[Senate Report 104-78]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 101
104th Congress                                                   Report
                                 SENATE

 1st Session                                                     104-78
_______________________________________________________________________


 
                  ALASKA POWER ADMINISTRATION SALE ACT

                                _______


   April 27 (legislative day, April 24), 1995.--Ordered to be printed

_______________________________________________________________________


  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 395]
    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 395) to authorize and direct the 
Secretary of Energy to sell the Alaska Power Administration, 
and for purposes, having considered the same, reports favorably 
thereon with amendments and amendment to the title and 
recommends that the bill as amended do pass.
    The amendments are as follows:
    1. Strike page 1, line 3, through page 7, line 25, and 
insert the following:
                                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's 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 entitlement in 
        section 6 of the Act of July 7, 1958 (commonly referred 
        to as the Alaska Statehood Act, P.L. 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, P.L. 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).
    (k) The sales authorized in this title shall occur not 
later than 1 year after the date of enactment of legislation 
defining ``first use'' of Snettisham for purposes of section 
147(d) of the Internal Revenue Code of 1986, to be considered 
to occur pursuant to acquisition of the property by or on 
behalf of the State of Alaska.

    2. On page 10, line 21, strike ``Act'' and insert 
``Title''.
    3. Amend the title so as to read:

    To authorize and direct the Secretary of Energy to sell the 
Alaska Power Administration, and to authorize the export of 
Alaska North Slope crude oil, and for other purposes.
                         Purpose of the Measure

    The purpose of S. 395, as ordered reported, is to provide 
for the sale of the assets and subsequently the termination of 
the Alaska Power Marketing Administration (Title I); and to 
authorize exports of Alaskan North Slope crude oil (Title II).

                          Background and Need

             title i, alaska power administration sale act

    Title I provides for the sale of Alaska Power Marketing 
Administration's (APA) assets, and the termination of the APA 
once the sale occurs.
    The APA is unique among the Federal Power Marketing 
Administrations (PMA). First, unlike the other PMAs, the APA 
owns its power generating facilities, two hydroelectric 
projects. Second, these single-purpose projects are not the 
result of a water resource management plan. Instead, they were 
built to promote economic development and the establishment of 
essential industries. Third, the APA operates entirely in one 
State. Fourth, the APA was never intended to remain 
indefinitely under government control. That is specifically 
recognized in the Eklutna project authorizing legislation.
    The APA owns two hydroelectric projects, Snettisha and 
Eklutna. Snettisham is a 78 megawatt project located 45 miles 
south of Juneau. It has been Juneau's main power source since 
1975, accounting for 80 percent of supply. Eklutna is a 30 
megawatt project located 34 miles NE of Anchorage. It has 
served the Anchorage and Matanuska Valley areas since 1955, 
accounting for 5 percent of supply.
    The APA assets will be sold pursuant to the 1989 purchase 
agreements between the Department of Energy and the purchasers. 
Snettisham will be sold to the State of Alaska, and Eklutna 
will be sold jointly to the Municipality of Anchorage, the 
Chugach Electric Association, and the Matanuska Electric 
Association. For both, the sale price is determined by 
calculating the net present value of the remaining debt service 
payments that the Treasury would receive if the Federal 
government retained ownership of the two projects. The sale 
price will vary with the interest rate at the time of purchase.
    The bill and separate formal agreements provide for the 
full protection of fish and wildlife. The purchasers, the State 
of Alaska, the U.S. Department of Commerce National Marine 
Fisheries Service, and the U.S. Department of the Interior have 
entered into a formal agreement providing for post-sale 
protection, mitigation, and enhancement of fish and wildlife 
resources affected by Eklutna and Snettisham. S. 395 makes that 
agreement legally enforceable.
    As a result of this formal agreement, the Department of 
Energy, the Department of the Interior, and the Department of 
Commerce all agree that the two hydroelectric projects warrant 
exemption from FERC licensing under the Federal Power Act. The 
August 7, 1991 formal purchase agreement states, in part, that:

          NMFS, USFWS and the State agree that the following 
        mechanism to develop and implement measures to protect, 
        mitigate damages to, and enhance fish and wildlife 
        (including related spawning grounds and habitat) 
        obviate the need for the Eklutna Purchasers and AEA to 
        obtain FERC licenses. (Emphasis provided.)

    This agreed-upon exemption from the Federal Power Act's 
requirement to obtain a FERC license will save the purchasers--
and their customers--hundreds of thousands of dollars in annual 
fees.
    The Alaska Power Administration has 34 people located in 
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 APA employees, 
although the DOE jobs are expected to be in the lower-48.

         title ii, trans-alaska pipeline amendment act of 1995

Background
    In 1973, shortly after commencement of the Arab-Israeli War 
and the first oil embargo, Congress adopted the Trans-Alaska 
Pipeline Authorization Act (TAPS), Pub. L. No. 93-153, 
authorizing construction of a pipeline to move the oil from 
state lands on the North Slope to an accessible port at Valdez, 
Alaska. The legislation also established export restrictions on 
all domestically produced crude oil carried over any federal 
right-of-way by adding a new section 28(u) to the Mineral 
Leasing Act. As amended, the Mineral Leasing Act permitted 
exports of domestically produced crude oil, including Alaska 
North Slope (ANS) crude oil, if the President determined the 
exports would be in the national interest, would not diminish 
the total quality or quantity of petroleum available to the 
United States, and would be done in accordance with the 
licensing provisions of the Export Administration Act of 1969.
    In 1979, following the second major oil shock, Congress 
effectively banned ANS exports by adopting section 7(d) of the 
Export Administration Act of 1979. Section 7(d) for the first 
time established specific export restrictions on ANS crude oil 
independent of the original TAPS provision.

