban on Alaska 
North Slope crude oil exports will cause.
  ``The Department of Energy's claims about environmental impacts are 
misleading,'' which refers back to the DOE study.

       DOE hastily included 2 pages of ``environmental 
     implications'' in its report on the economics of ending the 
     oil export ban which were not supported by any analysis or 
     factual substantiation. The Administration has failed to 
     carry out comprehensive environmental analysis required by 
     the National Environmental Policy Act.
       Ending the oil export ban would increase development 
     pressure for sensitive areas like the Arctic National 
     Wildlife Refuge. It is also likely to increase pressure for 
     oil development in fragile areas off the shores of Alaska and 
     California. If the 20-year export ban is lifted, its effects 
     will be long lasting. Expanded development pressure as 
     projected by DOE would result in faster depletion of domestic 
     oil resources. It is naive at best to believe that the oil 
     industry won't battle to gain access to these ``off-limits'' 
     areas when economic and political factors are right. As long 
     as these sensitive areas are still not permanently protected 
     from oil and gas development, lifting the export ban is a 
     dangerous idea.
       Environmental and safety problems plaguing the Trans-Alaska 
     Pipeline System (TAPS) should be fixed before considering 
     lifting the ban. It is true that the same old TAPS 
     infrastructure will continue to be used for exported oil, and 
     increased flow due to the new markets would increase the 
     risks. According to a major audit recently done for the 
     Bureau of Land Management, ``the pipeline system poses 
     imminent threats to public and worker safety and the 
     environment.'' More than 10,000 problems were identified, 
     [[Page S6671]] including ``massive violations of the National 
     Electrical Code.'' The ballast water treatment plant at the 
     Valdez terminal is currently inadequate to handle large 
     volumes of the ballast water which must be removed from cargo 
     tanks before they are filled with oil, and bigger tankers may 
     call at the port if the ban is lifted.
       The oil industry should not be rewarded with higher profits 
     from shipping North Slope oil at the same time it is 
     requesting exemptions from environmental laws. Alyeska, which 
     runs the pipeline for British Petroleum and the other oil 
     company owners, has for years avoided limiting air pollution 
     caused by fumes that are released during tanker loading and 
     recently requested a 12-year delay in meeting air pollution 
     standards for the nation's largest tanker terminal at Valdez. 
     Already, air emissions account annually for over 45,000 tons 
     of pollutants such as cancer-causing benzene, and the 
     terminal is the largest source of volatile organic compounds 
     in the nation.
       Exports will expose new areas of U.S. coastlines in Alaska 
     to increased risk of oil spills. Changed tanker routes would 
     put Kodiak Island, the Aleutian chain, and the rich fisheries 
     of the Bering Sea at greatly increased risk of chronic and 
     disastrous oil spills. Tankers would still travel through 
     Prince William Sound, placing it at high risk from new spills 
     even as this area still suffers from the effects of the Exxon 
     Valdez. Dumping of the segregated ballast water picked up 
     from foreign ports could introduce exotic organisms that have 
     serious environmental consequences. Lifting the ban would 
     open the door to tankers twice as large.
       Serious risks to California's coastal environment have been 
     ignored. Increased imports to California replacing North 
     Slope crude shipments would involve much larger foreign 
     tankers. Because of port and draft restrictions at the 
     refineries, there would be increased risks of oil spills 
     because there would need to be lightering, the transfer of 
     oil from the larger tankers to smaller vessels which bring it 
     into port, and therefore an increased number of times cargo 
     is offloaded. The lightering would be conducted by foreign 
     vessels which are less fully exposed to liability claims 
     under OPA-90 than U.S. companies. Increased refining of 
     California heavy crude would result in increased foreign 
     tanker traffic in California waters to export the byproducts 
     such as residual oil which would be produced in excess of 
     California demand.
       Lifting the ban will not help the U.S. meet its commitments 
     to reduce Greenhouse Gas emissions. DOE states thermal 
     enhanced oil recovery in California would increase such 
     emissions, but dismisses the amounts as trivial. However, DOE 
     energy policy should be to achieve further reductions, not to 
     justify increases, in order to fulfill U.S. obligations under 
     the U.N. Framework Convention on Climate Change and to 
     achieve President Clinton's goals in the Climate Action Plan 
     to reduce emissions to 1990 levels by the year 2000.

