Nixon, Morton & Haig on Trans-Alaska Pipeline and Energy Policy

52:22I see a big map over there.
52:25Yeah, it's a great big one.
52:28Let me come to a couple of points where I've got all the maps.
52:38What do you have on the side?
52:43Well, here's the situation, Mr. President.
52:45We put the one-on-two statement over there under the guidelines 30 days, but because of the size of the thing, and because of the hell that's been raised, and because of another little gimmick in it, and that is that the court is requiring us to take 15 days before a permit is issued, and given that much lead time, that we just arbitrarily took 45 days, and that pretty well...
53:12I guess the point I'm getting at is, could you delay the report until after the election?
53:20No, sir, it's already over there.
53:21It's public knowledge.
53:23It's public knowledge.
53:24And so, what does that mean?
53:26Well, it's the 102 statement.
53:27It's the environmental impact.
53:29It's a decision therefore.
53:30Let me state it.
53:37I'm just trying to think.
53:38I know about the department.
53:39I'm not talking about what we do.
53:41There are no other reports involved, Mr. Craig.
53:44Well, then what happens now?
53:46Well, the thing that happens now is that if we decide to issue the Trans-Alaska pipeline card or permit, we give the court a 14-day notice or 15-day notice.
53:57And then at the end of 15 days, we...
54:05Presumably, we wait for the judge to schedule it here, because we are now enjoying it.
54:11We can't actually issue the ballot.
54:12Well, what I'm getting at is that you have to bite the bullet now.
54:18We can bite the bullet, but... Do you have to?
54:20No, sir, we don't have to.
54:21We can stall a little bit.
54:24If you're getting at whether we should stall or not up through the elections, I think there's great danger in doing that.
54:30For many reasons.
54:31I can go through this little exercise here in about five minutes that will, I think, point out some of the dangers.
54:40One of the things there are, Mr. President, is that you understand, I mean, as far as what we do, we'll take your recommendation.
54:48Well, let me say a couple of things that I think I want you to have in mind.
54:53There's something in here that is to the effect that this will put in through Canada Helps Internationally.
54:59Forget it.
54:59I don't care one damn about the Canadians.
55:01In fact, I want to screw this to Trudeau when I'm up there.
55:04Now, of course, if we do, we'll do it, but the Canadian thing is not in our interest.
55:10For other reasons, we don't want to do it with the Canadians.
55:12Well, the point is that, from a political standpoint, if you wage jobs in Alaska against what environmentalists in Los Angeles are going to think about the Alaska pipeline, it's a loser, it's a bird in the hand, or against maybe George Bush.
55:30But on the other hand, I do know that
55:33That's for the political staff.
55:34Now, as to what we do is concerned, I'd rather remember Adam.
55:38It seems to me it's quite clear you have to go through Alaska.
55:41Well, the other thing, you don't think with that circuit court that people can win, right?
55:47Sir, I think I'll say that again.
55:49You say we have to go through Alaska versus Alabama.
55:53Yeah, we can.
55:55Well, not necessarily.
55:56No, sir.
55:57That's what I want to talk about here.
56:01Go ahead.
56:01Well, you've hit the issue.
56:03I know you think he's a politician.
56:05I mean, let's not kill ourselves.
56:07Now, Alaska's just one little state.
56:11Jobs are one thing, and what people are going to do because they're concerned about the wildlife in Alaska, and what people are going to do with the environment down here is something else.
56:21Very quickly, sir.
56:24Here are the pipelines that now cross the border.
56:26There's one here that goes from Maine to Montreal and handles about 500,000 barrels a day.
56:32There's one that goes from Edmond into the Midwest that now has been looped and enlarged and is handling about 1.3 million barrels a day.
56:39There's a fraction of 1,000 barrels a day going through from
56:46The tar sand gets to this area, not the tar sand there, but the Edmonton area into Montana.
56:51That's a Husky oil pipe.
56:53Then there is a Trans Mountain pipeline that has a capacity now of about 200,000 barrels a day going from Edmonton to Seattle.
