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104th Congress                                           Rept. 104-139,
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     Part 1
_______________________________________________________________________


 
                   EXPORTS OF ALASKAN NORTH SLOPE OIL

_______________________________________________________________________


 June 15, 1995.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

                         [To accompany H.R. 70]

      [Including cost estimate of the Congressional Budget Office]
    The Committee on Resources, to whom was referred the bill 
(H.R. 70) to permit exports of certain domestically produced 
crude oil, and for other purposes, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. EXPORTS OF ALASKAN NORTH SLOPE OIL.

  Section 28 of the Mineral Leasing Act (30 U.S.C. 185) is amended--
          (1) by amending subsection (s) to read as follows:
                  ``exports of alaskan north slope oil
  ``(s)(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 
section 203 of the Trans-Alaska Pipeline Authorization Act (43 U.S.C. 
1652) may be exported 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;
          ``(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 the 
        enactment of this subsection; and
          ``(C) shall consider whether anticompetitive activity by a 
        person exporting crude oil under authority of this subsection 
        is likely to cause sustained material crude oil supply 
        shortages or sustained crude oil prices significantly above 
        world market levels that would cause sustained material adverse 
        employment effects in the United States or that would cause 
        substantial harm to consumers in noncontiguous States.
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 with which the 
United States entered into a bilateral international oil supply 
agreement before November 26, 1979, or to a country pursuant to the 
International Emergency Oil Sharing Plan of the International Energy 
Agency, any oil transported by pipeline over a right-of-way granted 
pursuant to section 203 of the Trans-Alaska Pipeline Authorization Act 
(43 U.S.C. 1652) 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, in consultation with the Secretary 
of Energy, may recommend to the President appropriate action against 
such person, which may include modification of the authorization to 
export crude oil.
  ``(6) Administrative action under this subsection is not subject to 
sections 551 and 553 through 559 of title 5, United States Code.''; and
          (2) by striking subsection (u).

SEC. 2. GAO REPORT.

  (a) Review.--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 and in Hawaii. The Comptroller General shall commence this 
review two years after the date of enactment of this Act and, within 
six months after commencing the review, shall provide a report to the 
Committee on Energy and Natural Resources of the Senate and the 
Committee on Resources of the House of Representatives.
  (b) Contents of Report.--The report shall contain a statement of the 
principal findings of the review and recommendations for Congress and 
the President to address job loss in the shipbuilding and ship repair 
industry on the West Coast, as well as adverse impacts on consumers and 
refiners in Hawaii, that the Comptroller General attributes to Alaska 
North Slope crude oil exports.
                          Purpose of the Bill

    The purpose of H.R. 70 is to permit exports of certain 
domestically produced crude oil.

                  Background and Need for Legislation

    In 1973, contemporaneously with the Arab-Israeli War and 
the first oil embargo, Congress adopted the Trans-Alaska 
Pipeline Authorization Act, which authorized construction of a 
pipeline to move the oil from Alaska's North Slope to an 
accessible port at Valdez, Alaska. The legislation also 
established export restrictions on all domestically produced 
crude oil carried over a Federal right-of-way by adding a new 
section 28(u) to the Mineral Leasing Act (MLA). As amended, the 
MLA permitted exports of domestically produced crude oil--
including Alaskan North Slope (ANS) crude oil--only 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 licensing provisions of the Export 
Administration Act of 1969.
    In 1979, following the second major oil shock, Congress 
effectively banned exports of ANS crude oil. Today, ANS crude 
oil is the only domestically produced crude oil subject to an 
export ban. As a result, Alaska--the largest oil producing 
State in the nation--is the only one subject to an export ban.
    The world oil situation has changed fundamentally since the 
1970s when the United States faced continuing supply threats. 
In 1973, for example, Middle East countries 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 and energy demand appeared to be growing 
geometrically. The enormously flexible U.S. economy, however, 
reacted to the anticipated shortage through rapid gains in 
energy efficiency. Net imports of oil actually declined between 
1978 and 1993. Not until last year did imports surpass the 
previous all-time high, principally as a result of falling 
domestic oil production.
    At the same time that demand pressure moderated, world 
crude oil supplies greatly expanded and diversified. The United 
States established a Strategic Petroleum Reserve, which today 
contains nearly 600 million barrels of crude. Moreover, a 
pronounced shift towards more reliable sources of supply 
occurred. The United States, for example, no longer imports any 
crude oil from Iran, Iraq or Libya. Today, Canada and Mexico 
are among our largest suppliers. In short, the United States no 
longer faces the supply threats that it faced in the 1970s.
    Today, approximately 1.6 million barrels of crude oil are 
carried daily through the Trans-Alaska Pipeline System. The 
majority of oil is carried by tanker to the West Coast and 
Hawaii. With the ban in place, the surplus must be delivered to 
the Gulf Coast, the Midwest, and the Virgin Islands. The added 
cost of moving the oil this considerable distance reduces the 
net payback to producers in Alaska. The export ban also creates 
a glut on the West Coast market, depressing the price of ANS 
crude and heavy oil produced in California. Although not 
intended, the export restrictions have actually reduced 
domestic production by discouraging production in Alaska and 
California.
    North Slope production has now entered a period of 
sustained decline. As a result, many of the tankers built at 
considerable expense to carry the oil to market are laid up or 
headed for the scrap heap. With increased production in Alaska 
and California, these militarily useful tankers would have new 
employment opportunities, as would the skilled mariners who 
crew the vessels. Moreover, shipbuilding and ship repair yards 
on the West Coast would have new business opportunities.
    In an effort to ascertain whether authorizing ANS exports 
would be in the national interest and to quantify the benefits 
(as well as possible costs) of lifting the ban, the Department 
of Energy conducted, in June 1994, a comprehensive study and 
issued a report. In ``Exporting Alaskan North Slope Crude Oil--
Benefits and Costs,'' the Department concluded that ``there 
would be a significant number of benefits from allowing the 
export of ANS crude.'' By the end of the decade, those benefits 
would include: increasing domestic oil production by up to 
110,000 barrels per day, creating up to 25,000 oil industry 
related-jobs, preserving as many as 3,300 direct and indirect 
maritime jobs, and raising approximately $2 billion in Federal 
and State revenues. The Department concluded that ``[l]ittle, 
if any, increase in consumer petroleum prices would be likely'' 
and stated that ``[n]o significantly negative environmental 
implications were found.'' The Department specifically found 
that ``[l]ifting the ban will reduce overall tanker movements 
in U.S. waters.'' The Department, however, did find that 
independent refiners on the West Coast were expected to incur 
slightly higher crude oil acquisition costs as the West Coast 
surplus eased.
    The Committee concurs with the Department's findings with 
respect to West Coast refiners. These refiners often purchase 
ANS crude on the spot market, below world market prices, at as 
much as a $3 per barrel discount and do not pass the savings on 
to consumers. The Committee, therefore, does not feel that it 
is inappropriate that West Coast refiners incur higher crude 
oil acquisition costs.
    In the view of the Committee, the ban no longer makes 
sense. By authorizing exports, Congress could spur domestic 
energy production, create or preserve jobs, help maintain an 
independent tanker fleet essential to national defense, raise 
State and Federal revenues, and reduce our nation's net 
dependence on imports. The Committee believes exports of ANS 
crude are in the national interest. The Committee therefore 
urges the President to make the required findings and his 
national interest determination as quickly as possible 
following enactment of the legislation.

