House Ends Ban on Oil Exports From Alaska’s North Slope

The House voted Wednesday to end the 22-year ban on the export of Alaska North Slope oil, a step toward making nearly a quarter of U.S. oil production available for overseas sales.

The measure is unlikely to affect the supply of oil to California, which depends on Alaskan production for about 45% of its oil.

Oil industry officials said that the measure was primarily intended to benefit British Petroleum Co., which owns about half of the oil production from Prudhoe Bay, the North Slope’s largest field. BP has few West Coast refineries to which to send the crude oil, and has been pushing for permission to export it to Asia.

In contrast, Atlantic Richfield Co., which owns about 22% of the field’s production, sends all of the oil it produces to its two West Coast refineries, with little to spare. Consequently, Los Angeles-based Arco has no plans to export any of its North Slope production, spokesman Al Greenstein said Wednesday.

The bill, approved on a 289-134 vote, adopts the main provisions of a Senate version passed in May and accepted by a House-Senate conference. Senate approval of the compromise is needed, then it would be sent to President Clinton, who supports the measure.

In a concession to oil producers, the bill also waives for five years royalties on deep-water oil and gas leases in the Gulf of Mexico. It also provides for the sale of the Alaska Power Administration.

Rep. George Miller (D-Martinez) called that provision a “raid on the taxpayers of this country to provide a benefit to some of the wealthiest companies in this country that they do not need.”

The oil export issue is separate from a highly controversial proposal to open the Arctic National Wildlife Refuge in northern Alaska to drilling. There has been some criticism, however, that if the refuge should be opened for oil development, some--or all--of that oil might now be exported.

“Finally, after more than 20 years, we have decided that perhaps to a small measure economics ought to dictate what we do in the oil industry,” Rep. Bill Thomas (R-Bakersfield) said.

Congress imposed the export ban in 1973 when an embargo by the Organization of Petroleum Exporting Countries, sparked by the Arab-Israeli war, caused fuel shortages in the United States.

The United States continues to rely on foreign oil for about 50% of total consumption, but much of that comes from friendly European and Western Hemisphere countries, and the government has built up large reserves to protect the nation from shortages.

An Energy Department study last year estimated that allowing exports of Alaska oil to Japan, South Korea and other Asian countries could generate as much as $180 million a year in federal tax revenues and increase U.S. oil production by as much as 110,000 barrels a day.

Rep. Don Young (R-Alaska) said the opening of the export market could produce 25,000 jobs in his state. Oil production in Alaska has declined in recent years because the long shipping distances, lower competitiveness in East Coast markets and a glut in the main Alaska markets, the West Coast and Hawaii.

The waiver on royalties for Gulf of Mexico deep-water leases, attached to the bill in the Senate, engendered more controversy, with opponents saying it was a gift to big oil companies that would cost taxpayers hundreds of millions of dollars.

Rep. Joe Scarborough (R-Florida) complained that “it is a perversion of Republican ideas to push for” such a break for big business.