56:58The thing is that the Canadians are jumping the gun a little bit here.
57:04I don't want you to get up there and get forced into any kind of a situation where the press and everything else...
57:14jumps on us and makes the situation with the environmentalists any worse than it might be.
57:20That's the whole issue.
57:22If you go through Alaska, I mean Canada, about the only way you can do it that I can see it is to work out an international corporation, one-third, one-third, one-third, one-third the Canadian government, one-third the oil companies, and one-third the American government.
57:39Price tag on that is about $1.7 billion for each participant in that.
57:43But this has a lot of long-range advantages for us in that it gives us an opportunity here to spread out at any given time in order to put this oil in any mix that we want, either into the Midwestern marketplace or into the West Coast marketplace, and it does have some complications here in getting into Southern California.
58:06The other thing that it does, it avoids the spasming route.
58:11You've read the memorandum.
58:13It avoids the maritime aspects of this thing.
58:19We have not taken into consideration the strike aspect.
58:24I think that actually seems to me the case you make for the Canadian thing is a very good one.
58:31I'm not going to say that.
58:34The question is when you do it.
58:38Well, that's right.
58:40My personal feeling is that these three electrical bolts are a little bit in jeopardy anyway, and it's touch and go, and you've got steam in the seat.
58:51I think that my personal feeling today is based on the fact that we've got 57,000, 52,000, and you've got 6,000 communications here at the White House.
59:01Urging us not to do this would indicate that we've got some pluses here, but I don't know any way, Mr. President, both of us are...
59:10I've made a lot of political judgments in our time.
59:12I guess some have been right and some have been wrong.
59:16In short term, there will be a tremendous screen here, but what we have done here in terms of this job thing is not to say, considering this, we have capitalized the difference and there will be a lot of jobs involved.
59:28Building this pipeline also has a lot of very risky things for Alaska.
59:33It builds its employment up, and then all of a sudden it cuts out, because it doesn't take anybody.
59:38The big area, the 2,500 jobs it takes to develop this oil field in here, that's all stealing the package, of course.
59:45And about 20% of the pipe that's in the package is going this way.
59:49I think it would probably be pretty rough on him, yes sir.
59:56I'm not sure he's going to elect him either, but it would certainly be in better shape.
1:00:01I don't think there's any question about it.
1:00:05Because Alaska's got about 15% unemployment.
1:00:14Well, it's going to be worse than that, sir, if we go over the pipeline, because what's going to happen is that all these people are going to be, these drifter people and construction people are all going to be coming in there, and they're going to be, it's going to be a boom or bust situation in any way you figure.
1:00:28You've got about, oh, we figure somewhere in the neighborhood of 400 or 500 jobs in the fishery down here that are probably long-term to be jeopardized by.
1:00:37This thing, but that's not too important.
1:00:40The big thing is whether we should want to take an initiative, whether you want to take an initiative to say the international thing is ruled out.
1:00:48Well, sooner or later though, Mr. President, somebody's going to have to address themselves to a North American oil policy.
1:01:01And we're going to have to have, we're using 15 million barrels a day.
1:01:05Now in 1985 we're going to have to use 30 million barrels a day.
1:01:09A lot of it's coming from Canada.
1:01:11One of the other things is they want to develop the gas potential in this area.
1:01:16In my opinion, we'll get another gas pipeline much quicker if we go this route.
1:01:21In fact, we might be able to build them simultaneously at least part of the way.
1:01:26There are large gas reserves in this part of Canada.
1:01:28Most of Canada's undeveloped oil reserves, they think, are in this area here.
1:01:34So this doesn't mean as much as this gas area here.
1:01:39It probably got a year's difference in time on the screen.
1:01:43If you figure we're going to the Supreme Court, it'll take us about a year.
1:01:47If you figure we're going to do this, it's going to take us about two years to restructure.
1:01:53I don't know how long it would take the Canadian government to act.
