Rep. John Dingell (D-Mich.) yesterday suggested that the California Air Resources Board is holding hostage a proposed oil pipeline to Texas until California can be assured of a stable source of natural gas.
Standard Oil of Ohio (Sohio) which owns or controls more than half of the 9.5 billion barrels of oil reserves on the Alaskan North Slope, wants to build a pipeline that would take Alaskan oil from Long Beach, Calif. to Midland, Tex. This would relieve a potential glut of 400,000 to 500,000 barrels a day on the West Coast, predicted for early next year, when the trans-Alaska pipeline is fully operational.
The project, one of four proposed to take the oil east of the Rookies, would use 670 miles of already existing idle pipeline owned by the El Paso Col. It would require construction of 250 additional miles of pipeline and tanker facilities at Long Beach. Dingell estimated that it would take 18 months to put the pipeline into operation.
But Tom Quinn, chairman of the California Air Resources Board, which has jurisdiction over California's air pollution standards, has opposed the pipeline because it has not met the state's stringent environmental standards.
In testimony yesterday before Dingell's Energy and Power Subcommittee of the House Commerce Committee, Quinn said the Sohio project would involve abandoning a pipeline that brings natural gas into the state. He said, he wants the gas supply "protected, either by construction of a new oil pipeline by Sohio or by an immediate federal decision to deliver Alaskan gas directly to California."
The Carter adminisration supports construction of at least one, and perhaps two, of the west-to-east pipelines as soon as possible, Federal Energy Administrator John F. O'Leary testified. He said the Sohio project would "serve the overall national objective of transporting oi cheaply and efficiently from the West Coast to the interior regions, where it is needed."
Unless the oil can be moved directly through pipelines, tankers would have to transport it in a more roundabout manner, such as to the Panama Canal, where it would have to be loaded onto smaller ships for the journey through the canal. Committee aides estimate this would add $2.03 to $2.17 to the price of each barrel.
Quinn said he has been working closely with Sohio, the Port of Long Beach - which supports the pipeline - and various federal agencies. He said he has made "significant and meaningful progress" with Sohio toward a solution and expects to announce a final decision by early to mid October.
But Dingell said the government has had more than three years to determine how to transport the Alaskan oil to the East Coast. He called it "an extraordinary and unconscionable delay."
The subcommittee, he said, "intends to find out the extent to which parochial concerns of the state of California have been permitted to block or interfere with issues of broad national interest and to examine whether congressional action may be necessary to prevent such interference in the future."
California's air pollution standards are more stringent than federal standards, and the proposed pipeline could add more pollution to the already overburdened Los Angeles basin. Quinn said the state would grant the necessary permits to build the pipeline when "reasonable environmental safeguards" can be met.
Among the issues separating the Air Resources Board and Sohio are the level of "trade-offs" Sohio would make. Under the trade-offs policy that the federal Environmental Protection Agency adopted eight months ago, a company agrees to offset pollution from new plants by decreasing it in others.
Sohio says the California board keeps raising the ante, forcing the company to promise more tradeoffs than originally planned. The board wants a radio of 1.2 to 1, which means, for example, that for every ton of pollutanis Sohio produces, it must clean up 1.1 tons somewhere else.
O'Leary said the FEA's role has been to bring the quarreling parties together.[WORD ILLEGIBLE] he said, he foresees a settlement by October.
As for California's natural gas concerns, O'Leary said he sees "very, very little probability" that the state would be short of gas if the proposed pipeline were built.