EXPORT OF ALASKAN OIL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00759R000200210014-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: November 17, 2010
• Sequence Number: 14
• Publication Date: February 13, 1984
• Content Type: REPORT

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summary
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ATTACHMENT B
EXPORT OF ALASKAN OIL
At the present time the State of Alaska is effectively precluded by law from exporting Alaskan North Slope (ANS) oil. State royalty
oil is subject to the same export control laws which govern other
Alaskan oil production. If the State were able to acquire Cook
Inlet oil (and assuming the correctness of our informatioontt(at
most of that oil does not cross a Mineral Lands Leasing
?28(u) right-of-way). Scchlcan e rvation exported
Aca (EPCA) ?103(b) f the
President's Energy Policy and Conse
finding that the export would be consistent with the national
interest and consistent with the purposes of the EPCA. However,
it first would be nees~erulationsntotallowmsucheeDports~ent's
"Short Supply Control" g
Statutory and Regulatory Background on Export of Alaska
There are several statutory provisions which mayrestrict thethe
exportation of Alaskan crude oil, depending ot the e origin of of
teal
oil and whether,it is transported by pipeline
rights-of-way:
1. Section 7(d) of the Export Administration Act (EAA), as
amended by the Trans-Alaska Pipeline Authorization Act
(TAP Act), essentially forbids the export of ANS crude
oil transported through the Trans-Alaskan Pipeline unless
the President finds that within three months an equal amount
lower
of imports received in exchange for the ANS
U-.S. refiner acquisition costs, and 75 percent
s.ivings will be reflected in wholesale and retail prices
cE the resulting products. Also, the statute provides
that the President must report his findings to the Congress,
and within 60 days Congress must pass a concurrent
resolution of approval.
2. Section 203(c) of the TAP Act has the effect of making
?28(u) of the MLLA applicable to ANS oil, subjecting it
to the EAA's requirements and necessitating a Presidential
finding that the exports will not diminish the total quan-
tity or quality of oil available to the U.S. and are in
the national interest. The statute provides that the
President must report his findings to Congress; if within
60 days Congress passes a concurrent rsolution of dis-
approval, further exports are prohibited.
3. Section 103(b) of the EPCA requires the President to
promulgate an export control regulation, under which
he may permit crude oil exports if he determines that
such exports are coistentewithAthe national interest
and with the purposes
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4. Finally, under the Outer Continental Shelf Lands Act, any
oil produced from the OCS may be exported only on., the basis
of a published Presidential finding that such exports will
not increase reliance on imported oil or gas, are in the
national interest, and are in accord with the EAA.
The first two of these provisions involve Congressional approval or
veto provisions which are affected by the Supreme Court's recent
decision in I.N.S.- v. Chadha, holding unconstitutional a one-House
veto.
The effect of the Chadha decision on MLLA ?28(u) would appear to
be that the objectionable Congressional review provision does not
affect the remainder of ?28(u), which can be read as surviving
intact, so that the Presidential finding would not be subject to
a resolution of disapproval. However, the language of EAA ?7(d)
and its legislative history raise the possibility that the Con-
gressional review provision of that section cannot be severed from
the statute's language authorizing export of Alaskan oil on the
basis of the President's finding; in that case, Chadha has the
effect of turning ?7(d) into an absolute prohibition on export
of ANS oil. Of course, this is conjectural, and at this point
it cannot be stated definitively what effect Chadha has had on
permitting exports of Alaskan oil.
In addition to these statutory provisions, the Commerce Department
has adopted "Short Supply Control" regulations under the EAA. These
regulations impose strict limits on the export of any crude oil, but
the EAA allows them to be amended without following the procedures
prescribed in the Administrative Procedure Act.
Discussion
The State of Alaska receives royalties both on ANS crude oil and
on a smaller volume of non-ANS production (principally Cook Inlet).
The State might try to swap ANS for Cook Inlet production, and
export the latter. At present, however, the export of ANS oil by
the State is effectively precluded by EAA ?7(d).
Cook Inlet production, approximately 70,000 bpd, is not subject to
EAA ?7(d) because that oil is not transported through the Tran.s-
Alaska Pipeline, nor is it subject to the OCS Act export restrictions.
Whether such production is subject to MLLA ?28(u) depends'on whether
the oil transits a ?28(u) pipeline; reportedly, most of it does not,
but this must be verified. The EPCA's required finding is not
viewed as a serious obstacle to export, if the policy decision is
in favor of export. Therefore, it appears that the export of Cook
Inlet oil is not prohibited by statute, and could be accomplished
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on the basis of amendments to the Commerce Department's regulations.
This possibility has not yet been discussed with the Commerce Depart-
ment; among other things, it remains to determine whether an
environmental impact statement or environmental assessment would
be necessary in this connection, although the former seems quite
unlikely.
Also, while the focus here is on the legal issues concerning export,
it should be noted that the current producers and refiners of this
oil may not be anxious to release it for export. This production
is a very sweet, low sulfur crude (35 degrees API, 0.1 percent
sulfur). Union is refining about 30,000 bpd in San Francisco
for lube oils and waxes, and a major retrofit would be necessary
to substitute ANS crude. Tesoro uses the other 40,000 at their
Nikiski refinery and is planning a switch to ANS crude, pending
negotiations with the State of Alaska for royalty oil; but this
is planned over a period of two years and some retrofit of the
refinery also is.needed.
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