1:01:56This would have to be an act of Congress, too, because we're going to participate in it in a financial structure such as a...
1:02:06uh three-way corporation or an international corporation i think the canadians are a little optimistic on being able to raise a billion seven anymore i i don't know but that's because the thing is this mcdonald's coming down there he blew off from the press this morning again in the oil daily that says of course that they're willing to participate in any kind of reasonable thing they don't want these ships off their coast and all that of course he's making some political hay out there out of that i really uh my feeling is uh uh that
1:02:36that rather than get trapped by them and get all these people from every single metropolitan area across the country, is that some kind of editorial against this Alaskan pipeline.
1:02:46If we're going to move on the thing, let's let Richard Nixon get the credit for it.
1:02:51Let's let it be our vision.
1:02:53Let's let it be our big gesture that, boy, we're going to tie in the natural resources of the great cotton and all that.
1:03:01We're out ahead of the action.
1:03:03And you're in a heck of a good position on that.
1:03:05Your feeling basically is, just so I don't forget last minute,
1:03:10No, sir, I think we've got to go, you can't forget Alaska, but I'm not so sure that this pipeline is a solution.
1:03:18No, it is at the moment.
1:03:21I couldn't tell you any reasonable alternative plan that would keep those three electoral votes.
1:03:29And on the other hand, if this thing is good, and we can work up some other things, and get them some land.
1:03:37I've got this thing now where if I can get this land board going up there, that Jack Martin's going to be chairman of, if he can go along, we can start giving the Alaskans some land.
1:03:47We've owned 98% of it all these years, yeah.
1:03:49And if we can let them draw down maybe as much as 35, 40 million acres of land, and they can get some homesteading going, and that kind of thing,
1:03:58And begin to develop maybe some hard rock minerals in some of these areas where they're getting some raleigh.
1:04:04I think so.
1:04:05But I think that we are hurting pretty badly in the Alaskan boat on the Native Claimantsville.
1:04:11And I don't think we're going to fully recover from it.
1:04:14The Native Claimantsville?
1:04:16The Native Claimantsville, that's the one where we set aside the 80 million acres of land.
1:04:21Well, that was supposed to help us.
1:04:24It'll help us with the Native, but the trouble is the Native don't control the boat up there.
1:04:28Hva er det?
1:04:29Hva er det du gjør?
1:04:31well we did it because we pretty well got trapped in let me tell you something sir this thing helped us a great deal across the country yeah and uh i uh this uh this may claim bill don't look at the media on that one i dragged my feet for quite a while but uh that's gone that's over the damn probably an argument the one thing we never could have gotten a decent land title up there and that's one of the reasons we did we felt that had to be done in order to get these carters yeah
1:05:00And I think perhaps it turned out to be a good thing.
1:05:02The whole thing all sounded here is whether you want to, whether you want to substantively discuss this question in this off-line line in Canada, or whether you don't.
1:05:15And if you do, what political ramifications of it are.
1:05:22That's what it really gets down to.
1:05:24If I was alone on the island,
1:05:27I would try to work out a program to recoup the loss of the oil companies to the tune of about $60 million in here, which would recoup their investment losses, and add up probably another $30 million.
1:05:39They put quite a bit.
1:05:41I'd put about $30 million in the capital structure that would handle the movement of the pipe.
1:05:46In other words, I would buy the pipe for this thing, FOB, where it is.
1:05:51It's in Fairbanks, it's in Valdez, and it's in Trudeau Bay.
1:05:54And that gets you down to about here.
1:05:56And the quality of the pipe that you need for the rest of this weight can be lighter because it's not subjected to permafrost.
1:06:05I don't know what it means to... We've never been able to measure this environmental vote.
1:06:13We've been able to measure what they can do in the courts.
1:06:17No way I can tell you everything.
1:06:21But I've told you before, it's the third issue.
1:06:27It's after the war, after jobs, it's the third issue.
1:06:30I don't know whether George's people or anybody can research that and tell us whether that's right or wrong.
