James R. Schlesinger, the President's energy adviser, personally favors exchanging surplus oil from the Alaska pipeline for oil purchased by Japan in the Middle East.
The Japanese oil would be shipped directly to the U.S. East and Gulf Coasts, which are short of oil but which have no convenient way of getting the Alaskan production.
The Carter administration regards shipping Alaskan oil to Japan as "a serious option," says Federal Energy Administrator John F. O'Leary.
O'Leary said in a recent interview that shipping oil to Japan "would be the most felicitous of all worlds for the companies."
Standard Oil of California, which along with Texaco owns Cailtex - Japan's largest petroleum marketing company - favors swapping oil to Japan.
If Carter recommends swapping oil with Japan, he could face stiff congressional opposition and the legacy of one of the bitterest congressional battles of the Nixon era.
Rep. Morris Udall (D-Ariz.), chairman of the House Interior Committee, said he has reservations about allowing a swap. "The clear intent of the Congress when it passed the trans-Alaskan-pipeline legislation was for domestic distribution of Alaskan oil," Udall said.
Rep. John Dingell (D-Mich.) says he is "absolutely opposed" to swapping Alaskan oil, and has scheduled commerce subcommittee hearings April 20 on the question.
Congress can override Carter, should he approve a swap with Japan, by passing a concurrent resolution within 60 days.
O'Leary said Carter will make a decision when he sets the price of Alaskan oil on April 15, or when he delivers his energy policy message April 20.
The other options, which O'Leary says are "still under consideration" are:
Preventing production from exceeding West Coast demand: This option is opposed by the pipeline consortium members and the State of Alaska, both of which would lose potential income because of decreased flows through the $7.7 billion, 800-mile pipeline.
Shipping Alaskan oil to the Gulf Coast through the Panama Canal - adding $2.25 to an estimated $4 to $5 per barrel pipeline tariff - or shipping oil by tanker to Long Beach, Calif. and transporting it in a proposed pipeline from Long Beach to Texas, where it could be piped to the Midwest.
Shipping oil to Kitimat, on Canada's western coast, pumping it into a proposed pipeline to Edmonston, Alberta, then transferring the oil to existing pipelines carrying the oil to the northern-tier, midwestern states.
Because the Canadians have drastically cut exports of oil to the mid-western states in recent years, concern has grown in the midwestern states over possible crude shortages. This possibility, and the fact that there will be a surplus of 500,000-to-600,000-barrels a-day of Alaskan oil on the West Coast, are at the heart of the pipeline debate which raged during 1972 and 1973.
Environmentalists favored the Canadian route, arguing that it would cause less damage than the Alaskan line. Some midwestern senators and representatives also argued in favor of a Canadian route as in their regional interest.
Nixon's Interior Secretary, Rogers C. B. Morton, justified his May 1972 decision granting a right-of-way for the transalaska pipeline, saying that there was a greater need for Alaskan oil on the West Coast than in the Midwest. Morton also cited national security and other economic factors justifying his decisions.
Environmentalists blocked Morton's decision in the courts, alleging that Interior had not analyzed the environmental impact of an Alaskan route adequately.