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Secretary of Interior to make public the data and analyses supporting his decision to issue the pipeline permits, and has allowed scientists,
environmentalists, economists, and others to scrutinize the data and the
As a result several serious questions have been raised about the
Impact Statement, and the Secretary's decision has been sharply questioned
on several grounds.
I wish to emphasize three major points with respect to the Impact
First, despite its limitations, the data and information
contained in the Impact Statement have made a substantial contribution to
public debate on this issue.
The Impact Statement is th
single source of information on the proposed pipeline and its likely
environmental and economic effects.
To illustrate the importance and
significance of the Impact Statement, I would call your attention to my
review and evaluation. My analysis was based primarily on data from the
Impact Statement, yet I reached quite different conclusions, namely: that
a weighing of all environmental factors together favored development of a
Canadian corridor over TAPS: and that a weighing of economic and security
factors also tended to favor the Canadian corridor.
This second conclusion was highly tentative, however, because of a
major shortcoming of the Impact Statement. My second major point is that
the Impact Statement was inadequate in its consideration of alternatives
Specifically the most glaring weakness is the absence of data
and analysis concerning a common corridor through Canada for both oil and
natural gas pipelines. This appears to be an attractive alternative. And
on the basis of the data in the Impact Statement, one cannot rule out the
possibility that the common corridor through Canada might be superior to
TAPS on both environmental and economic grounds.
Third the Impact Statement fails to meet the NEPA requirements in that
it does not integrate environmental and economic information and analysis.
NEPA requires both a careful analysis of the economic benefits and costs
and a comparison and weighing of the economic gains with the environmental
The economic analysis in the Impact Statement is haphazard and in
many places plain wrong; and there was no effort made to bring the economic
framework was to show what kinds of additional information were most
critically needed in order to arrive at sound decisions which could permit
the appropriate development of economic resources and provide maximum pro
tection of environmental values.
Now that the pipeline issue appears to have come to Congress for its
ultimate resolution, Congress has a unique opportunity to compiete the
important work begun in the Impact Statement.
It can assure that no final
decision is made until the most relevant alternatives, especially the common corridor through Canada, are given thorough, searching and unbiased
In the spirit of NEPA, Congress can require that it be presented
with adequate information on the relevant alternatives, and that this
information be presented in a framework which facilitates comparison, and
Identifies the crucial tradeoffs.
One step in the application of an integrated analytical framework
is the summarization of data on environmental damages and risks. Ideally
one would want a single index or measure
of environmental hart for each
But in reality there are many forms of non-commensurable
The principal environmental hazards of an artic
pipeline are related to the wilderness character of the territory to be
traversed, the fragile nature of the ecological systems, and the uncer
tainties and risks associated with constructing and operating a pipeline
carrying hot oil across permafrost and through earthquake zones.
further concern has been the threat of oil pollution associated with tanker
and terminal operations and possible disasters of the Torrey Canyon
The Alaskan and Canadian routes are quite different in the kinds of
environmental damages and risk associated with them.
In attempting to
Talk the two routes on the basis of environmental harm, ore must weigh the
greater overland distance of the Canadian route and the dijruption associa
ted with it against the hazards of marine transportation and the risks of
earthquake damage accompanying TAPS.
The Department of Interior's own
analysis reflects these difficulties.
"No single generalized route appears to be superior in all (environmental)
respects to any other." However in all but one of six categories of
environmental harm, the Impact Statement ranked the Canadian alternative
The issue reduces to how important is the one category
favoring TAPS relative to the five categories favoring the Canadian route?
In my Evaluation I developed a framework which can help decision
makers such as Congress make informed judgments on questions such as
I identified the effects of marine oil pollution from tanker
operations and the threat of earthquake damage to the pipeline as the
critical factors affecting the relative ranking of TAPS and the Canadian
route on the basis of environmental risk.
Since the Canadian route had
no tanker phase, and did not traverse a seismic zone, it was strongly
preferred on these two factors.
And as a consequence, one had to place
a very low weight on these factors in order to justify a judgment that
TAP was preferred to the Ca
ian route on environmental grounds.
other words, unless one was willing to say that marine oil pollution and
earthquake hazards were un important elements of environmental damage, he
was compelled to favor the Canadian route.
My economic analysis of the two alternatives focused on four main
the net economic benefits or resource savings, differences in
national security, the economic costs of delay, and impacts on the balance
of international payments.
The net economic benefit or resource cost
saving is the difference between the resource cost of delivering Mid-East
oil to a particular market and the
st of delivering an
Alaskan oil to the same point. For both routes, the cost of delivering
Alaskan oil is substantially below the cost of the imported oil it would
replace indicating substantial economic benefits from development. The
relevant question is which alterative has the higher net economic benefit
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for society. Although the cost of delivering Alaskan oil to the Mid
West is greater than the cost to the West Coast, the cost of the imported
alterative is higher in the Mid-West, too.
And although there is great
uncertainty in the data, on the basis of the figures provided in the Impact
Statement, the net economic benefits of the alternatives are approximately
equal, with a possible slight preference going to the Canadian route.
might add that my colleague, Professor Charles Cicchetti has made a year
long study of this issue.
And on the basis of independent data and a more
careful analysis than is possible with the data in the Impact Statement, he
has concluded that the Canadian route is definitely superior to TAPS on
There are two points to be made concerning this conclusion.
first is that there has been no adequate analysis of the economics of
a common corridor for oil and gas.
It seems likely that the cost of
the oil pipeline would be reduced if the oil and gas lines could be
built through the same corridor.
If this is so, the economic superiority
of the Canadian route would be well established.
As I said before a
major shortcoming of the Impact Statement is that it did not analyze
The second point concers the likelihood that the Canadians would
require that part of the capacity of the line be reserved for Canadian oil.
This would in no way alter the economic benefits per barrel of oil delivered
to the U.S.
If the full capacity of the pipeline cannot be used for Alaskan
oil, the relevant question becomes:
should additional capacity be planned
and built along the same corridor?
The answer is probably "yes". The present
plan for TAPS does not call for full use of pipeline capacity until the 8th