A White House study group will recommend that President Reagan seek congressional authorization to lift the ban on exporting Alaskan crude oil, government and industry sources said yesterday.
A draft of the group's report says removal of the ban could increase federal revenues from oil industry taxes by $520 million a year. Alaska could get an added $267 million annually, and the producers could reap additional profits of up to $30 million.
The study group, headed by Danny Boggs of the White House Office of Policy Development, is expected to submit its proposal to the Cabinet Council on Energy and Natural Resources within a week.
The report will say that removal of the export ban would permit the oil to be sold for higher prices abroad, increase profits by reducing transportation costs and improve relations with Japan, the prospective purchaser of the oil. The prospect of increased profits would encourage further oil exporation in Alaska, the draft says.
Reports that the recommendation is about to be submitted have stirred opposition in Congress and in the maritime industry. Ship operators and unions are strenouously opposed to the idea because, as long as the oil is limited to domestic purchase, the Jones Act of 1920 requires that it be be carried in U.S.-registered vessels, but if exported it could be carried in foreign-flag ships.
Rep. Stewart B. McKinney (R-Conn.), a leader of congressional opposition to the export plan, wrote to President Reagan last week to remind him that Congress has refused to permit the export of Alaskan crude twice, and would surely do so again. Under the Export Administration Act of 1979, both houses of Congress must approve any Alaskan oil exports.
Boggs said that "there is no finalized White House report" on the oil-export proposal because "it has to be reviewed by the Cabinet," but he did not deny that the study group had concluded the ban should be lifted.
The report deals only with oil from the Prudhoe Bay field on Alaska's North Slope. This oil is carried south through the TransAlaska pipeline to a tanker terminal at Valdez. The pipeline carries about 1.5 million barrels a day, about 18 percent of U.S. domestic production. About one-third of that would be available for export.
The draft of the Boggs group's report, obtained by The Washington Post, says that if exports were opened to unrestricted tanker traffic instead of limited to higher-cost U.S.-flag tankers, transportation costs would be reduced from $5 to as little as 60 cents per barrel.
The increase in profits and tax revenues would be about one-third as great,the report says, if U.S.-flag vessels were used for the exported crude.
The report dismisses as "more illusory than real" the argument of export opponents that exports should continue to be prohibited for security reasons. If the United States wishes to protect its oil sources in the event of an emergency, it says, it can add a contingency clause to any export contracts with Japan.
Boggs said the recommendation about exporting Alaskan oil was not linked to any parallel agreement on a replacement source of crude. Industry reports have said that the exported crude would be replaced by imports from Mexico, but Boggs said he has been "telling everybody for months" that there is no connection between the two proposals.
From the administration's viewpoint, as the preliminary report notes, the export proposal would have two immediate advantages: increasing revenues at a time when the White House is searching for funds to help balance the budget, and improving the U.S. bilateral trade position with Japan.
Not only would it reduce the imbalance in bilateral trade, the report says, but it would be a useful bargaining chip in negotiations with the Japanese over export limitations.
The oil companies have not been pressing for the right to export the oil, because all of the oil being produced on the North Slope by Exxon, Arco and Standard Oil of California is utilized in their refineries. Standard Oil Co. (Ohio), the largest producer, sells a large part of its output to other refiners.
Lifting the export ban likely would kill two remaining proposed West-to-East crude oil pipeline projects, one in Panama and the other the northern-tier project fom Washington state to the upper Midwest.