President Carter has scuttled a politically unpopular proposal to allow the export of Alaskan oil to Japan, presidential energy adviser James Schlesinger said yesterday.
The proposal was one of several considered by the administration as a method of handing an expected "surplus" of 500,000 barrels a day on the West Coast once oil starts flowing at full capacity through the newly opened trans-Alaska pipeline.
Schlesinger acknowledged that the adminstration would have a difficult time explaining to the American people why Alaskan oil was being shipped to Japan at a time when Carter had declared an energy crisis at home.
"As a consequence, there will be no exchanges," he said on "Meet the Press" (NCB, WRC); all of the oil coming out of Alaska will have to be shipped to the states.
Schlesinger said after the TV interview that Carter's Alaska-Japan oil decision "is a decision for all time."
He said the President decided last Monday against sending Alaskan oil to Japan in exchange for japanese-bought oil shipped from the Persian Gulf to East and Gulf coast states.
Some administration and U.S. oil industry officials have contended that such an arrangement would be cheaper - by as much as $1 to $1.50 a barrel - than sending the Alaskan oil cast on tankers through the Panama Canal.
But Schlesinger said yesterday: "We are unable to demonstrate clear-cut savings to the consumers . . . There are technical advantages, including some fuel savings . . . in these exchanges. But all in all, on balance, the President has reiewed the matter and he believes that swaps would be undesirable - partly on political grounds, partly for other technical reasons."
The first trickle of north Slope crude entered the 799-mile, almost $9-billion pipeline June 20 amid expectations it would lead to an oil "glut" on the West Coast. Two of the largest companies holding Alaskan oil rights, Exxon and Standard Oil Co. of Ohio, predicted that by October they would have more crude oil than West Coast refineries or markets can absorb - raising industry fears that "discounted" Alaskan oil would deflate profit margins in a bloated market.
Besides "swapping" oil with Japan, Carter energy advisros considered "shutting in" the surplus - not producting oil beyond West Coast needs. But administration sources say that is unlikely. Full production of Alaskan oil is expected to save the nation some $5 billion annually in foreign payments, shutting any in would diminish those savings.
The administration is now seen as favoring the development of pipelines to carry surplus Alaskan oil from the West Coast to markets in the Mid-West. Schlesinger said yesterday that Carter's decision to keep Alaskan oil in the United States will encourage that development.
The decision, he said, "will have the advantage of increasing pressure on the companies to bring pipelines from the West Coast into the interior part of the country."
Overall, talk about an oil "glut" can be misleading to a nation and a world facing an "energy crisis," Schlesinger said.
"The problem . . . is that we face an invisible crisis with no overt shortage and, as a consequence, sometimes the reactions are not the appropriate ones to deal with the crisis," he said.
"The energy crisis is quite simple. Our demand for energy, and particularly for oil, is expanding at a rapid pace. The world cannot expand its oil production capacity much beyond its present level . . . We had best begin a transition now to a world in which we are less dependent upon oil."