Canadian Prime Minister Peirre Trudeau received strong assurances from President Carter yesterday that Washington would press for the completion of a proposed $14-billion pipeline to carry Alaskan and Canadian gas to American markets in the 1980s.
Following a luncheog in the Oval Office, Carter and Trudeau issued a joint communique reiterating a "strong commitment to the completion of the line," which has been snarled in regulatory, political and financial delays, and is now two years behind schedule.
In a separate action, Energy Department officials are weighing ways to discourage American oil companies from competing for short supplies of highly priced oil, selling for nearly $20 a barrel on the spot market.
On Friday, after disregarding the Energy Department's urging against it, Ashland Oil Inc. agreed to pay an estimated $18 a barrel for Iranian oil.
Although there is some disincentive under DOE's complex oil regulatory program not to buy oil at prices well in excess of the official cartel price, Energy officials argue that unless something is done, increased oil sales at spot prices will add upward pressure to oil prices elsewhere.
Although these measures have not yet been presented to Energy Secretary James R. Schlesinger, the options being weighed nclude placing a lid upon the amount of crude oil costs that can be passed through to consumers. Still another proposal would call for allocating crude oil to major refiners to discourage companies from buying higher priced oil to keep their refineries running at full capacity.
Yesterday after their meeting, Trudeau told reporters outside the White House he appreciated Carter's "understanding of the Canadian point of view" on the issues the two discussed, including energy, fishing rights, border claims, and trade.
Carter said that Washington and Ottawa have agreed to establish a sub-cabinet consulting group to deal with energy and other bilateral issues.
Later, a U.S. official told reporters that the administration will send a reorganization proposal to Congress by April 1 that would create the Office of the Federal Pipeline Inspector, and would try to speed up regulatory decisions on the pipeline. This, along with pending rulings affecting the profitability of the 4,000-mile project to potential private investors, would make completion possible "by late 1984 or early 1985," the official said.
When completed, the pipeline is expected to deliver 1 trillion cubic feet of gas from Alaska's North Slope to the lower 48 states and, according to Secretary Schlesinger, could replace half a million barrels of foreign oil imports daily.
The delay in the pipeline project, headed by John G. McMillian, of Northwest Energy Co. and five other American pipeline distribution companies and their Canadian partners, has raised questions on whether it can be built with only private financing.
Asked whether loan guarantees were discussed by Carter and Trudeau, a U.S. official said, "The question of federal guarantees is not being faced up to now; the expectation is that it could be financed privately."
U.S. officials say they expect not only private financiers but the state of Alaska and the North Slope oil producers, who will also be selling natural gas, to have a role in the financing. The natural gas is produced along with the oil now being taken from the North Slope. Today the gas is being reinjected into the Prudhoe Bay oil fields. Unless the gas pipeline is built, the oil companies stand to lose billions of dollars in added revenues from the gas.
Both Ottawa and Washington say they favor using sales of surplus Canadian gas to help finance the southern leg of the proposed pipeline. Last week Ottawa's National Energy Board said that Canada would have 2 trillion cubic feet of additional gas to sell to United States over the next eight years.