Concerning Alaska Natural Gas
January 12, 1988
Administration has been dedicated to encouraging free trade and to removing
regulatory impediments that inhibit the development of our Nation's natural
resources. Proven natural gas reserves in the Prudhoe Bay area of Alaska's North Slope represent approximately
15 percent of total U.S. gas reserves. In
addition, undiscovered, recoverable supplies of natural gas from Alaska's North Slope may exceed 100 trillion
cubic feet. There can be no doubt the development of Alaskan oil has played an
important role in ensuring adequate energy supplies at reasonable prices for
American consumers. I believe efficient development of Alaska natural gas will
provide similar benefits. Leaving this resource undeveloped benefits no one.
development of Alaska natural gas on the
basis of market financing could encompass the export of some of this gas to
other countries. Because world energy markets are interrelated, our Nation will
benefit from an enlarged international gas supply. Production of Alaska reserves will increase
the amount of secure energy sources available at market prices and, thus,
displace less secure or more expensive energy sources, including oil from the Persian Gulf.
Alaska natural gas can be exported to nations other than Canada or Mexico,
Section 12 of the Alaska Natural Gas Transportation Act (15 U.S.C. 719j)
requires me to find exportation ``will not diminish the total quantity or
quality nor increase the total price of energy available to the United
States.'' In order to make this finding, it has been necessary to assess the
relationship of Alaska natural gas to the U.S. energy market.
exist adequate, secure, reasonably priced supplies of natural gas to meet the
demand of American consumers for the foreseeable future. This demand can be met
by lower-48 production and already-approved Canadian imports. If necessary,
this demand also can be met at lower delivered energy cost by coal, oil,
imported liquified natural gas (LNG), natural gas
from Mexico, and other energy sources.
these facts, exports of Alaska natural gas would
represent a judgment by the market that the energy demands of American
consumers can be met adequately from other sources at comparable or lower
prices. Exports of Alaska natural gas would not
diminish the total quantity or quality of energy available to U.S. consumers because world
energy resources would be increased and other more efficient supplies would
thus be available. Finally, exports would not increase the price of energy
available to consumers since increased availability of secure energy sources
tends to stabilize or lower energy prices.
I find that exports of Alaska natural gas in
quantities in excess of 1,000 Mcf per day will not
diminish the total quantity or quality nor increase the total price of energy
available to the United States.
finding removes the Section 12 regulatory impediment to Alaskan natural gas
exports in a manner that allows any private party to develop this resource and
sets up competition for this purpose. It is my belief that removal of this
impediment to private sector development of Alaska's vast natural gas
resources, using private sector resources with no government subsidy, will
benefit our entire Nation.
finding represents a determination that the effects of exports of Alaska natural gas on American
consumers would comply with the market criteria of Section 12 in the context of
current and projected future energy markets and that such exports would be
consistent with our comprehensive energy policy. It does not assess the merits
or feasibility of a particular project, but rather lets the marketplace
undertake a realistic consideration of various options concerning Alaska natural gas. The
operation of market forces is the best guarantee that Alaska natural gas will be
developed efficiently and that there is an incentive to find additional
do not believe this finding should hinder completion of the Alaska Natural Gas
Transportation System (ANGTS). This Administration supports the timely,
economic development of Alaskan natural resources. To this end the
Administration has removed all regulatory barriers to the private sector's
expeditious completion of this project. In particular, I want to reaffirm our
support for the special regulatory treatment of the ``prebuild''
portion of ANGTS, including the minimum revenue stream guarantees.
finding shall be published in the Federal Register.
[Filed with the Office
of the Federal Register, , January 13, 1988]
Note: The finding, which
was released by the Office of the Press Secretary on January 13, was printed in
the ``Federal Register'' of January 15.