1:06:38That's the way we kind of structure it.
1:06:42But I would hate...
1:06:44It would just kill my soul if you got up there and ate me.
1:06:47They came up with this idea and scooped you on.
1:06:52And that's what I don't want to have happen.
1:06:56If there's any way, I would hope it wouldn't come up.
1:06:59One of the things we've actually to do, which I think is a good gesture, and a good thing, is we are based on the side of a park right there.
1:07:08We have selected this area of very high quality for park purposes.
1:07:12This could be the first great international park in the world, and that's right.
1:07:16We'll give you something to talk about later.
1:07:18Yes, sir.
1:07:18I'm sure I hear it.
1:07:20Right there.
1:07:20The other thing is that they will do, that's again the wildlife range, our wildlife range is there.
1:07:28They say if we will give them right away, put the gas line down through here on the edge over there, they will add an equal amount to the present wildlife range in Canada.
1:07:39Which would be a thing, we'd have a good Mexican standoff with all the wildlife people in the country.
1:07:46And they would like that.
1:07:50Everybody would like us to go through here as far as the Midwestern congressmen are concerned, I think.
1:08:00And we have a problem here as to what we're going to do to service the rest of Region 5.
1:08:07There are no significant pipelines north and south in the California mountains.
1:08:14There's one, there's a butt line that comes off this one and goes down into Arkansas there.
1:08:20The maritime system, I don't know how you feel about it and how much the strikes have affected it.
1:08:25We have been unable to tell.
1:08:28But all of this movement depends entirely on maritime.
1:08:35One of the things we've got going for us is that this does increase our merchant marine capability because those are all drones that have chips.
1:08:49Well, here you actually, you're recommending the other one, aren't you, the Canadian one?
1:08:55May I make a couple of comments, Mr. President?
1:08:57Sure.
1:08:58With regard to your concern, Roger, that the Canadians will discuss it during the President's visit to Ottawa, the Minister was in the seat today, and he made it very clear that he would not expect that they would be in a position to discuss either...
1:09:36That would, to a doubt extent, pass the election, and at that point, if this alternative seems to be an attractive one, we won't jeopardize the political situation in Alaska, and we could at that point go down and take the alternative course.
1:09:52Finally, with regard to the gas pipeline.
1:09:56Today's paper announced, and I've had a chance to check, that there is already a proposal that contracts have been signed for putting a gas pipeline down in McKenzie Delta into the Midwest.
1:10:08Well, this morning's copy of the oil table said it was imminent.
1:10:10It didn't make it out of the river, so a couple of days before, three Germans said they had entered into it.
1:10:15But my concern is, let's just look at the political side of this.
1:10:19Let's assume we stall this thing through the election.
1:10:23Let's assume we do that.
1:10:25One thing, that move is the last thing.
1:10:29The court's going to tell us.
1:10:30Yeah, but that's the only thing he's got going.
1:10:33That's the only thing he's got going for you up there.
1:10:35Of course, it's probably going to be stalled through the election anyhow.
1:10:38We can do it.
1:10:39You can lose it anyway.
1:10:41Because they don't understand that.
1:10:42They can't understand the courts.
1:10:45So it's going to last for something.
1:10:49What does it do in the rest of the country?
1:10:57If the courts are doing it, the environmentalists are beating Nixon.
1:11:01and i don't like that i'd like us to get a position of leadership and a positive position i'd like to have i'd like to have nixon come out on the front end of the program whatever it is as a leader on the thing and he has recognized a need for a north american oil policy and after all the studies
1:11:22This is the way we're going to go, and sure, you're going to have to call Bob Anderson in here, you're going to have to placate him, but if we can pick up their piece of their law some way in this thing, I think we'll be all right.
1:11:34I just hate to see the president get behind it, and be behind the issue, because you've got something rolling so well with the challenge.
1:11:43And I don't think that the rank-and-file people...
1:11:47have a real understanding of this sort of national feeling that's growing up in Canada.
1:11:52Oh, I know.