World Oil Situation

    Much has changed since the 1970s when the United States 
faced energy supply threats. In 1973, Middle East countries 
jointly boycotted the United States at the outbreak of the war. 
Thereafter, OPEC was able to ratchet up prices repeatedly, as 
demand for oil seemed essentially inelastic while energy demand 
appeared to grow geometrically.
    The flexible U.S. economy, however, reacted to the 
anticipated shortage by rapid gains in energy efficiency. By 
1990 oil demand was less than 65% of the amount forecast in 
1978. By 1992, the ratio of energy expenditure to GNP was only 
82% of the 1980 level. However, while the demand pressure has 
moderated, domestic crude oil production has dropped 
drastically. Last year, imports surpassed the previous all-time 
high set in 1977.

Department of Energy Study

    In June of 1994, the Department of Energy issued a study 
entitled, ``Exporting Alaskan North Slope Crude Oil--Benefits 
and Costs.'' The Department concluded that ``there would be a 
significant number of benefits to the United States from 
allowing the export of ANS crude.'' The Department found that 
permitting ANS exports would encourage additional oil 
production in California and Alaska, would raise royalty 
revenues for the federal government and for the State of Alaska 
and California, and could generate between 10,000 and 25,000 
additional jobs in the United States by the end of the decade.
    The study also determined that the lifting of the ANS oil 
export ban would help slow the decline in Alaska North Slope 
production. Alaska North Slope production has fallen from a 
high of about 2.2 million b/d in the early 1990s to about 1.6 
million b/d in 1994. The Department also concluded that 
``[l]ittle, if any, increase in consumer petroleum prices would 
be likely'' by lifting the export ban and said that ``[n]o 
significantly negative environmental implications were found.'' 
The Department also found that West Coast refiners would be 
forced to absorb higher crude oil acquisition costs based on 
market-determined prices for the crude oil, rather than the 
artificially low prices created by the export ban. The 
Department concluded that refiner margins on the West Coast, 
currently well above those in other markets, would be reduced 
rather than consumer prices being increased. Finally, the 
Department said: ``Our review found no plausible evidence of 
any direct negative environmental impact from lifting the ANS 
export ban.''

Alaskan Oil Movements and the Environment

    In 1994, ANS oil moved by vessel to three destinations. 
Most of its was carried in American-flag vessels to the West 
Coast, Hawaii, and Alaska. In addition, ANS oil moved in 
American-flag Virgin Islands. Since 1987, while West Coast 
consumption has remained relatively stable, the ANS movement to 
the Gulf Coast has dropped from approximately 600,000 b/d to 
its present level. The difference already has been replaced by 
imports carried in foreign-flag vessels. As indicated, natural 
market forces, particularly declining ANS production, already 
have substantially reduced American-flag movements. Independent 
of lifting the ban, they will otherwise be replaced with 
imports in any event as North Slope production reaches 
equilibrium with West Coast demand.
    All tankers serving the U.S. ports, whether American-flag 
or foreign-flag, are subject to the same requirements under the 
Oil Pollution Act of 1990 and are subject to the same safety 
and navigation requirements of the U.S. Coast Guard.
    At the March 1 hearing, the Lieutenant Governor of Alaska 
testified that the proposed legislation should be seen as 
environmentally preferable because it encourages additional 
energy production without expanding the size of the current 
production footprint. Following the hearing, the Committee 
received letters from the Borough of Kodiak and the East 
Aleutian Island Borough. Both boroughs indicated that they saw 
no increased threat or risk to the environment of a change in 
current law.
    Based on likely tanker movements, testimony at the hearing, 
and the views expressed by the relevant parties in Alaska that 
might be most affected by ANS exports, it appears unlikely that 
this change in current law will have any noticeable adverse 
environmental consequences.

U.S.-Flag Requirement

    The bill requires (with only limited exceptions) that any 
ANS crude exported must be carried on ``a vessel documented 
under the laws of 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)).'' At the hearing 
held before the Committee on March 1, questions were raised 
about whether this requirement violated U.S. international 
obligations, in particular requirements of the World Trade 
Organization, the ``standstill agreement'' of the General 
Agreement on Trade in Services (GATS), and the Code of 
Liberalisation of Current Invisible Operations of the 
Organization for Economic Cooperation and Development (OECD). 
In a letter to Senator Johnston, reprinted below, the U.S. 
Trade Representative assured the Committee that the bill as 
drafted did not violate U.S. international obligations.

                          Legislative History

    S. 395 was introduced by Senators Murkowski and Stevens on 
February 13, 1995. The Committee held a hearing on S. 395 on 
March 1, 1995. At the business meeting on March 15, 1995, the 
Committee on Energy and Natural Resources ordered S. 395, as 
amended, favorably reported.

           Committee Recommendations and Tabulation of Votes

    The Senate Committee on Energy and Natural Resources, in 
open business session on March 15, 1995, by a majority vote of 
a quorum present, recommends that the Senate pass S. 395, if 
amended as described herein.
    The rollcall vote on reporting the measure was 14 yeas, 4 
nays, as follows:
        YEAS                          NAYS
Mr. Murkowski                       Mr. Hatfield
Mr. Domenici                        Mr. Bumpers
Mr. Nickles*                        Mr. Akaka
Mr. Craig                           Mr. Wellstone
Mr. Thomas
Mr. Kyl*
Mr. Grams
Mr. Jeffords*
Mr. Burns
Mr. Campbell
Mr. Johnston
Mr. Ford
Mr. Bradley
Mr. Bingaman

    *Indicates voted by proxy.
                      Section-by-Section Analysis

                                title i

    Section 101 is the short title.
    Section 102 authorizes and directs the Secretary of Energy 
to sell the Snettisham and Eklutna hydroelectric projects in 
accordance with their purchase agreements. It authorizes such 
sums as may be necessary to prepare, survey and acquire the two 
projects for sale.
    Section 103 provides an exemption from the Federal Power 
Act for the Snettisham and Eklutna projects. It creates an 
enforcement mechanism for the Memorandum of Agreement regarding 
the protection and enhancement of fish and wildlife. It 
provides for the transfer of certain rights-of-way to the 
Alaska Power Administration. It provides for the transfer of 
certain Snettisham and Eklutna lands. It provides for the 
termination of the Alaska Power Administration of the 
Department of Energy.