                            Committee Action

    H.R. 70 was introduced on January 4, 1995, by Congressmen 
Thomas, Young of Alaska, Rohrabacher, Doolittle, Dooley, 
Gallegly, and Archer. The bill was referred to the Committee on 
Resources. On May 9, 1995, the Committee held a hearing on H.R. 
70, at which Congressman Thomas, the Administration, the State 
of Alaska, oil producers, maritime labor, and others testified 
in favor of the bill. Representatives of independent refiners, 
shipbuilders, and a refinery union testified in opposition. In 
expressing general support for the bill, the Administration 
indicated that it should be amended (1) to provide for an 
appropriate environmental review; (2) to allow the Secretary of 
Commerce to sanction any anti-competitive behavior by 
exporters; and (3) to establish a licensing system.
    On May 17, 1995, the Full Resources Committee met to mark 
up H.R. 70. An amendment in the nature of a substitute was 
offered by Congressman Dooley and Tauzin. Eight amendments were 
offered to the amendment in the nature of a substitute.
    By voice vote, the Committee adopted an amendment offered 
by Congressman Abercrombie that would require the President, in 
making his national interest determination, to consider whether 
anti-competitive activity by a person exporting ANS crude oil 
is likely to cause sustained material crude oil supply 
shortages or sustained crude oil prices significantly above 
world market levels that would cause sustained material adverse 
employment effects in the United States or that would cause 
substantial harm to consumers in noncontiguous States. The 
Committee is sensitive to concerns that consumers in Hawaii 
might face slightly higher gasoline prices. The Committee 
therefore felt it appropriate to require the President to 
undertake this analysis prior to making his national interest 
determination.
    By a voice vote, the Committee adopted an amendment offered 
by Congresswoman Smith of Washington to require the Comptroller 
General to conduct a study to review energy production in 
California and Alaska as well as the effects of ANS exports, if 
any, on consumers, independent refiners, shipbuilding and ship 
repair yards on the West Coast and in Hawaii. Based on the 
testimony received at the hearing, the Committee is of the view 
that enactment of the bill is likely to provide more ship 
building and repair work than would be lost with declining ANS 
production. Recognizing the concern in particular of Members 
from the Pacific Northwest and Hawaii, the Committee felt it 
important that an independent examination be conducted, but not 
until the market has had a reasonable opportunity to adjust to 
exports.
    Congressman Miller of California, Congressman Metcalf, and 
Congressman Abercrombie offered an amendment that would have 
required additional licensing procedures and conditions. 
Congressman Vento offered an amendment which would have 
required a formal environmental impact statement be completed 
before exports occurred. Congressman Abercrombie offered an 
amendment which would have explicitly required the use of U.S.-
built vessels to carry ANS exports. All three amendments failed 
on a voice vote. In addition, Congressmen Miller of California, 
Metcalf and Abercrombie offered an amendment which would have 
imposed a volume limitation on exports. The amendment was 
defeated by a rollcall vote of 11-24, as follows:

                    h.r. 70--miller amendment no. 1

----------------------------------------------------------------------------------------------------------------
                             Yeas      Nays     Present                               Yeas      Nays     Present
----------------------------------------------------------------------------------------------------------------
Mr. Young (Chairman).....  ........        X   ........  Mr. Miller...............        X   ........  ........
Mr. Hansen...............  ........        X   ........  Mr. Rahall...............  ........  ........  ........
Mr. Saxton...............  ........        X   ........  Mr. Vento................        X   ........  ........
Mr. Gallegly.............  ........        X   ........  Mr. Kildee...............        X   ........  ........
Mr. Duncan...............  ........  ........  ........  Mr. Williams.............  ........  ........  ........
Mr. Hefley...............  ........        X   ........  Mr. Gejdenson............        X   ........  ........
Mr. Doolittle............  ........        X   ........  Mr. Richardson...........  ........        X   ........
Mr. Allard...............  ........        X   ........  Mr. DeFazio..............        X   ........  ........
Mr. Gilchrest............  ........        X   ........  Mr. Faleomavaega.........        X   ........  ........
Mr. Calvert..............  ........        X   ........  Mr. Johnson..............  ........  ........  ........
Mr. Pombo................  ........        X   ........  Mr. Abercrombie..........  ........  ........  ........
Mr. Torkildsen...........  ........        X   ........  Mr. Studds...............  ........        X   ........
Mr. Hayworth.............  ........        X   ........  Mr. Tauzin...............  ........        X   ........
Mr. Cremeans.............  ........        X   ........  Mr. Ortiz................  ........        X   ........
Mrs. Cubin...............  ........        X   ........  Mr. Dooley...............  ........        X   ........
Mr. Cooley...............  ........  ........  ........  Mr. Romero-Barcelo.......  ........  ........  ........
Mrs. Chenoweth...........        X   ........  ........  .........................  ........  ........  ........
Mrs. Smith...............        X   ........  ........  Mr. Hinchey..............        X   ........  ........
Mr. Radanovich...........  ........  ........  ........  Mr. Underwood............  ........        X   ........
Mr. Jones................  ........        X   ........  Mr. Farr.................        X   ........  ........
Mr. Thornberry...........  ........        X   ........  .........................  ........  ........  ........
Mr. Hastings.............  ........        X   ........  .........................  ........  ........  ........
Mr. Metcalf..............        X   ........  ........  .........................  ........  ........  ........
Mr. Longley..............  ........  ........  ........  .........................  ........  ........  ........
Mr. Shadegg..............  ........        X   ........  .........................  ........  ........  ........
                                                               Total..............       11        24   ........
----------------------------------------------------------------------------------------------------------------

    Congressman Miller also offered an amendment which would 
have required the Secretary of the Interior to certify that 
potential exporters were in compliance with a certain right-of-
way agreement. This amendment also failed on a rollcall vote of 
11-28, as follows:

                    h.r. 70--miller amendment no. 7

----------------------------------------------------------------------------------------------------------------
                             Yeas      Nays     Present                               Yeas      Nays     Present
----------------------------------------------------------------------------------------------------------------
Mr. Young (Chairman).....  ........        X   ........  Mr. Miller...............        X   ........  ........
Mr. Hansen...............  ........        X   ........  Mr. Rahall...............        X   ........  ........
Mr. Saxton...............  ........        X   ........  Mr. Vento................        X   ........  ........
Mr. Gallegly.............  ........        X   ........  Mr. Kildee...............        X   ........  ........
Mr. Duncan...............  ........  ........  ........  Mr. Williams.............  ........  ........  ........
Mr. Hefley...............  ........        X   ........  Mr. Gejdenson............        X   ........  ........
Mr. Doolitte.............  ........        X   ........  Mr. Richardson...........  ........        X   ........
Mr. Allard...............  ........        X   ........  Mr. DeFazio..............        X   ........  ........
Mr. Gilchrest............  ........        X   ........  Mr. Faleomavaega.........        X   ........  ........
Mr. Calvert..............  ........        X   ........  Mr. Johnson..............  ........  ........  ........
Mr. Pombo................  ........        X   ........  Mr. Abercrombie..........        X   ........  ........
Mr. Torkildsen...........  ........        X   ........  Mr. Studds...............  ........        X   ........
Mr. Hayworth.............  ........        X   ........  Mr. Tauzin...............  ........        X   ........
Mr. Cremeans.............  ........        X   ........  Mr. Ortiz................  ........        X   ........
Mrs. Cubin...............  ........        X   ........  Mr. Dooley...............  ........        X   ........
Mr. Cooley...............  ........        X   ........  Mr. Romero-Barcelo.......  ........  ........  ........
Mrs. Chenoweth...........  ........        X   ........  .........................  ........  ........  ........
Mrs. Smith...............  ........        X   ........  Mr. Hinchey..............        X   ........  ........
Mr. Radanovich...........  ........  ........  ........  Mr. Underwood............        X   ........  ........
Mr. Jones................  ........        X   ........  Mr. Farr.................        X   ........  ........
Mr. Thornberry...........  ........        X   ........  .........................  ........  ........  ........
Mr. Hastings.............  ........        X   ........  .........................  ........  ........  ........
Mr. Metcalf..............  ........        X   ........  .........................  ........  ........  ........
Mr. Longley..............  ........        X   ........  .........................  ........  ........  ........
Mr. Shadegg..............  ........        X   ........  .........................  ........  ........  ........
                                                               Total..............       11        28   ........
----------------------------------------------------------------------------------------------------------------

    Finally, Congressman Farr offered an amendment extending an 
outer continental shelf oil and gas leasing moratorium off the 
coast of California. This amendment was ruled nongermane.
    By voice vote, the Committee then adopted the Dooley-Tauzin 
amendment in the nature of a substitute, as amended. An 
explanation of the amendment in the nature of a substitute is 
set forth in the section-by-section analysis.
    The bill as amended was then ordered favorably reported, by 
a voice vote, to the House of Representatives, in the presence 
of a quorum.

                      Section-by-Section Analysis

             section 1. exports of alaskan north slope oil

    Section 1 of the bill would amend section 28 of the Mineral 
Leasing Act to authorize ANS oil exports unless the President, 
within a prescribed period of time, deemed them not to be in 
the national interest.
    Under this section, ANS oil exports would be authorized, 
unless the President determined (within five months of the date 
of enactment) that they were not in the national interest. 
Before making his national interest determination, the 
President would be required to complete an appropriate 
environmental review (within four months of enactment). 
Consistent with the original 1973 legislation, the President 
also would be required to determine that exports would not 
diminish the total quantity or quality of petroleum available 
to the United States. In making his national interest 
determination, the President could impose terms and conditions, 
other than a volume limitation, on the exports. The Secretary 
of Commerce then would be required, within 30 days, to issue 
any rules necessary to implement the President's national 
interest determination.
    This section requires, with limited exceptions, that ANS 
oil exports be carried on U.S.-flag and U.S.-owned vessels. The 
only exceptions would be exports to Israel and to a country 
pursuant to the International Emergency Oil Sharing Plan of the 
International Energy Agency.
    This section further preserves the authority of the 
President to prohibit ANS exports in an emergency.
    The Secretary of Commerce is directed to issue any rules 
necessary to govern ANS exports within 30 days of the 
President's national interest determination.
    This section provides that, if the Secretary of Commerce 
later finds that anti-competitive activity by an exporter has 
caused sustained material oil shortages or sustained prices 
significantly above the world level and that the shortages or 
high prices had caused sustained material job losses, the 
Secretary could recommend appropriate action to the President 
against the exporter, including modification of the authority 
to export.
    This section provides that administrative action would not 
be subject to notice and comment rulemaking requirements or 
other requirements of the Administrative Procedures Act.