  Mr. President, these are just some of the environmental concerns that 
we have before us, but they seriously point out the questions that all 
of us should be asking and have answers to before this ban on oil is 
lifted from Alaska's North Slope.
  Certainly I heard my colleague from Alaska speak this morning about a 
DOE report and referred to it a number of times as what the basis 
should be that we vote on, the current amendment before us.
  As I indicated earlier, the administration is not supportive of the 
language as we currently see it before us on the floor because they do 
have concerns still about jobs and environmental impact. But I want to 
read to this body a letter from someone who agrees with me on the DOE 
report. He happens to be a former adviser to the Governor of Alaska. So 
he is from that region; he is a former adviser to the Governor.
  His name is Richard Fineberg, and he lives in Alaska. He says:

     Re Exporting Alaska North Slope Crude Oil.
       Dear Secretary O'Leary: I read with great interest and 
     disappointment your department's report, ``Exporting Alaska 
     North Slope Crude Oil.'' As a former advisor to the Governor 
     of Alaska on oil and gas issues who subsequently prepared 
     several reports for the Alaska State Legislature on North 
     Slope economic issues, I had hoped that your report would 
     answer many important questions about Alaskan oil 
     development. I was disappointed because the report's 
     conclusions appear to be critically dependent on buried, 
     dubious or false assumptions that undercut the validity of 
     the report's conclusions.

  Again, I remind the body I am reading from a letter of Richard 
Fineberg, who is former adviser to the Governor of Alaska. These are 
his words, not mine:

       . . . dubious or false assumptions that undercut the 
     validity of the report's conclusions. For example:
       The report asserts that Alaska would gain $700 million to 
     $1.6 billion in revenues between 1994 and 2000 if the ban 
     were lifted, and that under low-price scenarios most of that 
     gain would come in 1994-96. Having prepared numerous reports 
     on North Slope profits, production prospects and Alaska 
     revenues since leaving my position in the governor's office 
     in 1989, I must say that these poorly explained estimates 
     appear to be highly implausible. Moreover, 1994 is nearly 
     two-thirds over and if the ban were lifted, ANS sellers and 
     refiners would then require some time to revise contracts, 
     arrange shipments and reconfigure their refinery outputs. 
     With most of 1994 gone, how much of this theoretical amount 
     remains to be captured and how much is already lost to 
     history? I cannot make that calculation because I read the 
     report from cover to cover but could never discover the bases 
     for the $700 to $1.6 billion estimate.

  Again, this is someone who is an expert on Alaskan export of oil.
  He goes on to say:

       Although there is a known, fixed relationship between 
     federal income taxes and state revenues on ANS production at 
     the DOE study prices, the DOE report inexplicably estimates 
     federal gains to be well outside that predictable range, at 
     $99 to $188 million. This leads me to believe the DOE report 
     either omitted federal income taxes or did not account for 
     them correctly. In either event, it would appear that 
     producer gains (and, consequently, jobs) may have been over-
     stated because federal tax effects were not considered, and 
     that federal gains may have been understated. This is 
     precisely the kind of ambiguity that would lead a careful 
     reader to view with great skepticism the conclusions of the 
     DOE report.
       Regarding incremental North Slope production that might 
     result from lifting the ban, your authors note that ``If 
     exports of ANS crude oil raise crude oil prices or save on 
     costs of shipping and handling, the resulting revenues may be 
     invested in oil production-related projects in the 
     geographical areas where the new profits are made. This is 
     particularly true for small companies, but less so for the 
     major integrated companies.'' (Report, page E-1.) In a 
     footnote, the report states that ``The large ANS producers 
     made it clear in our interviews that they . . . would not 
     necessarily reinvest in Alaska the incremental revenues made 
     as a result of exporting ANS oil.'' The same section presents 
     increased production rates resulting from the ``reasonable'' 
     assumption ``that all incremental revenues for the remaining 
     producers' share is invested in ANS crude production 
     activities that add to reserves'' (major producers Arco and 
     Exxon--45% of ANS production--are
      factored out because their oil is transferred rather than 
     sold, leaving BP as the remaining major producer). Because 
     major producer BP owns 91% of the remaining production, by 
     its own terms the report's key assumption on reinvestment 
     is clearly not reasonable.
       The report notes that data ``imply that reserve additions 
     in the range of 200 to 400 million barrels could be produced 
     by the investment resulting from exports of . . . ANS crude. 
     Buy comparison, [c]urrent reserves at Endicott and Point 
     McIntyre, major secondary fields on the North Slope, are 262 
     and 356 million barrels respectively.'' (Report, at p. 12 and 
     p. 50). For some reason, the report makes no reference to the 
     largest major secondary field on the North Slope, Kuparuk, 
     whose remaining reserves are three times that of the two 
     fields named in the report. Is there a reason for this? The 
     report's second Kuparuk omission referred the reader again to 
     Appendix E--the same place at which the dubious assumptions 
     noted above are supposed to be demonstrated; nothing in that 
     appendix told me whether Kuparuk was included or excluded 
     from your analysis, or why it was omitted from the text.
       I am limiting myself here to clearly demonstrable examples 
     because time is short; some in your department seem to be 
     rushing toward a decision on BP's behalf. I write, therefore, 
     to make sure that you are aware that the DOE report released 
     June 30 appears to be laced with significant technical 
     defects. These shortcomings make it difficult for me to 
     accept the conclusions one must adopt to assume the economic 
     benefits your report claims the United States will realize 
     from lifting the ban. The reader is asked to believe that 
     California refinery acquisition costs can go up without 
     affecting consumer gasoline prices, and that ANS will realize 
     a premium in Japan because its product slate matches Japan's 
     needs. While I am not prepared to state that such heroic 
     assumptions are invalid, it is my opinion that this report 
     fails to demonstrate them. These assumptions are contradicted 
     by the Coalition to Keep Alaska Oil's June 1994 report, 
     ``Consequences of Exporting Alaska North Slope Crude Oil.'' I 
     do not presume to know who is correct. But I must tell you 
     that the latter report is strikingly accurate in those areas 
     with which I am familiar. More important, the challenging 
     report is much less dependent on the kind of Herculean and 
     undocumented assumptions required to reach the conclusions in 
     the DOE report.