                                title ii

    Section 201 designates the title as the ``Trans-Alaska 
Pipeline Amendment Act of 1995''.
    Section 202 would eliminate all existing restrictions on 
exports of Alaskan North Slope crude oil, including those in 
effect by statute, regulation, or executive order. Section 202 
would add a new subsection (f) to section 203 of the Trans-
Alaska Pipeline Authorization Act (TAPS), establishing the 
conditions under which ANS crude oil may be exported.
    The new subsection 203(f)(1) of TAPS would, subject to the 
requirements of paragraphs (2) and (3), permit exports of any 
oil transported by pipeline over right-of-way granted pursuant 
to section 203 of TAPS.
    The new subsection 203(f)(2) would require that American-
flag vessels be used to carry the exports, except to countries 
that already may import the oil under current law such as 
Israel and other countries pursuant to the International 
Emergency Oil Sharing Plan of the International Energy Agency.
    The new subsection 203(f)(3) of TAPS would provide that 
nothing in this subsection would restrict the authority of the 
President under the Constitution, the International Emergency 
Economic Powers Act, or the National Emergencies Act to 
prohibit exportation of the oil.
    Section 203 reaffirms a policy statement made by Congress 
in 1973 to confirm the President's authority to ensure an 
equitable allocation of available North Slope crude all 
resources and petroleum products among all regions and all of 
the several States.
    Section 205 requires the Comptroller General to conduct a 
review and to issue a report. Due five years after the date of 
enactment, the report would focus on the effects of Alaskan 
North Slope oil exports and would contain such recommendations 
as the Comptroller General considered appropriate.
    Section 206 establishes the date of enactment as the 
effective date of this title.

                   Cost and Budgetary Considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 22, 1995.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 395, a bill to 
authorize and direct the Secretary of Energy to sell the Alaska 
Power Administration, and for other purposes.
    Enacting this legislation would affect direct spending. 
Therefore, pay-as-you-go procedures would apply to the bill.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

               congressional budget office cost estimate

    1. Bill number: S. 395.
    2. Bill title: A bill to authorize and direct the Secretary 
of Energy to sell the Alaska Power Administration, and for 
other purposes.
    3. Bill status: As ordered reported by the Senate Committee 
on Energy and Natural Resources on March 15, 1995.
    4. Bill purpose: Title I of this bill would authorize the 
sale of the Alaska Power Administration (APA) in accordance 
with the terms of the purchase agreements negotiated in 1989 
between the U.S. Department of Energy and the proposed 
purchasers of the APA. The sale would be conditional on the 
enactment of legislation that would allow Alaska to issue tax-
exempt debt to finance the purchase of the APA.
    Title II of the bill would amend the Trans-Alaska Power 
Authorization Act to allow exports of Alaskan North Slope (ANS) 
oil as long as the oil is transported by vessels documented 
under the laws of the United States (unless international oil 
supply agreements apply to the particular country). In 
addition, the permission to export ANS oil would not restrict 
the President's existing authority to restrict exports under 
the International Emergency Economic Powers Act or the National 
Emergencies Act.
    5. Estimated cost to the Federal Government: Enactment of 
Title I, by itself, would have no budgetary impact because 
consummation of the sale would require further legislation. If 
such legislation were enacted, it would have the budgetary 
effects shown in Table 1.

 TABLE 1.--COST OF FUTURE LEGISLATION PERTAINING TO TITLE I: SALE OF THE
                       ALASKA POWER ADMINISTRATION                      
                [By fiscal year, in millions of dollars]                
------------------------------------------------------------------------
                               1996     1997     1998     1999     2000 
------------------------------------------------------------------------
Asset sale receipts:                                                    
    Estimated budget                                                    
     authority.............      -77        0        0        0        0
    Estimated outlays......      -77        0        0        0        0
Direct spending:                                                        
    Estimated budget                                                    
     authority.............        0       11       11       11       11
    Estimated outlays......        0       11       11       11       11
Authorizations of                                                       
 Appropriations:                                                        
    Estimated authorization                                             
     level.................        5       -7       -7       -7       -7
    Estimated outlays......        4       -5       -7       -7       -7
------------------------------------------------------------------------

    We estimate that enacting Title II would reduce net federal 
outlays by about $55 million over the next five years. These 
savings would take the form of increased offsetting receipts as 
the result of slightly higher oil prices for crude oil produced 
and sold from federal lands. Table 2 shows the estimated budget 
impact for Title II.

         TABLE 2.--COST OF TITLE II: ALLOWING EXPORTS OF ANS OIL        
                [By fiscal year, in millions of dollars]                
------------------------------------------------------------------------
                               1996     1997     1998     1999     2000 
------------------------------------------------------------------------
Direct spending:                                                        
    Estimated budget                                                    
     authority.............      -16      -13      -10       -8       -6
    Estimated outlays......      -16      -13      -10       -8       -6
------------------------------------------------------------------------

    The costs of this bill fall within budget functions 270 and 
300.
Alaska PMA sale

    CBO estimates that sale of the APA in accordance with the 
terms and conditions of the negotiated purchase agreements 
would result in receipts to the government of about $77 million 
near the end of fiscal year 1996. Under the purchase 
agreements, the sales price would be determined by calculating 
the net present value of the remaining debt service payments 
that the Treasury would receive if the federal government 
retains ownership of the APA. The discount rate for this 
calculation would depend in part on the interest rate obtained 
by Alaska to finance the purchase of the APA. Under the scoring 
procedures specified in the 1995 budget resolution (H. Con. 
Res. 218), receipts from the sale would be considered the 
proceeds of an asset sale, and thus they would not be credited 
as a reduction in the deficit for purposes of the Congressional 
Budget Act of 1974 and the Balanced Budget and Emergency 
Deficit Control Act of 1985.
    After the sale is completed, the government would no longer 
receive income from producing electric power at APA's 
facilities--approximately $11 million annually. The bill would 
authorize appropriations of sums necessary to prepare the APA 
for sale. Based on information from DOE, we estimate the agency 
would need to spend about $5 million in 1995 to conduct land 
surveys, obtain appraisals and legal services, and obtain 
powerline and substation rights-of-way. Finally, when the sale 
of the APA is completed, this government agency would be 
abolished and would no longer require annual appropriations of 
about $7 million to pay for operating expenses.