                          section 2. gao study

    Section 2 of the bill would require a Government Accounting 
Office report analysing the effects of ANS exports, if any, on 
consumers, independent refiners, shipbuilding and ship repair 
on the West Coast and in Hawaii, to be submitted 2\1/2\ years 
after the date of enactment.

            Committee Oversight Findings and Recommendations

    With respect to the requirements of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives, and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee on Resources' oversight findings and 
recommendations are reflected in the body of this report.

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that the 
enactment of H.R. 70 will have no significant inflationary 
impact on prices and costs in the operation of the national 
economy.

                        Cost of the Legislation

    Clause 7(a) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs which would be incurred in carrying out 
H.R. 70. However, clause 7(d) of that Rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act of 1974.

                     Compliance With House Rule XI

    1. With respect to the requirement of clause 2(l)(3)(B) of 
rule XI of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, H.R. 70 
does not contain any new budget authority, spending authority, 
credit authority, or tax expenditures. The bill will increase 
revenues to the Federal Government by estimated $50 million 
over the next five years.
    2. With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 70.
    3. With respect to the requirement of clause 2(l)(3)(C) of 
rule XI of the Rules of the House of Representatives and 
section 403 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 70 
from the Director of the Congressional Budget Office.

               Congressional Budget Office Cost Estimate
                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 24, 1995.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 70, a bill to permit exports of certain 
domestically produced crude oil, and for other purposes, as 
ordered reported by the House Committee on Resources on May 17, 
1995. We estimate that enacting this bill would reduce federal 
outlays by about $50 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 in certain regions. Administrative 
provisions in the bill are expected to involve costs of less 
than $1 million over the 1996-2000 period, subject to the 
availability of appropriated funds.
    Because H.R. 70 would affect direct spending by increasing 
offsetting receipts, the bill would be subject to pay-as-you-go 
procedures.

Bill purpose

    H.R. 70 would amend the Mineral Leasing Act to allow 
exports of Alaskan North Slope (ANS) oil under certain 
conditions. No later than five months after enactment of the 
bill, the President would have to determine whether such 
exports are in the national interest based on a review of 
market factors, employment impacts, and environmental 
considerations. An environmental review of such exports would 
have to be completed within four months after enactments. 
Within 30 days after a presidential determination that ANS oil 
exports are in the national interest, the Secretary of Commerce 
would have to issue rules necessary for such exports. Any oil 
exported would have to be transported by vessels documented 
under the laws of the United States and owned by a U.S. citizen 
(unless subject to other international oil supply agreements).
    The bill also includes provisions regarding potential 
market impacts of ANS oil exports. Within two years after 
enactment, the General Accounting Office (GAO) would have to 
review the effects of such exports on consumers, independent 
refiners, and shipbuilding and ship repair yards on the West 
Coast and Hawaii. The bill also would authorize the Secretary 
of Commerce to recommend that the President take actions to 
address anticompetitive activities if they caused sustained 
adverse effects on employment in the United States.
    For the purposes of this estimate, CBO assumes that H.R. 70 
will be enacted by July 1, 1995, that the President will decide 
in favor of allowing ANS exports, and that the presidential 
determination will be completed within the time specified in 
the bill. Under these assumptions, exports could commence 
within six months after the bill is enacted.

Federal budgetary impact

    If 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, 
we estimate that this reduction in supply would increase the 
price of oil paid to producers 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 increases while ANS oil production 
decreases.
    Higher West Coast oil prices would produce additional 
income to the federal government from the sale of oil from 
federally owned reserves and from royalties on federal leases. 
About two-thirds of the estimated $50 million increase in 
receipts over the 1996-2000 period (or $33 million) would be 
derived from receipts for the sale of oil from the Naval 
Petroleum Reserve in Elk Hills, California. The remaining $17 
million would result from higher royalty income paid to the 
government on leases of both onshore and offshore federal lands 
in California and Alaska.
    The increases in both Elk Hills receipts and federal lease 
royalties are likely to be greater in the first year and 
diminish over time. In total, we estimate that the increase in 
receipts would be $13 million in fiscal year 1996 (reflecting 
higher prices for the last three-quarters of the year) and 
would gradually decline to $6 million by 2000.
    Assuming the appropriation of the necessary amounts, the 
administrative provisions in the bill would increase costs by 
less than $1 million over the next five years. Based on 
information from the Department of Commerce, we estimate that 
the cost of completing the environmental review and other 
proceedings leading to the presidential determination would be 
less than $500,000 and would be incurred beginning in fiscal 
year 1995. Another $400,000 would be needed in fiscal year 1997 
to cover the cost of the GAO review.
Impact on State and local governments

    Analyses by DOE and industry sources have suggested that 
allowing exports of ANS crude oil could result in additional 
revenues for state and local governments in Alaska and 
California from higher royalties, tax receipts, and other 
sources. While some increase in income is likely under the 
assumptions used in this estimate, CBO cannot estimate the 
amounts that would accrue to these states and localities.

Previous CBO estimates

    On January 30, 1995, CBO provided an estimate of H.R. 70 as 
introduced. On March 22, 1995, we transmitted an estimate of S. 
395 as ordered reported by the Senate Committee on Energy and 
Natural Resources, Title II of which included language 
identical to that in the introduced version of H.R. 70. This 
estimate differs slightly from the two earlier estimates 
primarily because the earlier bills did not include provisions 
requiring a presidential determination and related reviews. 
Those provisions would delay the start of potential exports; 
hence we project that the increase in federal offsetting 
receipts for fiscal year 1996 would be about $3 million less 
than previously estimated.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kathleen 
Gramp.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

                          Departmental Reports

    The Committee has received no departmental reports on H.R. 
70.
         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, 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):

                 SECTION 28 OF THE MINERAL LEASING ACT

                           grant of authority

  Sec. 28. (a)  * * *
          * * * * * * *

                        [right-of-way corridors

  [(s) In order to minimize adverse environmental impacts and 
to prevent the proliferation of separate rights-of-way across 
Federal lands, the Secretary shall, in consultation with other 
Federal and State agencies, review the need for a national 
system of transportation and utility corridors across Federal 
lands and submit a report of his findings and recommendations 
to the Congress and the President by July 1, 1975.]
                   exports of alaskan north slope oil


  (s)(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 section 203 of the Trans-
Alaska Pipeline Authorization Act (43 U.S.C. 1652) may be 
exported 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;
          (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 the 
        enactment of this subsection; and
          (C) shall consider whether anticompetitive activity 
        by a person exporting crude oil under authority of this 
        subsection is likely to cause sustained material crude 
        oil supply shortages or sustained crude oil prices 
        significantly above world market levels that would 
        cause sustained material adverse employment effects in 
        the United States or that would cause substantial harm 
        to consumers in noncontiguous States.
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 with 
which the United States entered into a bilateral international 
oil supply agreement before November 26, 1979, or to a country 
pursuant to the International Emergency Oil Sharing Plan of the 
International Energy Agency, any oil transported by pipeline 
over a right-of-way granted pursuant to section 203 of the 
Trans-Alaska Pipeline Authorization Act (43 U.S.C. 1652) 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, in consultation with the Secretary of Energy, may 
recommend to the President appropriate action against such 
person, which may include modification of the authorization to 
export crude oil.
  (6) Administrative action under this subsection is not 
subject to sections 551 and 553 through 559 of title 5, United 
States Code.
          * * * * * * *