  I will continue reading and remind my colleagues that I am reading 
from a letter directly about the DOE's study that has been referenced 
throughout speech of the Senator from Alaska and kept referring to it. 
I wanted someone who is an expert from Alaska to respond to that. I 
will read the last of this letter:

       The latter report also sets up the background of raising 
     environmental concerns [[Page S6672]] that are casually 
     dismissed by the DOE report: In particular, California supply 
     ports, pipelines, refinery storage facilities and refinery 
     operations appear to be at risk. And, as my colleague Dr. 
     Riki Ott of Cordova, Alaska, has previously advised you, the 
     DOE report also dismisses serious environmental concerns in 
     Alaska concerning the integrity of the Alaska pipeline and 
     marine transportation delivery system. As a long-time 
     Alaskan, I share Dr. Ott's interests in the environmental 
     issues the DOE report fails to address. But it is the 
     manifest shortcomings in the DOE economic analysis that lead 
     me to ask you to base your decision on better data than the 
     report you released June 30.
       In sum, I do not believe your department's report provides 
     sound bases for its fundamental conclusions and 
     recommendations. In view of the undiscussed problems 
     associated with lifting the export ban and the absence of 
     convincing support for taking this action, I oppose lifting 
     the ban at this time and request that you address the 
     implications of the DOE report's serious defects before 
     making your decision.

  It is signed Richard Fineberg.
  Again, I would like my colleagues to know that the arguments in favor 
of lifting the ban have referenced a report from DOE that I have just 
read a letter from, an expert from Alaska who says that a lot of the 
assumptions are incorrect. In addition, the Clinton administration 
itself does not support the language that is in front of us because it 
still does not address many of their environmental and job issues.
  I also heard my colleague from Alaska speak about the jobs that would 
be brought if this legislation is passed. I believe he referenced the 
number 25,000. From the perspective of the State of Washington, we have 
many people employed in our independent refineries. I know Senator 
Hatfield from Oregon will be out here in a few minutes to talk about 
jobs in his State of Oregon. But while he is on his way, I want to 
share with my colleagues an article called ``Alaskan Oil Exports Will 
Eliminate U.S. Shipyard Jobs.''
  There has been some question on whether or not jobs would be 
eliminated in the United States if this oil ban is lifted. I want to 
read this study to you by the Portland shipyard Port of Portland:

       The recommendation of the Department of Energy study on 
     Alaskan--to lift the twenty-year-old restriction on the 
     exports of that would a eliminate hundreds of shipyard jobs. 
     First, it will cause a severe reduction in the U.S. flag 
     tanker fleet. DOE--

  This refers back to the report.

     assumes that exported oil will be carried on Jones Act ships, 
     but Senators proposing that the ban be lifted would only 
     require that the oil be carried on U.S. flagships, not on 
     Jones Act ships. This means they need not be repaired in U.S. 
     yards. This means lost of jobs in our shipyards here in the 
     United States.