Export of ANS oil

    If Title II of this bill is enacted, CBO expects that some 
ANS oil would be exported to Japan and possibly other Pacific 
Rim countries and that such exports would reduce the supply of 
oil flowing from Alaska to the U.S. West Coast. Based on 
information from the Department of Energy and industry sources, 
CBO estimates that this reduction in supply would increase the 
price of oil on the West Coast by approximately 50 cents per 
barrel. The effect on oil prices is likely to decrease over 
time, however, as California's demand for oil and refined 
products increase while ANS production decreases.
    Higher West Coast oil prices will produce additional income 
to the federal government from the sale of its own oil and from 
royalties paid by private producers for oil extracted from 
federal lands. CBO estimates that royalties paid to the 
government on leases of both onshore and offshore federal lands 
would increase by an average of about $3 million per year over 
the next five years, and that receipts for the sale of oil from 
the Naval Petroleum Reserve in Elk Hills, California would 
increase by an average of about $8 million per year over the 
next five years.
    The increases in both federal lease royalties and Elk Hills 
sales are likely to be greatest in the first year and to 
diminish over time. In total, we estimate that the increase in 
receipts would be $16 million in fiscal year 1996 and would 
average $11 million per year over the 1996-2000 period.
    6. Comparison with spending under current law: For 1995, 
the APA has appropriations of $6.5 million and will have 
estimated outlays of about $6 million. If the APA were sold, 
H.R. 395 would authorize additional sums necessary to prepare 
for the sale, and CBO estimates $5 million would be needed for 
this purpose. Following a sale, the APA would no longer exist 
or require federal appropriations. Hence, beginning in 1997, 
appropriations for APA operations would decline by nearly $7 
million per year. On the other hand, once the APA is sold, 
offsetting receipts would decline by $11 million per year.
    7. Pay-as-you-go-considerations: Section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 sets 
up pay-as-you-go procedures for legislation affecting direct 
spending or receipts through 1998. CBO estimates that enactment 
of S. 395 would affect direct spending by increasing offsetting 
receipts. Therefore, pay-as-you-go procedures would apply to 
the bill.
    Enacting Title II would decrease outlays by increasing 
offsetting receipts from the sale of oil and from increased 
royalties. The CBO estimate of these additional receipts are 
shown below:

------------------------------------------------------------------------
                                                 1996     1997     1998 
------------------------------------------------------------------------
Change in outlays............................      -16      -13      -10
Change in receipts...........................    (\1\)    (\1\)    (\1\)
------------------------------------------------------------------------
\1\ Not applicable.                                                     

    While Title I of this bill would authorize the sale of the 
APA, section 103(k) would make the sale conditional upon 
enactment of legislation that would allow Alaska to issue tax-
exempt debt to purchase the APA. Any subsequent legislation 
that allowed Alaska to issue tax-exempt debt for this purpose 
would have a pay-as-you-go cost of $11 million annually in 
direct spending over the 1996-1998 period.
    8. Estimated cost to State and local governments: None.
    9. Estimate comparison: None.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Kim Cawley and Pete Fontaine.
    12. Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.
                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 395. The bill is not a regulatory measure in 
the sense of imposing government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 395.

                        Executive Communications

    The Committee on Energy and Natural Resources requested 
formal views on S. 395 from Executive agencies. The Department 
of Energy Deputy Secretary Bill White's submitted written and 
oral testimony on behalf of the Administration on S. 395 at the 
Committee hearing on March 1, 1995 reflects the 
Administration's position on S. 395. On March 9, following the 
hearing, the U.S. Trade Representative responded to a letter 
sent by Senator Johnston addressing concerns about whether S. 
395 violated U.S. international obligations. The written 
statement and the exchange of correspondence between Sen. 
Johnston and Mr. Kantor reprinted below:

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                     Washington, DC, March 2, 1995.
Michael Kantor,
U.S. Trade Representative,
Washington, DC.
    Dear Ambassador Kantor: The Energy and Natural Resources 
Committee is considering legislation, S. 395, to amend the 
Trans Alaska Pipeline Authorization Act to remove the current 
prohibition on the export of Alaska North Slope crude oil. The 
legislation requires that the oil be carried by a ``vessel 
documented under the laws of the U.S. and owned by a citizen of 
the U.S.'', a U.S.-flag, but not a Jones Act requirement. This 
provision has raised several concerns with respect to 
international trade agreements.
    All interested parties agree that requiring transport by 
Jones act vessels would be a violation of the General Agreement 
on Tariffs and Trade (GATT). In testimony before the Committee 
the Shipbuilders Council of America raised the concern that the 
provision requiring U.S.-flag, U.S.-crewed ships also could 
face a GATT challenge. The Council also cited allegations that 
this provision would violate the Organization for Economic 
Cooperation and Development's (OECD) Code of Liberalisation of 
Current Invisible Operations and the OECD's Common Principles 
of Shipping Policy and paragraph 7 of the General Agreement on 
Trade in Services (GATS) Ministerial Decision of Negotiations 
on Maritime Transport Services.
    Deputy Secretary of Energy Bill White testified for the 
Administration in support of the bill subject to certain 
changes. However, the following trade-related questions were 
not adequately addressed in the Administration's testimony.
    In the Administration's view, does the shipping provision 
proposed in S. 395 violate any trade agreements?
    What are the potential legal and practical effects of a 
challenge under any of these agreements?
    If a challenge were upheld by the World Trade Organization 
(WTO), or similar body, what would be the legal ramifications? 
That is, could this law be effectively amended by actions taken 
by the WTO to allow exports to continue on foreign-flag ships, 
or would Congressional or Presidential action be required 
before exports could resume?
    What would be the Administration's view of an amendment to 
S. 395 so as to reimpose the ban on exports if the shipping 
requirement is found to violate a trade agreement?
    S. 395 will be brought before the Committee for 
consideration within the next few weeks, perhaps as early as 
March 15. It is critical, therefore, that I have your detailed 
response to these questions by Friday, March 10. Thank you in 
advance for your response.
            Sincerely,
                                       J. Bennett Johnston,
                                           Ranking Minority Member.
                                ------                                

