The growth in domestic natural gas and crude oil production has fundamentally shifted the energy supply and demand balance in key U.S. energy markets. Many analysts and energy producers argue that there is currently an oversupply of natural gas in U.S. gas-producing regions (with some important exceptions), and that supplies of certain light sweet Western crudes (notably from the Bakken region of Montana and North Dakota) exceed the demand of Gulf Coast refineries, which are configured primarily to process heavy crudes. The result has been a spate of applications by the U.S. natural gas industry for federal permits to export natural gas to overseas buyers. Such exports are permitted by statute, subject to a national interest determination by the Department of Energy. Perceived oversupply of Bakken crude oil has similarly led to calls by some market stakeholders and policy makers for a relaxation of the federal restrictions on crude oil exports. Numerous legislative proposals in the 113 th Congress, such as the Natural Gas Export Promotion Act of 2014 ( S. 2494 ) and the Crude Oil Export Act ( H.R. 4349 ), would facilitate increased exports of domestic energy resources. Whether—or to what extent—the United States should allow overseas exports of crude oil and natural gas is the subject of ongoing Congressional debate. However, it may be noted that U.S. exports of both natural gas and crude oil are not new. Congress and prior presidential administrations have authorized such exports before in circumstances where they were viewed as beneficial to the United States. The case of Alaska is of particular relevance because it is a major energy producer and has a history of both crude oil and natural gas exports going back several decades. In the context of the current export debate, a review of Alaska's experiences with crude oil and natural gas exports may offer historical perspectives of value to policy makers. These provisions were incorporated by reference in the North American Free Trade Agreement (NAFTA). Alaska LNG Project

Arctic Alaska has substantial natural gas resources. Alaska's experience shows that—under a specific set of circumstances—such exports have been viewed as in the national interest both by Congress and successive presidential administrations. Regional production trends, market prices, and local commodity demand have all been important considerations in establishing export policies for Alaska. It is also instructive to note that, even with long-standing export approvals in effect, exports of crude oil and natural gas from Alaska have been relatively modest. Ten years between crude oil export cargoes from TAPS, for example, suggests that production economics and competitive market forces will be the ultimate determinant of export volumes where exports are permitted. In the context of broader U.S. oil and natural gas export policy the Alaska experience may raise several key questions. To what extent does the rationale for energy exports from Alaska—which is geographically isolated—apply to other U.S. supply regions? What is the interplay between overseas exports and the maritime shipping industry? What are the expectations for capital investment by developers to support export production and how might they affect the nation's overall oil and gas supplies? What are the environmental impacts of increased production for export? How might international trade agreements influence the U.S. government's ability to tailor its oil and natural gas export policies by region? As Congress continues its oversight of the nation's energy resources, understanding these issues may be important. (2) Crude oil subject to the prohibition contained in paragraph (1) may be exported only if—
(A) the President so recommends to the Congress after making and publishing express findings that exports of such crude oil, including exchanges—
(i) will not diminish the total quantity or quality of petroleum refined within, stored within, or legally committed to be transported to and sold within the United States;
(ii) will, within 3 months following the initiation of such exports or exchanges, result in (I) acquisition costs to the refiners which purchase the imported crude oil being lower than the acquisition costs such refiners would have to pay for the domestically produced oil in the absence of such an export or exchange, and (II) not less than 75 percent of such savings in costs being reflected in wholesale and retail prices of products refined from such imported crude oil;
(iii) will be made only pursuant to contracts which may be terminated if the crude oil suppliers of the United States are interrupted, threatened, or diminished;
(iv) are clearly necessary to protect the national interest; and
(v) are in accordance with the provisions of this Act; and
(B) the President includes such findings in his recommendation to the Congress and the Congress, within 60 days after receiving that recommendation, agrees to a joint resolution which approves such exports on the basis of those findings, and which is thereafter enacted into law.
Recent growth in U.S. natural gas and crude oil production has fundamentally shifted the energy supply and demand balance in key U.S. energy markets. Many analysts and energy producers argue that there is currently an oversupply of natural gas in U.S. gas-producing regions, and that supplies of certain light sweet Western crudes (notably from the Bakken region) exceed the demand of Gulf Coast refineries. The result has been a spate of applications by the U.S. natural gas industry for federal permits to export natural gas to overseas buyers. Such exports are permitted by statute, subject to a national interest determination by the Department of Energy. Perceived oversupply of Bakken crude oil has similarly led to calls by some market stakeholders and policy makers for a relaxation of the federal restrictions on crude oil exports. Numerous legislative proposals in the 113th Congress, such as the Natural Gas Export Promotion Act of 2014 (S. 2494) and the Crude Oil Export Act (H.R. 4349), would facilitate increased exports of domestic energy resources.
Whether—or to what extent—the United States should allow overseas exports of crude oil and natural gas is the subject of ongoing Congressional debate. However, U.S. exports of both natural gas and crude oil are not new. Congress and prior presidential administrations have authorized such exports before in circumstances where they were viewed as beneficial to the United States. The case of Alaska is of particular relevance because it is a major energy producer and has a history of both crude oil and natural gas exports going back several decades. Exports of crude oil from Alaska are currently authorized by three different statutes pertaining to (1) crude transported via the Trans Alaska Pipeline System, (2) Cook Inlet crude, and (3) crude oil exported to Canada under the North American Free Trade Agreement. Export of Cook Inlet natural gas from the Kenai LNG terminal has been authorized repeatedly since 1969. Export of natural gas from Alaska's North Slope was authorized in 1988, although the applicability of this authorization to the proposed Alaska LNG Project has not been resolved.
In the context of the current export debate, a review of Alaskan crude oil and natural gas exports may offer historical perspectives of value to policy makers. Alaska's experience shows that—under a specific set of circumstances—such exports have been viewed as in the national interest both by Congress and successive presidential administrations. Regional production trends, market prices, and local commodity demand have all been important considerations in establishing export policies for Alaska. It is also instructive to note that, even with long-standing export approvals in effect, exports of crude oil and natural gas from Alaska have been relatively modest. Production economics and competitive market forces will be the ultimate determinant of export volumes where exports are permitted.
In the context of broader U.S. oil and natural gas export policy the Alaska experience may raise several key questions. To what extent does the rationale for energy exports from Alaska—which is geographically isolated—apply to other U.S. supply regions? What is the interplay between overseas exports and the maritime shipping industry? What are the expectations for capital investment by developers to support export production and how might they affect the nation's overall oil and gas supplies? What are the environmental impacts of increased production for export? How might international trade agreements influence the U.S. government's ability to tailor its oil and natural gas export policies by region? As Congress continues its oversight of the nation's energy resources, understanding these issues may be important.