  Mr. President, I note the presence of my colleague, Senator Hatfield, 
on the floor. He is a cosponsor of legislation I introduced earlier. I 
will yield the floor at this time for him to make his remarks.
  Mr. HATFIELD. Mr. President, I thank my colleague from Washington 
State, Senator Murray.
  Mr. President, first of all, I want to say we have collaborated on 
this as between Washington State and Oregon, on the basis of the impact 
it has on the Northwest, outside of Alaska. I am happy to say, too, 
that we have been working with Senator Murkowski's staff and we are 
hoping that we can resolve the problem we have as it impacts upon the 
Port of Portland. I will address that at a later moment.
  First of all, I would like to distinguish between title I of this 
bill and title II. Title I of this bill provides for the sale of the 
Alaska Power Administration. I support the sale of the Alaska Power 
Administration, but I do have strong objections to provisions in this 
bill which seek to alter, in a fundamental way, a longstanding 
agreement relating to the Alaskan North Slope crude oil.
  Mr. President, for over 20 years, Congress has maintained a ban on 
the export of crude oil from the North Slope of Alaska transported via 
the Trans-Alaska Pipeline. This agreement, which is based primarily on 
national energy security, has given rise to many investments and 
business expectations. The legislation now before the Senate, sponsored 
by my good friend from Alaska, the distinguished chairman of the Energy 
and Natural Resources Committee, would lift this export limitation, 
thus allowing unlimited export of oil from Alaska.
  While I understand and respect the motives of the Senator from 
Alaska, I must oppose his efforts in this case. I believe it is 
indisputably in the national interest to maintain our precious 
remaining supplies of crude oil for domestic use only. To export our 
Alaska reserves, which account for a quarter of current U.S. 
consumption, at a time when our reliance on unstable supplies of 
foreign oil is again in excess of 50 percent, would be damaging to the 
already fragile energy security situation of the United States.
  Again, I want to emphasize that over 50 percent of our consumption is 
dependent upon foreign imports, and from a very fragile part of the 
world, geopolitically speaking--the Mideast.
  I have long supported the restricting of Alaska North Slope 
production for domestic use only. Beginning in 1979, I sponsored 
legislation in several sessions of Congress to extend these 
restrictions. Each time this issue has come before Congress, these 
restrictions have been extended with strong bipartisan support. In 
fact, each time Congress has strengthened the restrictions with respect 
to Alaska and has added similar restrictions to the export of oil 
produced in any part of the United States, including offshore oil and 
oil contained in the strategic petroleum reserve.
  I am also aware that sectors of the refining and maritime industries 
have made substantial investments based on the assurances of Congress 
that this ban would remain in effect. It would be manifestly unfair to 
upset these reasonable expectations at this stage.
  I should also point out, in order to complete the legislative 
picture, that Senate bill 414, which I have sponsored with Senator 
Murray, is currently pending before the Banking Committee. Our bill 
would extend the current export restrictions and is therefore directly 
contrary to the provisions in the bill presently before the Senate. The 
Senator from Alaska also has a bill, Senate bill 70, which would also 
lift the export restriction, and it is also pending before the Banking 
Committee. I am troubled that the Senator from New York, the 
distinguished chairman of the Banking Committee, is not present to 
express his views on these matters before his committee.
  In 1973, shortly after the beginning of the Arab-Israeli war and the 
first oil embargo, Congress adopted the Trans-Alaska Pipeline 
Authorization Act. And this legislation authorized a construction of a 
pipeline to move oil from lands belonging to the State of Alaska on the 
North Slope to a Port at Valdez. The act also amended the Mineral 
Leasing Act to put in place an export restriction on all oil carried 
over Federal rights-of-way. Under this provision, exports were only if 
the President determined exports would be in the national interest, 
would not diminish the total quantity or quality of oil in the United 
States and would be done under the licensing provisions of the Export 
Administration Act of 1969.
  A second major oil shock took place in 1979. At that time, in section 
7(d) of the Export Administration Act, Congress effectively banned oil 
exports from the Alaskan North Slope. Congress further tightened 
section 7(d) in 1985. No rollcall votes have taken place in the Senate 
since 1984, when this body tabled an amendment offered by my friend 
from Alaska, Mr. Murkowski, which would have allowed a limited amount 
of exports at 200,000 barrels per day on U.S. vessels, and the 
amendment was tabled on a vote of 70-20.
  Since the first Alaska oil export restrictions were enacted in 1973, 
they have provided enduring benefits for our Nation. I speak as someone 
who has been in the Senate since this ban was put in place and has 
watched it function. As a result of this policy, we now have an 
efficient transportation infrastructure to move crude oil from Alaska 
to the lower 48 States and Hawaii. In addition, these restrictions have 
helped limit our reliance on OPEC and unstable Persian Gulf oil 
supplies. They have also allowed us to enhance our domestic merchant 
marine that continues to help supply the essential oil requirements of 
our domestic economy and our military.
  I have also been in this body long enough to learn quite a few 
history lessons. And it troubles me that despite two major oil crises 
and the Persian Gulf war, we continue to senselessly rely on foreign 
oil as a major energy [[Page S6673]] source. U.S. oil imports now 
exceed half of our daily oil requirement. Government and private 
estimates now predict that by the year 2010, foreign oil imports will 
exceed 60 percent. I consider these levels to be worthy of serious 
concern. The Clinton administration appears to be aware of the gravity 
of the situation, but I have not been impressed with the 
administration's proposals designed to address this growing problem.
  It is my belief that permitting the export of any Alaskan North Slope 
crude would only exacerbate our already serious problem of reliance on 
foreign oil. By allowing the export of Alaskan oil to Japan and other 
Pacific rim countries, we would further increase our dependency on 
Middle Eastern oil, something I strongly believe--and history supports 
my belief--puts the lives of United States troops at risk. Exporting 
this oil could have the effect of increasing consumer petroleum costs 
on the west cost and threatening the vitality of our domestic tanker 
fleet. Moreover, Alaskan oil exports would cause job losses in the 
maritime and related ship-supply industries on the west coast. I see no 
sound policy reason for the Nation to accept these costs.
  Our ability to withstand future energy crises will certainly be 
tested if we fail to take the appropriate steps now to protect our own 
energy resources. Keeping this important domestic energy source for 
domestic use only will affirm the policy of
 keeping this country on the right path toward energy security.

