Ban Alaskan oil exports - and protect US consumers

There are plenty of reasons to oppose drilling in the Arctic National Wildlife Refuge on environmental grounds. But for a moment, let's set those aside and look instead at President George W. Bush's stated reasons for opening up essential wildlife habitat to oil exploration.

Aside from the California energy crisis, the new president has given two reasons to drill for oil and gas in the Arctic National Wildlife Refuge, as well as other coastal areas, national monuments, and national forests. Mr. Bush has insisted that drilling in the Arctic refuge would be "good for American consumers" (although he's put the idea on the back burner). He also says that our reliance on oil imports constitutes a national security risk.

Yet there's no guarantee that the new oil resources wouldn't be exported overseas to whatever market bears the price. Any oil and gas would go into the hands of private multinational corporations that care little for American consumers.

We could open up all our wild and scenic areas to oil drilling and never see a drop in price at the pump or even an extra drop of domestic oil sold in the US. Right now, the private companies that would profit from drilling could well decide to sell it all overseas. There is nothing to stop them.

Worse, they may very well sell it overseas at a loss just to increase prices here in the US.

Hard to believe? It has been done before. As the Oregonian newspaper reported in January, court documents show that British Petroleum-Amoco manipulated West Coast oil prices by exporting Alaska oil for less than the price US refiners were willing to pay.

Between 1996 and 2000, British Petroleum - which controls a big chunk of Alaska's oil resources - shipped oil to Asia as a way to systematically reduce the supply of oil going to refiners in the US. They created a domestic oil shortage - thus artificially inflating gas and oil prices here on the West Coast.

The Asian exports were a small amount of the total output of Alaskan North Slope oil - about 7 percent - but because of the nature of the West Coast market, it was enough to allow BP to leverage oil prices in Washington, Oregon, and California.

The documents detailing this strategy were part of the Federal Trade Commission investigation into whether BP should be allowed to merge with another Alaska oil giant, Arco. Despite evidence of this sort of behavior, the FTC approved the merger on the condition that BP sell some assets to Phillips petroleum so that it wouldn't end up controlling 72 percent of Alaska's oil.

However, the FTC failed to prohibit Phillips or BP from exporting Alaska oil. The FTC also tried to keep these documents secret - until the Oregonian sued to have them released.

BP insists that what they did was "within the bounds of the law." Comforting as you may find that response, it doesn't say much about benefit to consumers, does it?

BP's strategy of shorting US refiners helped make West Coast oil prices the highest in the nation. Those increased oil prices laid the groundwork for a push for more domestic oil exploration - particularly during last summer's presidential campaign.

After these documents were released, Oregon congressmen called for a ban on the export of Alaska oil. Such a ban existed up until the mid '90s, when it was lifted on one condition - that oil exports wouldn't cause prices to increase here in the US.

That condition has been broken. It's time for the oil export ban to be put back in place. A bill to do so has just been introduced by Democratic Sens. Ron Wyden of Oregon and Barbara Boxer of California.

If Bush really wants what's best for consumers, he'd back this ban. After all, as Oregon Rep. Peter DeFazio (D) noted: "It would be an incredibly weak case to open up [the Alaska refuge] if the end result was going to be to export the oil and enhance corporate profits."

If Bush is asking us to give up the sanctity of our wilderness areas, he should at least be willing to guarantee that we get the oil out of the deal. Seems like that would be best for consumers, particularly since it is the public's land that is being mined and drilled.

Given his stated claims on consumer interest, you'd think Bush would back the oil export ban. It would shore up our domestic oil supply and guarantee that American consumers at least see some benefit. Yet I'll bet a gallon of gas that Bush opposes the export ban.

When it comes down to what's best for American consumers - and national security - my guess is he will choose what's best for the oil companies instead.

Ed Hunt is the editor of the Tidepool.org news service.

(c) Copyright 2001. The Christian Science Monitor