                         [limitations on export

  [(u) Any domestically produced crude oil transported by 
pipeline over rights-of-way granted pursuant to section 28 of 
the Mineral Leasing Act of 1920, except such crude oil which is 
either exchanged in similar quantity for convenience or 
increased efficiency of transportation with persons or the 
government of an adjacent foreign state, or which is 
temporarily exported for convenience or increased efficiency of 
transportation across parts of an adjacent foreign state and 
reenters the United States, shall be subject to all of the 
limitations and licensing requirements of the Export 
Administration Act of 1979 (50 U.S.C. App. 2401 and following) 
and, in addition, before any crude oil subject to this section 
may be exported under the limitations and licensing 
requirements and penalty and enforcement provisions of the 
Export Administration Act of 1979 the President must make and 
publish an express finding that such exports will not diminish 
the total quantity or quality of petroleum available to the 
United States, and are in the national interest and are in 
accord with the provisions of the Export Administration Act of 
1979: Provided, That the President shall submit reports to the 
Congress containing findings made under this section, and after 
the date of receipt of such report Congress shall have a period 
of sixty calendar days, thirty days of which Congress must have 
been in session, to consider whether exports under the terms of 
this section are in the national interest. If the Congress 
within this time period passes a concurrent resolution of 
disapproval stating disagreement with the President's finding 
concerning the national interest, further exports made pursuant 
to the aforementioned Presidential findings shall cease.]
          * * * * * * *
                  ADDITIONAL VIEWS OF NEIL ABERCROMBIE

    The committee reported version of H.R. 70 contains an 
amendment which I offered that was adopted by voice vote. The 
purpose of the amendment is to require the President to make a 
determination prior to the exporting of crude oil from the 
Alaska North Slope that the activity will not have an effect 
which is likely to harm consumers in noncontiguous states.
    Hawaii has an energy market that is uniquely different from 
all the other states in the Union. The State of Hawaii depends 
on imported oil for over 92 percent of its energy supply, a 
large share of which comes from Alaska. Currently, Hawaii leads 
the nation in energy costs. A recent survey found that the 
average price for a gallon of gasoline in Hawaii was $1.76. The 
nationwide average was $1.33. In addition, the neighbor islands 
already have some of the highest costs in terms of electricity 
production. In particular, Maui and the Big Island rely heavily 
on fuel oil processed from the Alaska North slope.
    In June 1994, the U.S. Department of Energy (DOE) released 
a study on ``Exporting Alaskan North Slope Crude Oil: Benefits 
and Costs.'' It is my understanding that the study concludes 
that permitting exports would benefit the U.S. economy. Yet, 
Hawaii was not even mentioned in the report. Thus any attempt 
to make assumptions on Hawaii's consumers and economy based on 
the DOE study would be inaccurate and misleading.
    Senator Murray offered an amendment that contained language 
similar to the Abercrombie amendment. The Murray amendment 
requires the President in consultation with the Attorney 
General and the Secretary of Commerce to examine the effects of 
exporting crude oil on independent refiners and adverse 
employment consequences in the United States. The Murray 
amendment was adopted in the Senate. However, there was not 
sufficient time to review the Senate language prior to the 
mark-up of H.R. 70 in the House Committee on Resources. The 
Murray amendment did not address harm to consumers.
    The Abercrombie amendment is a work in progress. The 
Dooley/Tauzin substitute was not available until the day before 
the full Committee mark-up preventing any consensus on final 
language of the amendment. It is my understanding that the 
delay in making the language available was caused by the 
Administration. The substitute is a good faith effort, 
particularly resulting from the actions of Chairman Young, to 
accommodate the concerns of committee members.
    In offering the amendment I was given an assurance by 
Chairman Young that we would continue working together on the 
amendment language. I am committed to working with Chairman 
Young to protect Hawaii's consumers.
    Under the Dooley/Tauzin substitute the Secretary of 
Commerce, by the authority from the Export Administration Act, 
will administer the export licensing of Alaska North Slope 
crude oil. This should be a continual monitoring process. It is 
important that one of the conditions attached to the export of 
crude oil at the front end include that the activity will not 
have an effect which is likely to harm consumers in 
noncontiguous states. The crucial element in arriving at an 
equation which allows for export is equity for mainland and 
Pacific region consumers in terms of supply. Language ensuring 
this resolution of this issue is vital.

                                                  Neil Abercrombie.
            DISSENTING VIEWS OF REPRESENTATIVE GEORGE MILLER

    In the Majority's rush to judgement on this legislation, 
the potential for higher energy prices and negative impacts to 
the economy of the West Coast take a back seat to an apparent 
zeal to supply Japan, South Korea and Taiwan with oil produced 
in the U.S. and currently used by U.S. consumers. The only sure 
winners in this endeavor are British Petroleum and the State of 
Alaska who are likely to profit at the expense of energy 
consumers in Washington, Oregon, California, Hawaii, Arizona, 
and Nevada (``West Coast'').
    The substitute adopted by the Committee is an improvement 
over H.R. 70 as introduced. By requiring a process for a 
Presidential finding that the export of Alaska North Slope 
(``ANS'') oil is in the national interest as a pre-condition 
for authorizing exports, the substitute implicitly recognizes 
that the economic issues involved are complex and that the 
potential costs and benefits have yet to be fully and fairly 
evaluated by the Administration.
    Since Congress enacted the Trans-Alaska Pipeline 
Authorization Act 22 years ago, ANS oil has been used to meet 
domestic energy needs. Today, ANS oil constitutes nearly 25 
percent of total U.S. oil production. Opening the vast Alaskan 
wilderness on the North Slope to oil development was very 
controversial, with the Vice President casting a vote to break 
a deadlock in the Senate in 1973. As part of the congressional 
``deal'' to allow for the expedited construction of the 
pipeline system, the TAPS Act expressly reserved ANS oil for 
the U.S. market. Since 1977, ANS production has provided the 
majority of oil delivered to refineries in Washington, 
California and Hawaii and tens of thousands of jobs are 
directly dependent upon that delivery system.
    Much of the blame for the failure to thoroughly consider 
the risks of changing the system which has been in place for 
last two decades rests with the Department of Energy (``DOE''). 
Instead of providing dispassionate information for Congress to 
fairly evaluate the pros and cons of allowing exports, DOE has 
played the role of an uncompromising advocate for exports, 
predicting benefits which appear to be exaggerated and 
illusory.
    DOE's 1994 study in support of exports is based on the 
premise that the price of ANS oil is depressed on the West 
Coast because of an oversupply caused by the export 
restrictions. While there is historical evidence to support 
DOE's price and supply assessments, DOE's conclusions that 
allowing exports would provide substantial benefits in the 
future without any downside to West Coast consumers are 
questionable in light of new evidence of current and projected 
ANS price parity and the rapidly diminishing West Coast supply 
``glut.''
    As the State of Alaska's Department of Revenue observed in 
a recent 1995 report, ANS oil ``prices at parity can be 
expected to occur more often in the future as ANS production 
declines and the most expensive transportation route to the 
Gulf Coast via Panama loses tanker traffic.'' This new 
information indicates that the 1994 DOE study, which projects 
that ANS exports would lead to more oil production in both 
California and Alaska, the creation of up to 25,000 jobs, and 
an increase in state and federal revenues--without costs to 
consumers since DOE assumes the West Coast refiners will not 
pass along higher crude oil prices--relies on outdated ANS oil 
price and West Coast supply data.
    Among the other dubious assumptions of DOE's 1994 study is 
the projection that British Petroleum will reinvest 100 percent 
of their additional profits from exports in Alaska operations. 
Based on this assumption, DOE projects an increase in Alaska 
production of between 200 and 400 million barrels. However, in 
response to my written questions, British Petroleum failed to 
guarantee that they would reinvest all the profits in Alaska or 
to disclose the amount of profits they expect (Copy attached as 
Appendix A).
    If the sanguine projections in DOE's study prove to be 
wrong, and exports are nonetheless authorized by the President, 
the potential for negative consequences to the economies of the 
West Coast states is significant. Testimony submitted by Tosco 
Corporation at the May 9, 1995 committee hearing explained 
concerns shared by independent refiners and others:

          British Petroleum produces approximately 800,000 
        barrels per day at ANS oil, which is roughly one-half 
        of total ANS production. Because the other ANS 
        producers generally process their ANS oil in their own 
        refiners, British Petroleum is the sole spot seller of 
        ANS oil to independent refiners. By controlling the 
        volume of oil delivered to the West Coast and Gulf 
        Coast markets, British Petroleum can effectively 
        control the supply of ANS on the West Coast. This gives 
        British Petroleum considerable market power over the 
        price of ANS oil.
          Since 1991, the price of ANS oil has increased by 
        almost $3.00 per barrel relative to the world benchmark 
        price of West Texas Intermediate (``WTI'') crude oil. 
        The result is that ANS oil is currently selling on the 
        West Coast at a price that is effectively at world 
        market parity.
          However, if Congress allows unrestricted exports of 
        ANS oil, the price will be bid up above world price 
        parity because some refiners cannot readily import 
        substitute foreign oil. These refiners lack deep water 
        terminal facilities and storage needed to accommodate 
        large tankers and would have to use more costly and 
        environmentally risky lightering operations. 
        Furthermore, they may be unable to procure foreign 
        crude oil which is comparable to ANS oil and suitable 
        for their refinery processes.
          In light of these costs associated with importing 
        foreign oil, British Petroleum would be able to extract 
        a premium for ANS oil above world price parity. Thus 
        legislation to allow exports of ANS crude oil would 
        simply strengthen the ability of a major foreign 
        company to exercise its considerable market power over 
        the supply and pricing of ANS oil in the West Coast 
        market at the expense of independent refiners and 
        ultimately consumers on the West Coast.