  During the 1973 trans-Alaska pipeline authorization debate, and 
during the numerous debates on exports since the ban was originally put 
in place, a fundamental issue for me and a majority of Senators has 
been this Nation's energy security. The Senate spent weeks debating the 
merits of allowing the construction of the trans-Alaska pipeline and 
one of the primary concerns and points of debate was how this precious 
domestic supply was to be used to improve the energy security of the 
United States..
  Remarks at the time by Senator Taft give a sense of the direction of 
the debate.

       It has been stated several times that oil from the Alaskan 
     North Slope will not be shipped to the Midwest. It has also 
     been stated--and feared by many--that a surplus of crude oil 
     on our west coast will result in the export of this fuel to 
     other countries. It is understandable that Americans would 
     question this action when we are so desperately in need of 
     oil in this country. It is also essential that we not be 
     forced to rely too heavily upon oil from Middle Eastern 
     nations who have stated their intentions to play politics 
     with oil to influence foreign politics.

  Recall that in 1973, we were in the midst of an oil embargo and our 
heavy reliance on foreign oil turned very quickly into an economic 
crisis and a national security emergency. So I think it is fair to say 
that the Members of the Senate at that time were very much aware of the 
dangers of
 too great a reliance on foreign sources of oil. The Members of the 
Senate at that time knew, better than probably any other class of 
Senators since the attack on Pearl Harbor, that oil is an important 
national, as well as natural, resource. Because of its ability to 
influence the events of nations, oil differs fundamentally from more 
benign, local commodities.

  In 1973, the Senate was very much divided over whether to allow the 
construction of the trans-Alaska pipeline, and I recall Vice President 
Agnew casting the tie-breaking vote on final passage. However, the 
Senate was very clear about one thing: If approval was to be given for 
the pipeline, any oil transported through that pipeline was to be for 
domestic consumption only. The oil was not to be sold to foreign 
countries. The oil was to enhance the energy security of this Nation by 
reducing our reliance on foreign imports.
  It is clear that we have yet to learn our lesson. This fact is 
illustrated well by the national oil consumption and supply figures 
released each year by the American Petroleum Institute. API's reports 
over the past decade show that domestic oil production has continued to 
decline, while domestic oil demand has continued to increase by 
thousands of barrels of oil a day.
  In 1970, U.S. crude oil production hit its all time peak of 9.6 
million barrels per day. By 1973, the year of the Arab oil embargo, 
United States production had fallen to 9.2 million barrels per day. 
Today, the United States produces about 6.6 million barrels per day, a 
28-percent decline since 1973 and a 31-percent decline since 1970. Less 
crude oil
 is produced by the United States today than was produced 40 years ago 
in 1955.

  According to projections by DOE's Energy Information Administration, 
U.S. crude production will continue to decline over the next decade, to 
5.4 million barrels per day by the year 2000, 5.2 million barrels per 
day by the year 2005. The Department of Energy reports that the United 
States produced 5.2 million barrels per day in 1950. To add some 
perspective to that number, in 1950, there were 40 million cars on 
America's highways; today there are 143 million.
  This widening gap between domestic production and demand is being 
filled by an increasing stream of foreign oil imports. In fact, in 
1991, the same year this Nation sent its young men and women to war in 
the Persian Gulf to protect an unstable supply of foreign oil, imports 
accounted to approximately 45.6 percent of America's domestic oil 
consumption. That event should have shaken this Nation into a renewed 
commitment to energy conservation and convinced us to reduce our 
dangerous reliance on foreign oil. However, our reliance on foreign oil 
imports has increased from 45.6 percent at the time of the Persian Gulf 
war to approximately 54 percent today. Experts predict a steady 
increase, approaching 60 percent, in the coming years.
  This significant reliance on foreign sources of oil merits our 
serious concern and our most thoughtful judgment. Shipping domestic 
supplies to foreign markets in order to stimulate otherwise marginal 
U.S. production is not, in my view, a prudent way for us to address the 
long-term energy security of this Nation. Promoters of the
 trans-Alaska pipeline disavowed any desire to ever export oil from the 
pipeline, and if my memory serves me correctly, the senior Senator from 
Alaska sponsored an amendment to outlaw exports.

