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Oil Exports

Until 1995, Alaska North Slope crude could not be legally exported, and the export ban contributed to a West Coast oil glut, reducing the price received by North Slope producers. Oil is exported from other oil-producing states with no prohibitions, however. Since mid-2000, no oil has been exported to foreign countries from Alaska.

Myths of ANWR

I n 1980, the 1.5 million acre Coastal Plain of the Arctic National Wildlife Refuge was specially designated by Congress for further study of its oil and gas potential. Much of the rest of ANWR’s 19 million acres is already designated as Wilderness.

Groups seeking to stop oil exploration in Alaska want to designate the Coastal Plain as Wilderness (half of ANWR is for-mally designated Wilderness now), and present several misleading arguments:

Here are the “myths” being told about ANWR, and the truth:

*Myth: All of Alaska’s Arctic coast is open to oil and gas development.

Reality: With the exception of the area between the Colville and Canning Rivers (which is owned by the state of Alaska) none of the more than 1000 miles of Arctic Alaska coastline is open to oil and gas leasing, not one mile of it.

*Myth: The state of Alaska will get 90 percent of any royalties from oil production in ANWR’s Coastal Plain.

Reality: The federal government won litigation in the Supreme Court of the United States which allows congress to determine the share of revenues with the State of Alaska. Congress wants 50/50.

*Myth: Alaska’s indigenous people are against oil exploration in the Coastal Plain.

Reality: Alaska’s Inupiat Eskimo people, who live on the North Slope (one village, Kaktovik, is the only community within ANWR) strongly support onshore oil and gas exploration in the Coastal Plain, and elsewhere on the North Slope. Some of the Gwichins, who live 150 miles south of the Coastal Plain, are opposed to development. The Gwichins leased their own lands for oil exploration, but no oil was found. Now they oppose the Inupiats having the same rights to explore.

*Myth: We need to save ANWR’s oil for our grandchildren.

Reality: It will supply our children and grandchildren. If the Coastal Plain was opened today it would be 7 to 10 years, and possibly longer, before the first oil reached American consumers. Oil from the Coastal Plain will supply America in a time when oil from foreign sources will certainly be more expensive and in shorter supply than today.

*Myth: The Coastal Plain may have only a 200 day supply of oil. That is not worth developing.

Reality: A 200 day supply is almost 4 billion barrels. The Coastal Plain probably contains much more oil, but it can be produced at a maximum rate of 2 million barrels per day (capacity of the trans-Alaska oil pipeline).

Therefore, it could last for 25 years, and probably much longer.

Don’t be misled!

*Myth: Development of the Coastal Plain will destroy the caribou.

Reality: The same claim was made about the trans-Alaska pipeline more than 2 decades ago, but today North Slope cari-bou herds along the pipeline and near the North Slope oil fields are thriving.

*Myth: ANWR’s oil will be exported, and will not reduce our dependency on foreign oil. Reality: Since May 2000 no oil from the North Slope has been exported. Exports can be stopped by a Presidential order. The U.S. exports advanced technolo-gies, much more valuable and unique than oil. Few object to that.

*Myth: Alaskan oil development is environmentally damaging.

Reality: The North Slope’s petroleum industry is the cleanest, most technologically advanced and most heavily regulated in the world. Facilities are designed for minimal environmental impact.

*Myth: The Coastal Plain is unspoiled wilderness, an Arctic Serengeti.

Reality: This is no Serengeti. The Coastal Plain is a frozen, barren land for 9 months of the year. The Inupiat people have lived and hunted there for centuries; 19th century whalers hunted extensively for food; military and defense contractors built DEWline radar sites; recreation groups use it for rafting and hiking. Other areas of the North Slope are more biologically sensitive than the Coastal Plain.

BP Amoco Suspending Crude Oil Exports From Alaska in Favor of West Coast Refiners

The Bureau of National Affairs Daily Report for Executives

March 29, 2000 - BP Amaco is suspending foreign exports of Alaskan crude oil, the company said in a March 23 letter to the House Resource Committee Chairman Don Young (R-Alaska).

Instead, the company will use all of the Alaskan oil at West Coast refineries operated by the Atlantic Richfield Co. once it acquisition of ARCO is completed, the letter said.

Several West Coast members of Congress have called for reinstating a ban on exports of Alaskan crude oil in light of gasoline prices that have approached $2 per gallon. While gasoline prices have risen nationwide in response to crude oil production restrictions imposed by the Organization of Petroleum Exporting Countries, the West Coast has been hit especially hard because sources of crude oil are more limited there.

Congress lifted the ban on exporting Alaskan crude oil in 1995.

Resources Committee spokesperson Steve Hansen said he doubted the additional Alaskan crude oil would make much of a difference on the West Coast. The action by BP Amoco will bring an additional 56,000 barrels daily to the West Coast, Hansen said, but California oil producers export about 59,000 barrels of oil per day to Asia.

Hansen said that Alaskans have opposed an export ban because it restricts markets for the state's oil. No other state has had an export ban imposed on its crude oil, Hansen said. In addition, West Coast refineries cannot handle all of the oil Alaska produces, he said.

Hansen noted that the Clinton administration supported lifting the ban in 1995.

Rep. George Miller (D-Calif.), the committee's ranking Democrat, praised the BP Amoco letter, "At this critical time of record high oil prices and tight supplies from foreign producers, it does not make sense to sell precious domestically produced oil overseas, further compounding our energy shortage and the serious impacts on consumers," Miller said March 23.

BP Amoco's bid to acquire ARCO received a significant boost March 15 when the Federal Trade Commission announced it was dropping a lawsuit to halt the deal.

The FTC opposed the deal because it said BP Amoco's acquisition of ARCO's Alaskan oil assets would give it control over too much of the state's oil production. The FTC dropped its objections after ARCO announced it was selling its Alaskan assets to Phillips Petroleum Co.

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