    Unfortunately, the Majority chose to reject several 
amendments in the Committee markup which would have 
significantly alleviated concerns that exports will hurt the 
economy, the environment and consumers in the West Coast. The 
most important safeguard was contained in my amendment to limit 
exports only to the ANS production which is in excess of the 
current needs on the West Coast (any production over 1.35 
million barrels per day). My amendment was a reasonable 
compromise which would have allowed the 140,000 barrels per day 
projected by DOE and the State of Alaska to be exported (at the 
current production levels of 1.6 million barrels per day) while 
at the same time assuring that U.S. needs would be taken care 
of first in the event there is a supply shortage in the future.
    Without thorough consideration, the Majority also rejected 
my amendment which would have required that the Secretary of 
the Interior determine whether Alyeska Pipeline Service Company 
(majority owned by British Petroleum) is operating the Trans-
Alaska Pipeline System in compliance with the Agreement and 
Grant of Right-of-Way made pursuant to the Trans-Alaska 
Pipeline Authorization Act. Under the amendment, authority to 
export ANS oil would be conditioned on compliance with the 
right-of-way agreement which is designed to ensure safe and 
environmentally sound operation of the oil delivery system.
    Significant management and hardware problems at Alyeska 
have been identified by past investigations of this Committee 
and the Oversight Subcommittee of the Energy and Commerce 
Committee, the GAO, and through comprehensive audits by both 
the Department of the Interior and Alyeska's owner companies. 
As British Petroleum acknowledged in their May 16th response to 
my questions (see Appendix A) at least $300 million is being 
allocated to Alyeska to address these problems and ``[i]t is 
true that of the 4,920 audit action items, there are several 
that have Right of Way implications, such as the audit findings 
dealing with the quality program and the employment of Alaska 
Natives.'' My amendment does not place any additional legal 
requirements on Alyeska or its owners; it simply requires that 
they abide by their contract with the American people in order 
to obtain the benefits of ANS exports.

                                                        Geo Miller.
                               APPENDIX A

                              ----------                              


 Representative George Miller's Hearing Questions for British Petroleum

    1. Alyeska. British Petroleum (BP) is the majority owner of 
the Alyeska Pipeline Service Company (Alyeska) which operates 
the Trans-Alaska Pipeline System. A combination of 
congressional investigations and Department of the Interior and 
owner company audits have revealed significant management and 
hardware problems in the pipeline system.
    (a) Before the Committee votes on H.R. 70--which would 
provide substantial benefits to BP by allowing the export of 
Alaska North Slope oil--what assurances can you provide the 
Committee that BP and the other Alyeska owners are committed to 
both to fixing the problems already identified with the 
pipeline system and operating the system in a safe and 
environmentally sound manner in the future? What specific 
actions have and will be taken which support this commitment?
    (b) One of the deficiencies identified in the audits is the 
fact that Alyeska has not been operating in compliance with the 
pipeline right-of-way agreement with the Department of the 
Interior. What steps have been taken to bring Alyeska into 
compliance? What specific areas remain in non-compliance? What 
additional efforts will be made to bring Alyeska into full 
compliance and when will compliance be achieved?
    2. Oil Spill Response. Subsequent to the Exxon Valdez oil 
spill in 1989, Alyeska adopted the public position that it is a 
``voluntary response contractor'' in the event of an oil spill 
from tankers carrying Trans-Alaska Pipeline System (TAPS) oil 
within state of Alaska waters in Prince William Sound. The 
House of Representatives disagreed and adopted an amendment to 
comprehensive energy legislation (Section 2462 of H.R. 776) on 
May 20, 1992 which reiterated Alyeska's statutory duty to 
respond to and clean up TAPS oil spills. (See: H.Rept. 102-474, 
Part 8, pages 123-124).
    (a) Does Alyeska have a statutory duty under federal or 
state law to respond to spills from tankers chartered by BP 
while travelling in state of Alaska waters?
    (b) If not, what are BP's contractual arrangements with 
Alyeska which will assure oil spill response and cleanup?
    3. Tankers. As introduced, H.R. 70 provides that any 
exports of ANS crude must be on U.S.-flag tankers (currently 
under the Jones Act, tankers in the TAPS trade must be U.S. 
built).
    (a) If the Congress allows Alaska North Slope (ANS) 
exports, which specific tankers does BP intend to use? Are 
these tankers built in the U.S.? Are they double hulled? How 
large are they? How old are they? How long will they be 
chartered for? Will repair work be done in the U.S.?
    (b) How many of the tankers chartered by BP to carry TAPS 
oil are due to be scrapped or reconstructed between now and the 
year 2000 either because of their structural condition or 
because of the double hull requirement of the Oil Pollution Act 
of 1990? Where is the repair work done currently on these 
vessels?
    (c) What tanker routes does BP intend to use to the Far 
East? How far will tankers stay off the Alaska coast once out 
of Prince William Sound?
    (d) If fewer BP chartered tanker trips to the terminal in 
Valdez are expected, does this mean that the tankers exporting 
oil will be larger than those currently in the TAPS trade?
    (e) What oil spill or emergency response equipment will be 
necessary to be in place on Kodiak Island or in western Alaska?
    4. Maritime Workers. The Seafarers International Union has 
reversed its long-standing opposition to ANS exports and 
reportedly has an arrangement with BP so that they will be 
provided jobs on tankers carrying ANS oil for exports.
    (a) How many new jobs will be provided for the maritime 
unions if exports are allowed?
    (b) Is this arrangement a binding contract even if Congress 
fails to include a U.S.-flag or Jones Act requirement but 
allows oil to be exported?
    5. ANS West Coast Market Control. BP exercises significant 
influence over the market for ANS oil because it controls about 
one-half of the ANS production volume. Unlike other ANS 
producers, BP does not have its own refineries and currently 
sells its oil to other U.S. refineries.
    (a) Does this substantial control over the open market ANS 
volume give BP the power to restrict the supply and increase 
the price for purchases by independent refineries on the West 
Coast?
    (b) Since California heavy crude is not a direct substitute 
for ANS crude, will independent refiners be forced to import 
more oil on foreign tankers if BP diverts the ANS crude for 
export?
    (c) Will any less ANS oil be available to independent 
refineries or will the price of ANS on the West Coast increase 
if exports are allowed?
    (d) The DOE study predicts that higher ANS crude oil prices 
caused by ANS exports will be absorbed by West Coast refiners. 
Will West Coast consumers pay more for gasoline or other crude 
oil products if ANS exports are allowed?
    6. Alaska Production. DOE's 1994 study predicts that 
between 200 and 400 million barrels of additional reserves in 
Alaska will occur if exports of ANS crude are allowed.
    (a) Does BP intend to invest 100 percent of its increased 
revenue from ANS oil exports in Alaska production as is assumed 
in the DOE production forecasts?
    (b) If there is no such assurance, are the 1994 DOE study's 
projections of additions to Alaska reserves overstated? What 
additions to Alaska reserves will occur if exports are allowed?
    (c) What revenue gain for BP will accrue if exports are 
allowed?
    (d) Since 1991, the price of ANS oil has risen about $3 per 
barrel relative to the benchmark West Texas Intermediate price. 
How much of an increase in Alaska production has resulted from 
this price increase?
    7. ANS Price Parity. According to the State of Alaska 
Department of Revenue's Sources Book for Spring 1995, ``the 
price difference between West and Gulf Coast [oil] has narrowed 
considerably over the last eight months. The average difference 
was $.28/bbl over this time period which included the three-
month period of October, November, and December when prices 
were essentially the same in both markets. Prices at parity can 
be expected to occur more often in the future as ANS production 
declines and the most expensive transportation route to the 
Gulf Coast via Panama loses tanker traffic. * * * Over the next 
few years, as demand on the West Coast grows and ANS production 
declines, ANS will not be sold for delivery to the Gulf Coast. 
At that time, West Coast ANS prices will be determined by the 
price of foreign sour crude oil imported into that market.''
    (a) Does BP agree with the Department of Revenue's analysis 
that ANS prices are at or near parity with Gulf Coast prices 
and that the supply ``glut'' is disappearing on the West Coast?
    (b) Are the DOE's projections--which were based on data 
showing a historic ``depressed price'' of ANS crude--of job 
creation, greater oil production and substantially increased 
federal and state revenues, accurate? Specifically, does BP 
agree with DOE that up to 25,000 new oil industry jobs, 
including many in California, will be created by the year 2000?
    (c) If the West Coast surplus of ANS crude is disappearing, 
how much of BP's oil currently going to the West Coast will be 
diverted for export if Congress approves H.R. 70?
    8. Environmental Issues. DOE's position is that, prior to 
any export of ANS crude, a full environmental review must be 
done consistent with the National Environmental Policy Act.
    (a) If the NEPA review includes an accurate analysis of the 
condition of the tanker fleet currently engaged in the TAPS 
trade, should it conclude that the fleet is in better or worse 
safety condition than at the time of the 1989 Exxon Valdez oil 
spill?
    (b) What are the most significant environmental concerns of 
BP that should be addressed in the NEPA analysis?
                                ------                                