  In 1973, those arguing that we should export our domestic oil 
supplies did not prevail because exporting our domestic supplies was 
not in the national interest. Those arguing for exports are no more 
persuasive today. Exporting our finite domestic oil supplies is not a 
prudent method of decreasing our reliance on foreign oil. It was not 
prudent in 1973. It is not prudent today. It is reverse logic of a very 
dangerous sort.
  By the passage of the 1992 National Energy Act, we now have many of 
the tools necessary to establish a sound national energy policy. But 
make no mistake: We have a long way to go to achieve energy 
independence and energy security in this country. We must commit 
ourselves to partnership, to consensus and to cooperation if we are to 
move our Nation into the role of world leader on numerous energy 
fronts, including in reducing fossil fuel use and increasing renewable 
energy technology.
  Maintaining the current requirement that Alaskan North Slope crude 
oil is to be used for domestic purposes only is a vital part a rational 
energy policy for this country.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. HATFIELD. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HATFIELD. Mr. President, I have tried to outline my position in a 
general sense and then, in the historic context, the development of 
this legislation.
  I would like to turn now from the general to the specific. The 
Senator from California, a while ago on the floor, was raising the 
questions about the impact upon jobs and upon the local economy--in 
California and other west coast cities. I would like to further that 
discourse by referring to my own State of Oregon, and its relationship 
to Washington State, because the Port of Portland serves both sides of 
the Columbia River and the employees of the Port of Portland, many of 
them, traverse the bridge between the two States and their full-time 
employment [[Page S6674]] is in the State of Oregon. We have a lot of 
exchange between Vancouver, WA, and Oregon, the city of Portland.
  Based upon the export restriction policy established by Congress in 
1973, an infrastructure has been developed to transport, refine, and 
deliver massive amounts of domestic crude oil to American consumers. In 
the State of Washington, refineries were built by integrated oil 
companies and independent refiners to process Alaskan crude. The 
infrastructure required to receive this type of crude oil and deliver 
it to marketers was also developed. In my own State of Oregon, 
facilities were built or expanded to repair the dozens of Jones Act 
tankers that carry this oil. In the State of California, refineries 
were built or expanded, a new pipeline from Long Beach to Texas was 
built, and shipyards were expanded to build and repair tankers in the 
Alaskan trade. A pipeline was built across Panama to provide for the 
more efficient transportation to gulf coast ports of Alaskan crude that 
could not be consumed on the west coast. Jones Act oil tankers were 
built to transport the oil to end-use markets. Each of these 
infrastructure investments was encouraged by Congress as part of its 
central policy objective: increased energy security through the 
domestic use of this important oil supply.
  This relates to another point that I mentioned earlier in my remarks, 
and upon which I shall now expand. This point is less related to energy 
policy and more related to fairness.
  In direct reliance on this act of Congress that put the export 
restriction in place, and on the enthusiastic encouragement of the 
Federal Government, the citizens of Portland, OR, undertook a major 
investment. They voted to tax themselves $84 million to fund a major 
expansion of the Portland Ship Repair Yard. This expansion program 
included acquisition of the largest floating dry dock on the west 
coast. This dry dock is specially designed for the large oil tankers 
that haul oil from the Trans-Alaska Pipeline. These vessels are known 
as the Alaskan North Slope very large crude carriers [VLCC's].
  Of the $84 million initially borrowed to complete the facility, $50 
million remains to be paid. It is very likely that this facility, which 
accounts for 500 to 800 family wage jobs, will not continue to be 
viable if the bill currently before the Senate passes and the export 
ban is lifted. Exports will provide ship owners with a greater economic 
incentive to have ships repaired in the low-cost East Asian shipyards.
  Mr. President, $84 million is a great deal of money to taxpayers in 
Portland. This was not an investment based on a Federal handout, but 
rather, it was a city of moderate means putting up its own credit and 
ingenuity on the line to invest in a facility of integral importance to 
a stated Federal objective. It took a great deal of courage for 
Portlanders to make that investment. But it was not a blind venture. It 
was based on a great deal of encouragement by Federal officials that 
such a facility was a necessary part of the long-term plan for the 
Alaska Pipeline trade.
  Let me share some of the rhetoric of the time. I believe it is 
helpful in understanding why the citizens of Portland made this 
significant investment and why it would be highly unfair to abruptly 
change the rules at this point.
  After it became apparent that the oil would be used for domestic 
purposes only, proponents of constructing the pipeline made a very 
strong case for the benefits such a pipeline would have for the U.S. 
maritime industry, and in particular their expectation that the various 
components of the maritime industry would play a vital role in 
accomplishing the broad national objectives that construction of a 
trans-Alaska pipeline was designed to achieve.
  Commerce Secretary Maurice H. Stans was in the forefront of Nixon 
administration officials in advocating approval of the pipeline. In 
addressing the Seafarers International Union of North
 America in June 1973, Secretary Stans said the pipeline would help 
revive U.S. maritime strength. A trans-Canada pipeline was an option 
being seriously considered at that time, and Secretary Stans argued to 
the group that a pipeline across Canada would ``eliminate all the great 
maritime opportunities that the Alaska line would provide.'' The 
Seafarers agreed and approved resolutions endorsing the trans-Alaska 
route and another resolution re-endorsing the Jones Act.

