New Freeze on Alaskan Oil

Billions of barrels of oil reserves are buried under the stark landscape of Alaska's North Slope. The problem is how to get this treasure to market. The best way, oilmen argue, is to pipe the crude across the breadth of Alaska to the southern port of Valdez, then tanker it to Seattle and Los Angeles. To date, oil companies have spent $300 million on engineering surveys, tanker contracts and special steel pipes. Yet the Federal Government has steadfastly refused to issue a permit to build the 789-mile-long pipeline across public land.

Last month Interior Secretary Rogers Morton predicted that he would not reach a decision until perhaps next year. Last week William Ruckelshaus, administrator of the Environmental Protection Agency, delayed the project even longer. He asked the Interior Department to consider the environmental "impact" of laden tankers sailing down the Pacific coastline and to study in detail an alternate pipeline route--through Canada.

Avoiding Earthquakes. Canadian boosters have busily promoted this alternative for months. For one thing, building such a pipeline and its service road would open up to development the country's vast potential reserves of Arctic oil and proven reserves of natural gas. For another, it would send Canadian as well as Alaskan oil directly to the U.S.'s thirsty Midwestern markets. Equally important, it would avoid some of the unique problems besetting the proposed Alaska pipeline.

The Alaskan line cannot be built until Congress decides how to settle the ancient claims of the state's natives to public lands along the pipe route. While the Alaskan line would cross four active earthquake zones--posing the danger of breaks and consequent ecological damage--Canada's pipeline would follow the relatively flat MacKenzie River valley along most of its 1,700-mile route. Moreover, the Canada pipe would obviously avoid the peril of foundering tankers spilling their cargoes off the Pacific coast or in the navigationally tricky Puget Sound area.

Bankrupt by 1976. Despite its long policy of protecting U.S. producers by sharply limiting imports of foreign oil, the Government realizes that domestic reserves are starting to decline while demand continues to rise by 4% a year. "Over the long run." a Washington oil official admits, "we can use all the Canadian oil we can get."

But the Canadian pipeline presents environmental difficulties. Although the Ottawa government has drawn up strict guidelines, says Jean Chretien. Minister of Indian Affairs and Northern Development, "we have not solved all the problems yet. We are not ready to grant a permit tomorrow." In a recent statement, the U.S. Interior Department declared that the alternate Canadian route would "serve mainly to shift the location of ecological problems rather than cure them." Both routes would disturb wildlife, and both confront permafrost. Hot oil, piped through this frozen ground, might melt the land around it, causing the pipe to sag and break--tarring huge areas with toxic crude.

Alaskans of course take a dim view of the Canadian proposal. Expecting to reap an economic bonanza from the $2 billion pipeline's construction, they have entered a recession instead. Unemployment stands at 15.3%, and businesses from Barrow to Ketchikan are failing. Unless the pipeline is started soon, Governor William A. Egan argued last month, the state may go bankrupt by 1976. On the other hand, the Alyeska Pipeline Service Co., a consortium of oil and pipeline companies that plans to build the Alaska line, is confident that EPA Administrator Ruckelshaus is merely studying alternatives. Says Alyeska President Edward L. Patton: "We have to date heard of no new and substantive data that would indicate the trans-Alaska project is not environmentally, politically and economically sounder than the trans-Canada line being pushed by some Canadian politicians."

If anything certain has come out of all the official maneuvering, it is that Washington is stalling for time before making a firm decision on the North Slope's oil. Some observers predict that President Nixon will put off the decision until after the 1972 campaign, thus antagonizing as few partisans as possible. Still, no one doubts that Alaskan oil will eventually get to the U.S. marketplace. As if to stress that fact, oilmen last week mulled a startling idea whose hazards make environmentalists blanch: General Dynamics has proposed 250,000-ton, nuclear-powered submarine tankers to shuttle oil from the North Slope to the Atlantic seaboard under the polar icecap.

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