                                           BP America Inc.,
                                      Washington, DC, May 16, 1995.
Hon. George Miller,
Committee on Resources,
House of Representatives, Washington, DC.
    Dear Congressman Miller: It was a privilege to appear 
before the U.S. House of Representatives Committee on Resources 
to address H.R. 70, legislation to lift the ban on the export 
of Alaska North Slope oil.
    Attached are BP's responses to questions submitted from you 
to me in your letter of May 11, 1995.
    I look forward to working with you.
            Sincerely,
                                             Linda Adamany,
                            Senior Vice President, BP Oil Shipping.

                  response to rep. miller's questions

    (1) (a) In testimony before the House Subcommittee on 
Oversight and Investigations, on November 10, 1993, the chief 
executives representing the three major owners of the Trans-
Alaska Pipeline System (TAPS) made specific commitments to 
correct the problems identified by the various audits of TAPS. 
Richard Olver of BP stated, ``I commit to you today to provide 
the necessary human resources that are required to put this 
plan into place and to back that up about [sic] all the 
necessary and appropriate financial resources.''
    The Owners have reaffirmed this commitment on several 
occasions as demonstrated by the number of human and financial 
resources they have provided Alyeska since those hearings. This 
commitment was reaffirmed again in meetings that Alyeska and 
the TAPS Owners had just last week with various congressmen, 
senators, and staff in Washington, D.C.
    The most apparent example of the Owners commitment is the 
$220 million spent to address audit findings in 1994, with an 
additional $80 million being spent on findings this year. By 
the end of 1995, 85 to 90 percent of the audit findings will 
have been addressed. By December 1996 all but a handful of the 
audit items will have been resolved. Plans are in hand to 
address outstanding long lead issues, e.g. control systems.
    (b) There have been no findings of non-compliance with the 
Agreement and Grant of Right of Way. It is true that of the 
4,920 audit action items, there are several that have Right of 
Way implications, such as the audit findings dealing with the 
quality program and the employment of Alaska Natives. Alyeska 
is working to address all audit action items to closure and the 
Joint Pipeline Office is reviewing and approving closures based 
on their priority.
    Alyeska undertook a self-assessment in November, 1993, with 
regard to meeting the Right of Way requirements. Areas needing 
improvement are included in the Audit Compliance Tracking 
database and are being tracked by Alyeska and the Bureau of 
Land Management to closure. Alyeska will audit its adherence to 
Right of Way requirements periodically in the future. The 
Company has initiated a training program designed to inform 
people about what they must do in order to meet the Right of 
Way requirements.
    (2) (a and b) Alaska H.B. 540 requires Alyeska to respond 
to oil spills from TAPS trade tankers, en route to and from the 
Valdez Marine Terminal while in Prince William Sound, for at 
least the first 72 hours following a spill. BP has a contract 
in place with each owner/operator (responsible parties) of its 
chartered vessels to act as their Response Action Coordinator. 
BP also has in place a contract with Alyeska, for Alyeska to 
act as its Primary Response Action Contractor for at least the 
first 72 hours or until both the federal and state on-scene 
commanders have approved the plan for transitioning the 
management and control of the spill from Alyeska to BP acting 
for the responsible party.
    (3) (a) Given that actual exports levels would vary with 
market conditions, we cannot state with any certainty how many 
or which particular vessels will carry ANS exports. There 
appears to be ample Jones Act tonnage already under charter or 
in layup to carry the anticipated increase in tonnage demands 
that exports would require. The Jones Act vessels available to 
BP for potential export, either through current long term 
charters or U.S. independent shipowners, range from 60,000 dwt 
to over 188,000 dwt. Precise charter durations must remain 
proprietary for competitive reasons. All vessels were built or 
rebuilt in the United States from the mid-1970's or later. 
Among these vessels, three have double hulls, and six have 
double bottoms.
    Given its proximity to Alaska and its world class 
facilities, the Port of Portland should continue to be a 
preferred site for repairs as long as it remains competitive.
    (b) With the exception of a few ships chartered through 
U.S. independent shipowners, none of the balance of the fleet 
chartered by BP are expected to be retired before the year 2000 
under the Oil Pollution Act of 1990. Individual ships are 
always subject to retirement prior to the year 2000 should an 
owner/operator so choose depending on a specific ship's 
operating condition.
    Repair work is currently carried out in either Portland, 
Oregon or San Francisco, California.
    (c) BP has had discussions with various agencies, including 
the U.S. Coast Guard, as well as other parties concerned about 
issues regarding shipping routes in the event exports proceed. 
BP and the various shipowners/operators have agreed that their 
vessels would proceed to a point 300 miles due south of Cape 
Hinchinbrook Light before shaping a course to the west. This 
initial course and distance will place the vessels in 
international waters beyond the U.S. Exclusive Economic Zone 
(EEZ).
    (d) As we anticipate using vessels currently in the trade 
or in layup, tankers carrying the crude in the export market 
will not be larger than those currently in the TAPS trade.
    (e) The intended route to the Far East, discussed earlier, 
takes the vessels no closer to Kodiak Island than currently. BP 
and the other shippers have a U.S. Coast Guard approved oil 
spill response plan covering appropriate areas of the Gulf of 
Alaska. The Far East route will not take the vessels into any 
new area not presently covered. Therefore, we see no necessity 
to place additional equipment on Kodiak Island.
    4. (a) According to the Department of Energy's 
comprehensive study, up to approximately 3,300 direct and 
indirect maritime industry jobs will be lost with declining 
production or exports on foreign-flag vessels. By stimulating 
additional production and requiring the use of U.S.-flag 
vessels, the proposed legislation is expected to preserve most, 
if not all, of those jobs. The exact number will ultimately 
depend on the amount of ANS oil available, as well as on the 
amount of foreign demand that might develop for the oil.
    (b) for competitive and proprietary reasons, BP's long-
standing policy is to not disclose specific terms or conditions 
that might exist under any of our contractual arrangements. The 
decision of the Seafarers International Union to support the 
legislation rests, we believe, on the preference it provides 
for American-flag ships, which are manned by American seamen. 
For insight into their thinking, we would refer you to Mr. 
Sacco's eloquent written statement submitted to the Committee.
    5. (a) We do not agree with the stated premise that BP 
exercises substantial control over the market. All crude oil 
prices, including ANS, are subject to the numerous and complex 
fundamentals of supply and demand. The export of Alaskan crude 
oil merely allows it to be subject to global factors rather 
than be subject to local distortions created through artificial 
barriers.
    (b) Any exports of ANS will be more than adequately met 
through a combination of California and foreign crudes. 
According to the Department of Energy's comprehensive study, 
lifting the export ban will reduce overall tanker movements in 
U.S. waters. This is not only because of an expected increase 
in onshore California production (which is delivered by 
pipeline), but also due to the elimination of movements of ANS 
crude oil to the Gulf Coast that involves multiple loading and 
unloading operations.
    (c) ANS crude will be available to independent refiners at 
the world market price. This price is expected to be marginally 
higher than the artificially depressed export ban-induced price 
that has prevailed in recent years.
    (d) According to the Department of Energy's comprehensive 
study, consumers will not see any discernible impact on prices. 
Whether prices at the pump will rise depends ultimately on 
gasoline market supply and demand fundamentals. In testimony 
before the Senate Banking Committee last year, an independent 
refiner stated that it would pass on higher crude costs to 
consumers. More recently, the same refiner appears to have 
concluded that it may not be able to do so. In the final 
analysis, consumer prices on the West Coast are determined by 
numerous factors in a highly competitive marketplace.
    6. (a) It is not possible for BP to guarantee future 
investments in any of its businesses.
    (b) However, the export of ANS will allow it to be a truly 
global crude, and as such compete on a global basis for future 
investment. Currently Alaska, and therefore the United States, 
is at a competitive disadvantage with an ever-increasing number 
of international oil production opportunities. Lifting the ban 
on the export of Alaskan crude oil removes a major barrier to 
developing U.S. reserves.
    (c) Revenue gains cannot be determined until the markets 
have a chance to recalibrate once artificial constraints are 
removed.
    (d) We find it unusual to choose 1991 as the starting point 
for comparison of ANS to West Texas Intermediate. The year 1991 
represents an anomaly given the shock to the crude oil markets 
as a result of the Gulf Crisis with Iraq. Actual gains against 
WTI, when taken over a more reasonable period that strips out 
the effects of the Gulf Crisis, are substantially less and 
still do not place ANS on a level playing field to compete 
globally for investment opportunities.
    7. (a) As with previous question, it is not appropriate to 
extract conclusions from the three month period of the fourth 
quarter of 1994 when the Gulf Coast and West Coast prices were 
essentially the same. For example, the second and third quarter 
of 1994 and the first quarter of 1995 both had the West Coast 
price of ANS at approximately $0.50 per barrel less than the 
Gulf Coast. However, rather than use such statistics to draw 
definite conclusions, we would hold to the basic premise that 
ANS value cannot be determined until artificial trade barriers 
are removed.
    (b) We do not see any conclusions in the DOE report that 
would appear unreasonable.
    (c) It is not possible to determine export volumes of ANS 
until artificial barriers to trade are removed and the markets 
have time to recalibrate to their efficient equilibrium.
    8. (a) Any objective review of the TAPS tanker trade will 
indicate that measures have been enacted to further enhance the 
prevention of oil spills. These include numerous oversight 
committees and enhanced operating practices both in Prince 
William Sound and at the discharging ports in the Lower 48.
    (b) BP does not believe that the export of ANS requires a 
supplemental environmental review. None the less, the 
Administration intends to conduct an appropriate environmental 
review and we will work closely with the Administration to 
ensure that all potential environmental concerns are addressed.
                               APPENDIX B