  Andrew Gibson, Assistant Secretary of Commerce for Maritime Affairs, 
visited Portland, OR, in May 1973, and made the following remarks to 
the Propeller Club, a group of maritime interests:

       We have estimated that with the completion of the Alaska 
     Pipeline, a fleet of approximately 30 new U.S. tankers would 
     be added to the American merchant marine to transport the oil 
     from southern Alaska to the West Coast. The construction of 
     these vessels at an estimated cost of $1 billion would give 
     an added stimulus to our shipbuilding industry and would 
     provide approximately 48,000 man-years of work in the U.S. 
     shipyards and allied industries. Manning and maintaining 
     these vessels would create many additional permanent maritime 
     jobs, while the estimated annual operating and maintenance 
     cost of $30 million would provide added employment in the 
     related service industries.

  The debates in Congress added further substance to the understanding 
that the maritime industry was being called upon to play an important 
role in the success of the trans-Alaska pipeline. The assumption that 
this supply was for domestic use only is pervasive. Congressman Young 
made the case in the House:

       In the maritime industry, 35 tankers will be employed in 
     the fleet required for transporting the oil to the west coast 
     ports. Twenty-seven of these ships remain to be constructed. 
     It has been estimated by the Maritime Administration that the 
     construction of these ships will create 73,500 man-years of 
     labor in shipyards and supporting industries. Maintenance of 
     the fleet will generate 770 permanent jobs in the Nation's 
     shipyards.

  In the Senate, Senator Stevens made a similar statement:

       The trans-Alaska pipeline will particularly aid several 
     vital American industries which are currently depressed. For 
     example, the American maritime and shipbuilding industry will 
     be helped greatly. Alaskan oil must be carried in American-
     bottom ships under the Jones Act. At least 27 new tankers 
     must be constructed; 73,480 man-years of shipyard employment 
     will be created; 3,800 permanent jobs will be created to run 
     and maintain this new, modern tanker fleet. This will result 
     in more than $1.0 billion for America's shipbuilding 
     industry. This is an industry that has, for some time, been 
     at a competitive disadvantage because of lower costs from 
     foreign competition.