                         U.S. Trade Representative,
                         Executive Office of the President,
                                     Washington, DC, March 9, 1995.
Hon. J. Bennett Johnston,
U.S. Senate,
Washington, DC.
    Dear Senator Johnston: This replies to your letter of March 
2, 1995, requesting information on the implications of the 
cargo preference provisions of S. 395 on our obligations under 
the World Trade Organization and the Organisation of Economic 
Cooperation and Development (OECD). Specifically, you ask if 
the legislation violates any trade agreements, the potential 
legal and practical effects of a challenge, as well as its 
effect on the ongoing negotiations on maritime in Geneva.
    As to WTO violations, I can state categorically that S. 
395, is 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 associated right 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 S. 395 
on the GATS Ministerial Decision of Negotiations on Maritime 
Transport Services (Maritime Decision) which is the document 
that guides the current negotiations on maritime in 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 and 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 S. 
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 the 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 is found to 
violate our obligations, the WTO does not have authority to 
require alterations to affected 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, 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 oil be exported on U.S.-built 
vessels.
    I trust this information is of assistance to you. Please do 
not hesitate to contact me or my staff should you need more 
information.
            Sincerely,
                                                    Michael Kantor.
                                ------                                

       Testimony of William H. White, Deputy Secretary of Energy

    Mr. Chairman, it is a pleasure for me to appear before the 
Committee today to discuss the sale of the Alaska Power 
Administration and permitting the export of Alaskan North Slope 
(ANS) crude oil. I am pleased to report that the Administration 
supports both of these initiatives and hopes to work with the 
Congress toward enactment of legislation to allow for the sale 
of the Alaska Power Administration and to permit the 
exportation of Alaskan North Slope crude oil.


             title i. alaska power administration sale act


    Title I of S. 395, the ``Alaska Power Administration Sale 
Act,'' would authorize the sale of the Eklutna and Snettisham 
hydroelectric projects in Alaska and the subsequent termination 
of the Alaska Power Administration. This legislation is 
consistent with the President's FY 1996 budget and would 
implement the recommendations of the National Performance 
Review.
    Eklutna and Snettisham were authorized in 1950 and 1962, 
respectively, to encourage and promote economic development and 
to foster establishment of essential industries in Alaska. The 
projects have served those purposes well by providing, at 
moderate prices, substantial amounts of hydroelectric energy 
for their market areas. There are no other authorized or 
proposed Federal power projects in Alaska.
    With the continued growth of the Alaskan economy, the 
relative importance of the Federal power program in Alaska has 
become quite small. More than 90 percent of the State's 
electric power needs are provided by non-Federal powerplants. 
The State and its electric utilities have the capability to 
plan, design, finance, build, and operate the power facilities 
that they decide are needed. Commercial Federal operations such 
as the Alaska Power Administration can be managed more 
efficiently by non-Federal public or private entities that are 
closer and more responsive to the areas and the customers that 
they serve. Under these circumstances, there is no longer a 
need for the small Federal power program in Alaska.
    Extensive studies and consultations were undertaken, 
including opportunities for public comment, before completing 
the sale proposals covered by this bill and the associated 
purchase agreements. The sales are supported by each of the 
Alaska Power Administration's utility customers, the 
municipalities of Juneau and Anchorage, Alaska's present and 
past three Governors, and this Administration.
    Briefly, Snettisham would be sold to the State of Alaska 
and Eklutna would be sold to the joint ownership of the 
Municipality of Anchorage, the Chugach Electric Association, 
Inc., and the Matanuska Electric Association, Inc. This bill 
would authorize the sales, which then would be conducted in 
accordance with the purchase agreements. Sale proceeds would be 
returned to the United States Treasury.
    The FY 1996 budget assumes the sales will occur at the end 
of that fiscal year, with proceeds estimated at $85 million. 
The actual sale prices could vary, however, because the prices 
would be determined according to formulae in the purchase 
agreements based on interest rates and remaining Treasury debt 
on the date of the sales. Following the sales, the new owners 
would assume all responsibilities for the projects, and Federal 
responsibility would cease. The Alaska Power Administration 
would be terminated.
    We believe the bill and associated purchase agreements 
provide fair and workable terms and arrangement which will 
result in the best achievable return to the United States 
Treasury, transfer of ownership in an orderly fashion, and 
protection of the interests of power consumers. The terms of 
this authorizing legislation and the associated agreements are 
unique to the Eklutna and Snettisham projects in Alaska.
    The sales would eliminate 35 permanent Federal jobs. The 
Department and the purchasers are committed to actions to 
minimize adverse impacts on the affected employees. The 
Purchase Agreements include provisions that would give Alaska 
Power Administration employees first call for the post-sale 
jobs at the two projects and provide assistance in locating 
other non-Federal jobs for the few remaining employees that may 
be displaced. For those employees who wish to continue their 
Federal careers, assistance would be provided through the 
personnel system in locating suitable jobs elsewhere within the 
Department or in other Federal agencies. It appears that 
existing authorities are adequate to meet these objectives.
    The Administration is committed to the sale of the Alaska 
Power Administration assets. We look forward to working with 
Congress toward enactment of the necessary authorizing 
legislation.


