The Economics of Natural Environments: Studies in the Valuation of Commodity and Amenity Resources

By John V. Krutilla; Anthony C. Fisher | Go to book overview

CHAPTER 10
THE TRANS-ALASKA PIPELINE: ENVIRONMENTAL CONSEQUENCES AND ALTERNATIVES

1. INTRODUCTION

In November of 1973 Congress amended the Mineral Leasing Act of 1920 and provided authorization for the Trans-Alaska pipeline (TAP) to short circuit some difficult legal issues pending before the courts. This marked the end of a long period of deferred action due to the controversy over the environmental impact from exploiting and transporting oil that had been discovered on the North Slope of Alaska's Brooks Range.

The planned transport facility, a hot oil pipeline destined to cross arctic tundra and some very active seismic zones in its near-800 mile length, has many and varied environmental hazards that are discussed in section 2. In the light of these problems, environment and conservation-conscious citizen groups had intervened to ensure that an adequate environmental evaluation be undertaken before a permit was issued for rights of access across federal lands. The process of undertaking the necessary studies and sorting out the legal tangles that ensued took nearly 3½ years. One of the important studies that played a significant role in identifying and evaluating the alternatives, and in illuminating related public policy issues, was Charles Cicchetti Alaskan Oil: Alternative Routes and Markets, from which the materials and analyses of this chapter are largely drawn.

Since completion of Cicchetti's study early in 1972, when the decision on the pipeline was still pending, several important developments have occurred. The decision for which the Cicchetti analysis was relevant1 has since been made in favor of the Trans-Alaskan route. The price of imported crude--an element in the analysis--has roughly quadrupled in the wake of the Arab oil embargo and the OPEC pricing policy. Nevertheless, to the extent that the inflation in construction costs has not offset the rise

____________________
1
The Cicchetti proposed alternative, a Trans-Canada pipeline, was reflected in the Bayh-Mondale amendment which failed passage in the Senate by a tie-breaking vote cast by then Vice-President Spiro Agnew.

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