                              ----------                              


 Statement of William H. White, Deputy Secretary of Energy Before the 
     Committee on Resources, House of Representatives, May 9, 1995

    Mr. Chairman, it is a pleasure for me to appear before the 
Committee today to discuss permitting the export of Alaskan 
North Slope (ANS) crude oil. I am pleased to report that the 
Administration supports this initiative and hopes to work with 
the Congress toward enactment of legislation to permit the 
exportation of Alaskan North Slope crude oil.
    The export of Alaskan North Slope crude oil is an important 
component of this Administration's energy policy because it has 
broad implications for the nation and for the states of Alaska 
and California. The benefits (discussed below in more detail) 
include:
          increased federal and state revenues;
          more oil production from fields in Alaska and 
        California while additional reserves are created;
          more jobs in the oil sector and indirectly in the 
        broader economy, while saving jobs in the maritime 
        industry; and
          little or no impact on the environment or on consumer 
        prices for gasoline.
    We have reached these conclusions after studying the 
impacts of permitting export of ANS crude oil and issuing a 
detailed report on June 30, 1994. Copies of that report have 
been provided to the Committee.
    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 state and local 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 significant 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 
addressed in the legislation:
    1. Retain Emergency Authority.--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. Require Export in U.S.-Flag Vessels.--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. Review Environmental Effects.--Before any oil is 
exported, an environmental review must be undertaken, 
consistent with the National Environmental Policy Act of 1970. 
Environmental resources must be fully protected.
    4. Assure Supplies for U.S. Refineries.--U.S. refineries 
must have continued access to adequate supplies of crude oil, 
including crude oil at prevailing market prices. Refiners must 
be protected from anticompetitive activity that would threaten 
that supply. If evidence of such anticompetitive 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.
    5. Appropriate Export Administration.--Any export of ANS 
crude oil made pursuant to this bill should be approved and 
administered through the appropriate export licensing process 
that gives the President authority to impose such terms and 
conditions on exports as are necessary or appropriate. 
Licensing 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.
    H.R. 70, Mr. Chairman, 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. Consumers 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 
nonexistent.
    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. 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.
    Employment for U.S. Seafarers. Reforms should not transfer 
seafarer employment opportunities abroad.
    Employment for U.S. Shipbuilders. The Administration is 
engaged in 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 XI loan 
guarantees; and (5) assisting international marketing. 
Consistent with this plan, 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). This multilateral agreement will eliminate foreign 
shipbuilding subsidies and other distortive trade practices 
that limit competitive opportunities for U.S. shipyards.
    3. Adherence to International Trade Commitments.--Of 
course, any conditions imposed on exports must be consistent 
with established U.S. international trade policies. A home-
build requirement for ANS crude exports raises legal issues of 
concern vis-a-vis U.S. international trade obligations.
    Thus, we oppose any requirement that ANS oil exports be 
carried on U.S.-built vessels.
    There has been concern expressed that requiring U.S. flag 
vessels to carry exports of ANS crude oil 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 seafarer jobs resulting from the 
displacement of shipments now carried in the coastwide trade. 
This action should not be viewed as opening further 
possibilities for extending cargo preference.
    4. Environmental Protection.--Environmental resources must 
be fully protected. DOE analyzed potential environmental 
impacts in our June 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.
    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.
    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, appropriate 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. Moreover, we are prepared to track 
petroleum market and refining activities in the period 
following Congressional modification of the ban.
    Mr. Chairman, I believe that H.R. 70 provides 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 anticompetitive 
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 indicate 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. More than half ANS crude oil and 75 
percent of California crude 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 cent per gallon of 
crude.
    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 than 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 above 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 about 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.
                               APPENDIX C

                              ----------                              

                          House of Representatives,
                                    Committee on Resources,
                                      Washington, DC, May 24, 1995.
Hon. Bud Shuster,
Chairman, Committee on Transportation and Infrastructure, Rayburn House 
        Office Building, Washington, DC.
    Dear Bud: On May 17, 1995, the Committee on Resources 
ordered H.R. 70, a bill to permit the export of certain 
domestically produced crude oil, reported to the House of 
Representatives. This bill was referred primarily to the 
Committee on Resources, with the Committee on International 
Relations receiving an original sequential referral.
    Section 1 of H.R. 70 requires that oil exported from 
Alaska's North Slope be transported on vessels documented under 
the laws of the United States and be owned by a U.S. citizen, 
as determined in accordance with the Shipping Act, 1916. I 
believe that this provision may lie in the jurisdiction of the 
Transportation and Infrastructure Committee under Rule X(q) (7) 
and (12) of the Rules of the House of Representatives.
    The lifting of the export ban on Alaska oil is of great 
personal importance to me, and the benefits from enacting H.R. 
70 are immense: Increasing domestic oil production by 110,000 
barrels per day, creating up to 25,000 oil industry-related 
jobs, preserving as many as 3300 direct and indirect maritime 
jobs, and raising approximately $2 billion in Federal and State 
revenues over ten years.
    Because the Leadership has an interest in scheduling H.R. 
70 for consideration by the House of Representatives in early 
June, I would very much appreciate if the Committee on 
Transportation and Infrastructure would not seek a sequential 
referral of this bill. The Senate has already passed a smiliar 
measure in the context of a larger bill, and I hope to be able 
to take up the Senate bill and ask for a conference. I would 
certainly support your request to the Speaker to be represented 
on the conference on this bill.
    Thank you for your consideration of my request. I look 
forward to working with you on this issue and many others in 
the coming months.
            Sincerely,
                                               Don Young, Chairman.
                                ------                                

                          House of Representatives,
            Committee on Transportation and Infrastructure,
                                      Washington, DC, May 25, 1995.
Hon. Don Young,
Chairman, Committee on Resources, Longworth House Office Building, 
        Washington, DC.
    Dear Don: Thank you for your letter regarding H.R. 70, a 
bill to permit the export of certain domestically produced 
crude oil.
    I agree that the Committee on Transportation and 
Infrastructure has a jurisdictional claim to Section 1 of the 
bill, which requires Alaska North Slope oil to be transported 
on vessels documented under the laws of the United States and 
owned by United States citizens. However, knowing of your 
strong interest in this bill, and not wanting to impede its 
rapid consideration by the House of Representatives when we 
return from the Memorial Day recess, I will agree not to seek a 
sequential referral of the bill.
    I ask that our exchange of letters on this matter be made 
part of the legislative history of H.R. 70 and look forward to 
working with you soon on the House-Senate Conference on this 
bill.
    With warm regards, I remain
            Sincerely,
                                             Bud Shuster, Chairman.
                                ------                                