         title ii. trans-alaska pipeline amendment act of 1995


    I welcome the opportunity to discuss Federal policy on the 
export of crude oil from the Alaskan North Slope. The Congress 
has addressed this subject many times since the export 
restrictions were imposed, and, as always, this hearing 
includes representatives of organizations that have diverse and 
strongly held views. I note that some of those here today 
testified at Chairman Murkowski's July 1983 hearing on this 
issue when he was chairman of the Subcommittee on East Asian 
and Pacific Affairs of the Senate Committee on Foreign 
Relations.
    The Administration has carefully considered the important 
question of whether the prohibition on exporting Alaskan North 
Slope (ANS) crude oil should be lifted. The Department of 
Energy released a study on the impacts of permitting export of 
ANS crude oil on June 30, 1994. I have attached a copy of that 
report to this testimony.
    Fundamentally, the existing export restriction distorts the 
crude oil markets in Alaska and the West Coast in 
counterproductive ways. The benefits of permitting export of 
ANS crude oil, according to our analysis, are significant:
          Revenues to State governments would rise during 1994-
        2000 by:
                  $180 to $230 million for California from 
                Federal royalties and taxes;
                  $700 million to $1.6 billion for Alaska from 
                severance taxes and royalties.
          Federal receipts related to royalties and sales of 
        Elk Hills oil production would total between $99 and 
        $180 million.
          Oil production-related employment would increase by a 
        net of 10,000 to 25,000 jobs nationally; many would be 
        in California oil production. This takes into account a 
        small number of job losses (less than 500) in the 
        maritime sector.
          Refining employment overall would not be affected; 
        history shows that refinery capacity, and therefore 
        refining industry employment, is determined by U.S. 
        petroleum consumption.
          In Alaska alone, reserve additions could be in the 
        200 to 400 million barrel range by the year 2000, a 
        size that roughly equates to the known reserves in 
        major North Slope fields such as Point McIntyre and 
        Endicott.
          Incremental oil production would be between 30,000 
        and 50,000 barrels per day in California by the year 
        2000, and 50,000 to 70,000 barrels per day in Alaska.
    The Department has consulted with the broad range of 
interested parties. We held public meetings in San Francisco 
and Anchorage in March of 1994, at which more than 50 
organizations presented their views. We had a great deal of 
comment on our draft report. Since the report's release last 
June, the Secretary of Energy, I, and both our staffs have met 
many times with members of Congress, various associations and 
interest groups, and the public on this issue. I believe that 
this process has helped all of us understand the concerns of 
all the interested parties.
    Based on this extensive consultation process, the 
Administration is convinced that there are economic and energy 
benefits that can be gained from permitting exports of ANS 
crude. In the course of our review, however, the Administration 
identified five requirements that must be included in 
legislative language:
         1. The President must retain the authority he has 
        under current law, including the Constitution, the 
        International Emergency Economic Powers Act, and the 
        National Emergencies Act, to reinstate the ban should 
        exports be found to be contributing to adverse energy, 
        economic, or environmental conditions, or otherwise 
        threatening the national economic security.
         2. All ANS oil must be exported in U.S.-flagged and 
        U.S.-crewed vessels. Reforms should not transfer 
        existing seafarer employment abroad. Legislation must 
        provide substantial protection of seafarer employment 
        opportunities for American workers.
         3. Before any oil is exported, a full environmental 
        review must be undertaken, consistent with the National 
        Environmental Policy Act of 1970. Environmental 
        resources must be fully protected. All shipping that 
        occurs as a result of permitting ANS exports, including 
        exports from Alaska and offsetting imports into the 
        U.S., will have to meet all prevailing U.S. 
        environmental protection requirements, including the 
        new provisions of the Oil Pollution Act of 1990.
         4. Assured access to crude oil supplies at world 
        market prices. U.S. refineries must have continued 
        access to adequate supplies of crude oil, including 
        crude oil produced in Alaska, at prevailing market 
        prices. Reforms should permit the crude oil market to 
        operate more efficiently. We would anticipate that ANS 
        crude oil will continue to be made available to West 
        Coast refineries, but that the price would adjust to 
        prevailing market prices. We believe that the abundant 
        worldwide supply of crude oil will ensure that prices 
        for ANS crude sold to U.S. refiners will not rise above 
        world market levels. Nevertheless, those refiners must 
        be protected from diversions of needed ANS crude stocks 
        to overseas markets as a result of market-distorting 
        pricing and supply behavior. If evidence of such 
        behavior develops--such as sustained crude supply 
        shortages on the West Coast or price increases 
        significantly above world market levels--appropriate 
        enforcement action should be taken, including the 
        denial or suspension of crude oil export licenses. We 
        are prepared to track petroleum market and refining 
        activities in the period following Congressional 
        modification of the ban. To further ensure that the 
        West Coast refiners maintain access to adequate 
        supplies of oil, including ANS crude oil, at world 
        market prices, any legislation should give the 
        President authority to impose such terms and conditions 
        as are necessary or appropriate.
         5. Any export of ANS crude oil made pursuant to this 
        bill should be approved and administered through the 
        appropriate export licensing process. This will assure 
        the monitoring and enforcement of all conditions under 
        which the exports are permitted. Any export license 
        will be processed on an expedited and user-friendly 
        process that is consistent with obligations to consider 
        environmental and energy security impacts.
    S.395 already contains provisions corresponding to the 
first and second elements on this list. In addition to these 
requirements, key factors that must be addressed as legislative 
action is pursued include:
         1. Consumer Protection.--Exports must not cause 
        substantial increases to retail gasoline or other 
        petroleum product prices. Our assessment is that the 
        product price impacts of permitting ANS crude oil 
        exports would be minimal or non-existent.
         2. Job Growth and Protection.--Any proposal to permit 
        ANS exports should reasonably be expected to expand 
        employment opportunities in the U.S. economy, without 
        causing undue job loss in sectors currently dependent 
        on ANS production and transportation.
                  Employment in the Oil Production and Refining 
                Industries.--DOE's analysis concludes that 
                permitting ANS exports would result in 
                increased oil industry employment of between 
                10,000 and 25,000 jobs.
                  Employment for U.S. Seafarers.--Reforms 