  As I read these statements, I can well understand why the citizens of 
Portland believed they were being given assurances that there would be 
continuity if they stepped forward to participate in this new venture 
of national importance. To now lift the export restriction and ask the 
taxpayers of Portland to take a $50 million loss on a shipyard that is 
now of questionable utility is imposing a great unfairness. This is an 
unfairness that I cannot allow.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BREAUX. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BREAUX. Mr. President, I inquire of the chair and also the floor 
managers. What is the pending business of the Senate? I would like to 
make some comments on bill S. 395.
  The PRESIDING OFFICER. The pending question is the Murkowski 
amendment 1078 to S. 395.
  Mr. BREAUX. Mr. President, is it in order for me to engage in debate 
on the pending legislation at the present time?
  The PRESIDING OFFICER. It is.
  Mr. BREAUX. Mr. President, with that understanding, I would like to 
make some comments on S. 395.
  Mr. President, I rise in support of the provision included in S. 395 
which would lift the ban on the export of the Alaskan North Slope crude 
oil so long as such oil is carried on U.S.-flag vessels.
  This amendment would reduce our trade imbalance and raise $99 to $180 
million in revenues for the U.S. Treasury. It would also create an 
additional 10,000 to 25,000 new jobs and would certainly spur domestic 
energy production.
  In 1973, Mr. President, shortly after the first Arab oil boycott, 
Congress adopted this ban, and since then the domestic and world energy 
markets have dramatically and significantly changed. Today, the export 
ban diminishes our energy security because it artificially depresses 
wellhead prices on [[Page S6675]] the west coast, making it uneconomic 
for domestic oil producers to invest in marginal operations.
  Mr. President, a Department of Energy study confirms that lifting the 
ban on Alaskan crude oil would improve domestic energy security by 
encouraging domestic exploration activities. DOE estimates that 
domestic production will increase between 100,000 and 110,000 barrels a 
day if the ban is lifted.
  In addition to increasing domestic production, this bill will also 
help to stabilize the decline in the size and vitality of the domestic 
merchant marine.
  By authorizing the exports of Alaskan oil on U.S.-flag vessels, we 
can help preserve a vital element of our domestic merchant marine, and 
we can do so without subsidies from the American taxpayer and without 
measurably increasing any risk to the environment.
  Mr. President, in 1990, Congress overwhelmingly supported enactment 
of the Oil Pollution Act. That legislation ultimately will require all 
oceangoing tankers plying our waters to be built or rebuilt with a 
double hull. It already ensures that American flag and foreign flag 
tankers will continue to be subject to the same strict safety 
requirements. And since December 28 of last year, it has imposed 
substantial financial responsibility requirements for all tankers 
entering U.S. waters.
  Last year, the Department of Energy conducted an extensive study of 
the likely effects, including likely environmental implications, of 
changing the current law. The Department, and I quote:

       Found no plausible evidence of any direct negative 
     environmental impact from lifting the ANS export ban.

  By and large, Mr. President, the same U.S.-built, U.S.-owned, and 
U.S.-crewed vessels that carry Alaskan oil to market today will 
continue to carry the crude to market tomorrow with a change in policy. 
The same skilled merchant mariners will continue to man the vessels. 
Current Department of Defense and Department of Transportation 
projections indicate that we are facing a critical shortage of trained 
mariners capable of manning the ready reserve force. This bill will 
help ensure that we will continue to have a reservoir of capably 
trained mariners sufficient to man our reserve fleet in time of 
national emergency. And our Nation will continue to have access to a 
fleet of environmentally safe and militarily useful vessels that 
otherwise are destined to be converted into razor blades.
  By enacting this bipartisan legislation, we can help ensure the 
continued existence of the largest segment of our domestic merchant 
marine. Let us demonstrate again that we can work together to help 
promote our energy security, our national security, and at the same 
time preserve jobs.
  Mr. President and my colleagues, I will just add a couple of remarks 
and point out that again this ban was enacted at a time when this 
country literally was on its knees from the standpoint of energy 
requirements. The Middle Eastern oil nations had banded together to 
form cartels which restricted amounts of oil being exported to the 
United States in particular.
  We all remember the long lines that occurred in the 1970's when 
people had to wait in line to buy gasoline for their automobiles and 
vehicles. Everyone in America wanted Congress to do something about it. 
One of the things that we did was to say, all right, we are not going 
to allow any of the Alaska North Slope oil exported to other countries. 
We are going to keep it right here.
  Mr. President, I think we probably acted with some degree of haste in 
taking that action and in thinking that by doing so we were somehow 
going to increase the domestic production. I think in reality we should 
all understand that oil is a commodity which can be traded all over the 
world; that, indeed, many ships that are plying the oceans filled with 
oil are sent to different ports in the middle of a voyage depending on 
the need because the price is better in one area or the need is greater 
in another area or for whatever economic determination that is made.
  So the point is that oil is traded on the world market according to 
need and price. If we can, indeed, take some of the crude oil in Alaska 
and sell it at a better price in overseas markets, we should be allowed 
to do that. The price return will allow greater domestic production in 
areas of the United States where that production can occur.
  I am a Senator from the State of Louisiana. I have nothing to do with 
oil, of course, that is produced in Alaska. But I think this is good 
policy for my State, for the State of Alaska, and indeed for all of the 
States in the United States. I think it will increase production, and 
it will not do damage to any part of our Nation. It is good economic 
energy policy for the future of our country.
  Mr. President and my colleagues, I hope we would move on this. It 
should be relatively noncontroversial. I know some Members have 
legitimate concerns, and they will be heard, but I think we should move 
forward, debate the issue, vote on this legislation, and ultimately we 
should adopt it as good energy policy.
  Having said that, Mr. President, seeing no one else seeking 
recognition at the moment, I would suggest the absence of a quorum.
  The PRESIDING OFFICER. The absence of a quorum has been noted. The 
clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DeWINE. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Grams). Without objection, it is so 
ordered.
  Mr. DeWINE. Mr. President, I further ask unanimous consent to proceed 
as if in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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