                          House of Representatives,
                                    Committee on Resources,
                                      Washington, DC, May 23, 1995.
Hon. Benjamin A. Gilman,
Chairman, Committee on International Relations, Rayburn House Office 
        Building, Washington, DC.
    Dear Chairman Gilman: I am respectfully requesting your 
cooperation in scheduling H.R. 70, a bill to permit exports of 
certain domestically produced crude oil, for consideration by 
the House of Representatives in early June. H.R. 70 was 
primarily referred to the Committee on Resources and 
sequentially referred to your Committee.
    H.R. 70 amends the Mineral Leasing Act to lift a ban on the 
export of oil produced on Alaska's North Slope. In addition, 
H.R. 70 also recognizes the authority of the President to 
prohibit export of the oil under the Constitution and the 
International Emergency Economic Powers Act and the National 
Emergencies Act. Finally, with certain exceptions involving 
international oil supply agreements, H.R. 70 requires the 
transportation of this oil on U.S. flag and U.S. owned vessels.
    A ban on the export of Alaska North Slope crude oil is also 
in place under the Trans-Alaska Pipeline Authorization Act. The 
Committee on Resources exercises jurisdiction over activities 
under these statutes under Rule X of the Rules of the House of 
Representatives. Under the Export Administration Act, a statute 
over which the Committee on International Relations exercises 
jurisdiction under Rule X, a similar ban was in place; however, 
this authority expired in 1994, but was extended by executive 
order. The Committee on International Relations also exercises 
general authority over export control under clause (4) of Rule 
X(i) of the Rules of the House and over the International 
Emergency Economic Powers Act, mentioned above.
    Because the House Leadership has an interest in scheduling 
H.R. 70 for consideration by the House of Representatives the 
first week in June, I would greatly appreciate if the Committee 
on International Relations would waive its full sequential 
authority over the measure and allow it to be discharged 
without amendment to expedite consideration of the bill. The 
Senate has already passed a similar measure in the context of a 
larger bill. We hope to be able to take up the Senate measure 
and ask for a conference. I would certainly support your 
request to the Speaker to be represented on the conference on 
this bill.
    The lifting of the export ban for Alaska oil is of great 
personal importance to me, and I deeply appreciate your 
willingness to cooperate on this issue. The benefits from 
enacting this bill are immense: increasing domestic oil 
production by 110,000 barrels per day, creating up to 25,000 
oil industry-related jobs, preserving as many as 3300 direct 
and indirect maritime jobs, and raising approximately $2 
billion in Federal and State revenues over ten years.
    I look forward to future cordial working relations between 
our Committees, and thank you once again for considering this 
proposal.
            Sincerely,
                                               Don Young, Chairman.
                                ------                                

                          House of Representatives,
                      Committee on International Relations,
                                      Washington, DC, June 8, 1995.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington DC.
    Dear Don: I understand that the Committee on Resources on 
May 17 ordered reported H.R. 70, a bill amending the Mineral 
Leasing Act to allow the export of Alaskan North Slope (ANS) 
crude oil under certain conditions. The bill includes a 
provision that falls within the jurisdiction of the Committee 
on International Relations pursuant to House Rule X(i) relating 
to export controls.
    Section 7(d) of the Export Administration Act of 1979, as 
amended, prohibits the export of ANS crude oil during non-
emergency periods subject to a Presidential waiver.
    In recognition of your committee's desire to bring this 
legislation expeditiously before the House of Representatives, 
the Committee on International Relations will not seek a 
sequential referral of the bill as a result of including this 
provision, without, of course, waiving or diminishing the 
Committee's jurisdiction over the provision in question. This 
committee will reserve its right to seek to have conferees 
appointed for this provision during any House-Senate 
Conference.
    I would appreciate your including this letter as a part of 
the report on H.R. 70 and as part of the record during 
consideration of this bill by the House.
    Thank you for your assistance and prompt attention to this 
matter.
    With best wishes.
            Sincerely,
                                      Benjamin A. Gilman, Chairman.
                                ------                                

                          House of Representatives,
                                     Committee on Commerce,
                                     Washington, DC, June 14, 1995.
Hon. Don Young,
Chairman, Committee on Resources, Longworth House Office Building, 
        Washington, DC.
    Dear Mr. Chairman: On May 17, 1995, the Committee on 
Resources ordered reported H.R. 70, a bill permitting exports 
of Alaskan North Slope oil, and for other purposes.
    As you know, H.R. 70, as ordered reported by the Resources 
Committee, affects statutory provisions within the jurisdiction 
of the Commerce Committee. For example, under Section 103 of 
the Energy Policy and Conservation Act (EPCA), the President is 
authorized to restrict exports of crude oil and natural gas 
produced in the United States when required by the national 
interest. Similarly, Section 7 of the Export Administration Act 
of 1979 authorizes the President to restrict exports of any 
commodity when necessary to protect the domestic economy from 
excessive drain of scarce materials and to reduce the serious 
inflationary impact of foreign demand. By its terms, H.R. 70 
would exempt the export of Alaskan North Slope oil from these 
safeguards.
    Our staffs have worked out amendments to H.R. 70 that will 
allow for the export of certain Alaskan crude oil while 
preserving the Commerce Committee's jurisdiction over energy 
issues pursuant to Rule X of the Rules of the House. It is my 
understanding that these changes will be offered as Committee 
amendments to the bill on the House floor.
    As a result of our agreement on these issues, and knowing 
of your strong desire to move this legislation expeditiously, I 
will not seek a sequential referral of the bill. By agreeing 
not to seek a sequential referral, the Commerce Committee does 
not waive its jurisdiction over these provisions. In addition, 
the Commerce Committee reserves its authority to seek equal 
conferees on these and any other provisions of the bill that 
are within the Commerce Committee's jurisdiction during any 
House-Senate conference that may be convened on this 
legislation.
    I appreciate your consideration in accommodating the 
interests of the Commerce Committee.
            Sincerely,
                                   Thomas J. Bliley, Jr., Chairman.
                                ------                                

                          House of Representatives,
                                    Committee on Resources,
                                     Washington, DC, June 14, 1995.
Hon. Thomas J. Bliley, Jr.,
Chairman, Committee on Commerce, Rayburn House Office Building, 
        Washington, DC.
    Dear Tom: Thank you for your letter in support of 
expediting floor consideration of H.R. 70, a bill to permit 
exports of certain domestically produced crude oil, for 
consideration by the House of Representatives in June. H.R. 70 
was primarily referred to the Committee on Resources but 
contains matters within the jurisdiction of the Committee on 
Commerce.
    H.R. 70 amends the Mineral Leasing Act to lift a ban on the 
export of oil produced on Alaska's North Slope while 
recognizing the authority of the President to prohibit export 
of the oil under certain circumstances.
    Under clause (e) of Rule X of the Rules of the House of 
Representatives, the Committee on Commerce has jurisdiction 
over measures relating to the exploration, production, storage, 
supply, marketing, pricing, and regulation of energy resources, 
including all fossil fuels and national energy policy 
generally. In addition, the Committee has jurisdiction over the 
Energy Policy and Conservation Act, governing the export of 
fossil fuels. Therefore, based on discussions with the 
Parliamentarian, I believe that the Committee on Commerce has a 
jurisdictional interest in H.R. 70.
    Because the House Leadership wants to schedule H.R. 70 for 
consideration by the House of Representatives in June, I 
greatly appreciate your offer to waive the Committee on 
Commerce's sequential authority over the measure. The Senate 
has already passed a similar measure in the context of a larger 
bill. We hope to be able to take up the Senate measure and ask 
for a conference. I would certainly support your request to the 
Speaker to be represented on the conference on this bill.
    The lifting of the export ban for Alaska oil is of great 
importance to me, and I deeply appreciate your willingness to 
cooperate on this issue. The benefits from enacting this bill 
are immense: increasing domestic oil production by 110,000 
barrels per day, creating up to 25,000 oil industry-related 
jobs, preserving as many as 3,300 direct and indirect maritime 
jobs, and raising approximately $2 billion in Federal and State 
revenues over ten years.
    I look forward to future cordial working relations between 
our Committees, and thank you once again for agreeing to this 
proposal.
            Sincerely,
                                               Don Young, Chairman.