                should not transfer seafarer employment 
                opportunities abroad.
                  Employmment for U.S. Shipbuilders.--The 
                Administration is undertaking ongoing efforts 
                to enhance competitive opportunities for U.S. 
                shipyards by opening foreign markets to U.S. 
                shipbuilders. In October 1993, the Clinton 
                Administration announced a comprehensive plan 
                to strengthen the U.S. shipbuilding industry. 
                This plan includes the following elements: (1) 
                Ensuring fair international competition, (2) 
                Improving Competitiveness (through increased 
                research and development funding), (3) 
                Eliminating unnecessary government regulation, 
                (4) Financing ship sales through Title II loan 
                guarantees, and (5) Assisting international 
                marketing. Consistent with this plan, the U.S. 
                successfully negotiated a multilateral 
                agreement to eliminate foreign shipbuilding 
                subsidies and other distortive trade practices.
          3. Adherence to International Trade Commitments.--Of 
        course, any conditions imposed on exports must be 
        consistent with established U.S. international trade 
        policies. On December 21, 1994, the United States, 
        along with other major shipbuilding nations, signed an 
        agreement that requires signatories to eliminate 
        subsidies and other trade distorting measures, 
        including ``home-build'' requirements, to the 
        commercial shipbuilding and repair industry. The 
        Agreement was negotiated under the auspices of the 
        Organization for Economic Cooperation and Development 
        (OECD). The application of a home-build requirement to 
        the export of ANS crude could be challenged under the 
        terms of the Agreement. Furthermore, a home-build 
        requirement for ANS crude raises legal issues of 
        concern vis-a-vis other U.S. international trade 
        obligations. Permitting export of ANS crude oil would 
        be an important liberalization of existing trade 
        restrictions.
          We oppose any requirement that ANS oil exports be 
        carried U.S.-built vessels.
          There has been concern expressed that requiring U.S. 
        flag vessels to carry exports of ANS crude would set a 
        dangerous precedent with respect to extending cargo 
        preference in shipping trade. The Administration views 
        the requirement of flag-preference for ANS crude as 
        unique, since there is the very real danger of lost 
        seamen's jobs resulting from the displacement of 
        shipments carried in the coastwide trade. This action 
        should not be viewed as opening further possibilities 
        for cargo preference, which this Administration 
        strongly opposes.
          4. Environmental Protection.--Environmental resources 
        must be fully protected. DOE analyzed potential 
        environmental impacts of lifting the ban in our January 
        1994 study. In the course of that initial review, we 
        found no plausible evidence of any direct, negative 
        environmental impacts. There would be no need to expand 
        the Trans-Alaska Pipeline, and the number of overall 
        tanker movements in U.S. waters would be reduced. 
        Moreover, indirect effects, such as changes in 
        California refinery activity and increased California 
        production, would be strictly regulated under existing 
        regulatory regimes.
          Nonetheless, before any export of ANS crude oil is 
        permitted, an environmental assessment consistent with 
        the requirements of the National Environmental Policy 
        Act of 1970 should be undertaken.
          Legislation to permit export of ANS crude oil should 
        not be linked to a change in status of the Arctic 
        National Wildlife Refuge. The Administration has not 
        altered its opposition to exploration and development 
        of any oil resources that may be under the coastal 
        plain of the Arctic National Wildlife Refuge. Further, 
        the Refuge will continue to be managed for its wildlife 
        and wilderness values.
          5. ANS Export Policy Monitoring.--Interested parties 
        should review ANS export activities periodically. Once 
        ANS exports have begun, appropriation federal agencies 
        should consult with affected state and local 
        governments, interested industry and worker 
        representatives, and environmental organizations to 
        help ensure that the policy is implemented consistent 
        with all license terms and any other applicable energy, 
        economic, and environmental criteria.
    Mr. Chairman, I believe that S. 395, introduced by you and 
Senator Stevens, can provide a vehicle for permitting Alaskan 
North Slope crude oil exports consistent with these principles. 
We believe the bill would be substantially improved by 
requiring an appropriate environmental assessment before 
approving export activities and by providing for appropriate 
enforcement action, including revoking permission to export, in 
the event of anti-competitive behavior that injures U.S. 
industry.
    Some argue that allowing exports of ANS crude oil will 
increase product costs to consumers. We believe the export of 
ANS crude oil should not affect consumers adversely. Our 
evaluations indicated that ANS oil exports might raise the 
market prices of California and Alaskan crude oil by as much as 
$1.20 and $1.60 per barrel, respectively, or three to four 
cents per gallon. However, more than half ANA crude oil and 75 
percent of California crud oil is produced by refiners that 
process it themselves, or trade it for more convenient 
supplies. When this is taken into account, the average cost 
increase to refiners is slightly over one per gallon.
    We examined historical price movements on the West Coast 
and discovered that small movements in West Coast crude oil 
prices were much less a determinant of gasoline and diesel fuel 
prices that were prices for these products in other markets 
such as the Gulf Coast. We concluded that plentiful supplies of 
petroleum products would make it impossible for retailers to 
increase gasoline or other product prices about those market 
levels. Accordingly, we anticipate that higher refiner ANS 
crude acquisition costs will not be passed through to 
consumers. As stated earlier, we also believe that plentiful 
crude supplies will prevent refiners' crude costs from rising 
above market levels.
    Those who are concerned bout the potential environmental 
effects of permitting exports fear that ``replacement crude'' 
will be imported into environmentally fragile areas of the West 
Coast on poorly maintained foreign-flag vessels. Assuming West 
Coast refiners are willing to pay world market prices--as all 
other U.S. refiners now do--they should continue to have access 
to ANS crude. Therefore, we do not believe there will be 
significant additional shipments of crude brought into the West 
Coast, beyond quantities they currently import, as a result of 
ANS exports. In any event, any tanker traffic will of course 
have to meet rigorous national environmental safety standards, 
including Oil Pollution Act of 1990 regulations, just as they 
do now.
    In conclusion, Mr. Chairman, I want to reiterate the 
Administration's support for a policy that permits export of 
Alaskan North Slope crude oil in a manner that is consistent 
with the five principles listed above.
                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
this measure are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new matter is printed in 
italic, existing law in which no change is proposed is shown in 
roman):

                 DEPARTMENT OF ENERGY ORGANIZATION ACT

                      Public Law 95-91, as Amended

 AN ACT To establish a Department of Energy in the executive branch by 
the reorganization of energy functions within the Federal Government in 
 order to secure effective management to assure a coordinated national 
                 energy policy, and for other purposes.

    Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, That this 
Act may be cited as the ``Department of Energy Organization 
Act''.
          * * * * * * *

                   TITLE III--TRANSFERS OF FUNCTIONS

          * * * * * * *

             transfers from the department of the interior

    Sec. 302. (a)(1) There are hereby transferred to, and 
vested in, the Secretary all functions of the Secretary of the 
Interior under section 5 of the Flood Control Act of 1944, and 
all other functions of the Secretary of the Interior, and 
officers and components of the Department of the Interior, with 
respect to--
          (A) the Southeastern Power Administration;
          (B) the Southwestern Power Administration;
          [(C) the Alaska Power Administration;]
          [(D)] (C) the Bonneville Power Administration 
        including but not limited to the authority contained in 
        the Bonneville Project Act of 1937 and the Federal 
        Columbia River Transmission System Act;
          [(E)] (D) the Power marketing functions of the Bureau 
        of Reclamation, including the construction, operation, 
        and maintenance of transmission lines and attendant 
        facilities; and
          [(F)] (E) the transmission and disposition of the 
        electric power and energy generated at Falcon Dam and 
        Amistad Dam, international storage reservoir projects 
        on the Rio Grande, pursuant to the Act of June 18, 
        1954, as amended by the Act of December 23, 1963.
    (2) The Southeastern Power Administration, the Southwestern 
Power Administration, and the Bonneville Power Administration, 
[and the Alaska Power Administration] shall be preserved as 
separate and distinct organizational entities within the 
Department. Each such entity shall be headed by an 
Administrator appointed by the Secretary. The functions 
transferred to the Secretary in paragraphs (1)(A), (1)(B), 
(1)(C), and (1)(D) shall be exercised by the Secretary, acting 
by and through such Administrators. Each such Administrator 
shall maintain his principal office at a place located in the 
region served by his respective Federal power marketingP
entity.
    (3) The functions transferred in paragraphs (1)(E) and 
(1)(F) of this subsection shall be exercised by the Secretary, 
acting by and through a separate and distinct Administration 
within the Department which shall be headed by an Administrator 
appointed by the Secretary. The Administrator shall establish 
and shall maintain such regional offices as necessary to 
facilitate the performance of such functions. Neither the 
transfer of functions effected by paragraph (1)(E) of this 
subsection nor any changes in cost allocation or project 
evaluation standards shall be deemed to authorize the 
reallocation of joint costs of multipurpose facilities 
theretofore allocated unless and to the extent that such change 
is hereafter approved by Congress.

                            [PUBLIC LAW 322

                                [AN ACT

 [To authorize the Secretary of the interior to Investigate and report 
  to the Congress on projects for the conservation, development, and 
             utilization of the water resources of Alaska.

    [Be it enacted by the Senate and House of Representatives 
of the United States of America in Congress assembled, That, 
for the purpose of encouraging and promoting the development of 
Alaska, the Secretary of the Interior (hereinafter referred to 
as the ``Secretary'') is authorized to make investigations of 
projects for the conservation, development, and utilization of 
the water resources of Alaska and to report thereon, with 
appropriate recommendations, from time to time, to the 
President of the Congress.
    [Sec. 2. Prior to the transmission of any such report to 
the Congress, the Secretary shall transmit copies thereof for 
information and comment to the Governor of Alaska, or to such 
representative as may be named by him, and to the heads of 
interested Federal departments and agencies. The written views 
and recommendations of the aforementioned officials may be 
submitted to the Secretary within ninety days from the day of 
receipt of said proposed report. The Secretary shall 
immediately thereafter transmit to the Congress, with such 
comments and recommendations as he deems appropriate, his 
report, together with copies of the views and recommendations 
received from the aforementioned officials. The letter of 
transmittal and its attachments shall be printed as a House or 
Senate document.
    [Sec. 3. There are hereby authorized to be appropriated not 
more than $250,000 in any one fiscal year.]
                  PUBLIC LAW 93-153--NOVEMBER 19, 1973

 AN ACT To amend section 28 of the Mineral Leasing Act of 1920, and to 
     authorize a trans-Alaska oil pipeline, and for other purposes.

                        Section 203 of that Act

    Sec. 203. Authorization for Construction.
          * * * * * * *
    ``(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 Oil 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.''.
                        Section 410 of that Act

    The Congress [declares] 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.

                PUBLIC LAW NO 94-163--DECEMBER 22, 1975

   AN ACT To increase domestic energy supplies and availability; to 
  restrain energy demand; to prepare for energy emergencies; and for 
                            other purposes.

          * * * * * * *

                       Section 103(f) of that Act

    (f) Quarterly Reports to Congress.--The President shall 
submit quarterly reports to Congress concerning the 
administration of this section and any findings made pursuant 
to subsection (a) or (b) of this section. 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.