1:11:53I don't think they have it.
1:11:54I think in Canada they may, but over here they don't.
1:11:56I don't think our borders affect them.
1:11:58I realize that.
1:12:00And then you're going to go to Russia, and the thing is rolling so well, and this is a big thing, and this seems to be the thing that got left.
1:12:12It beat us down here in the Gulf, in one instance.
1:12:16Where was that?
1:12:19Well, we had a sale, sir, in the Gulf of Mexico, and the courts had joined us because we had to comply.
1:12:30Yeah, because they said we had to comply with the procedures of NEPA, and we were going to reschedule the sale across Jordan, I guess, in revenues.
1:12:41I don't know what we anticipate, but they're pretty big.
1:12:43A million and a half dollars should be saved.
1:12:48I don't know.
1:12:49I've thought about this thing so much since the president, and I'm probably the last guy in the world to think about it.
1:12:53I realize I've got to make the gut decision somewhere.
1:12:56But I think what John Whitaker had a good idea on out there is that we ought to...
1:13:03We ought not let him.
1:13:04We ought to all get together.
1:13:06Maybe Peter Flanagan and I ought to see him at the same time.
1:13:12He's having lunch here with John and me.
1:13:14Why don't you come to that lunch?
1:13:16That would be a courtesy call.
1:13:18I'm not sure.
1:13:22Over.
1:13:23Over.
1:13:52It really is a tough question, and this is an awful bad thing for us to bring a tough question in here without getting it right.
1:14:02I feel very bad about that, I really do.
1:14:04But I didn't want you going up to Canada without knowing what our thing was.
1:14:08I don't believe we want to even think in terms.
1:14:11We've got 45 days here where we don't have to do anything.
1:14:14And I don't think we ought to do anything, but I don't want to get tricked where the Canadians come out
1:14:19The heroes with the American environment, let me say this, if we're going to do it, we might as well, I mean, when I say with regard to the Canadian side, we have other things that we have to play with that, but if we're going to do it, we might as well do it then.
1:14:35Well, that's the point.
1:14:36That's why I want to bring it over here.
1:14:37It's fine.
1:14:38It's fine.
1:14:38If we're going to do it, I don't know whether you could possibly get it ready by that time.
1:14:43Well, we've got to see the color of their money.
1:14:46There's no way I think you can do this without it.
1:14:48Possibly not with that Canadian position.
1:14:52I don't even see the color of ours.
1:14:55And that's the point.
1:14:57You're looking at a billion and seven hundred million probably to be expended over a period of time from, I would say, the latter part of the first of the year, 1974, up through, I would think, about 1977.
1:15:14It takes about two and a half, three years.
1:15:16This gets the oil on the screen for the very good.
1:15:18Doesn't have McDonald's saying he's coming down for the purpose of discussing wealth?
1:15:22He just said that today.
1:15:23He had a press conference up there.
1:15:24He said, I want to come down and meet with the Secretary of the Interior and talk to him about Canadian participation, financial participation in a pipeline venture that could be as much as five billion dollars.
1:15:36The venture could be as much as five billion dollars.
1:15:38Now, I don't know.
1:15:40The trouble is this fellow McDonald's doesn't have a very...
1:15:44For it doesn't talk, I don't think, from a very strong franchisor basis.
1:15:49He's a minister of energy.
1:15:52I've got a whole big dossier on him, but he's a young fellow that's out trying to make a little political dust.
1:16:00He was minister of defense.
1:16:04And his deputy, Jack Austin, is highly regarded by the government there.
1:16:10He's very competent.
1:16:12Well, I figure what I'm going to do then...
1:16:16Let's take it once, let's take it out of the White House, and have a meeting in your office, and you attend it there.
1:16:23I don't want it here.
1:16:24I don't want anything with oil, or, you know, tied to this thing at this point.
1:16:29I think that's a good point.
1:16:30I'd rather have you, you know, and you invite people that you, you know, have the others there, but I don't want them coming here.
1:16:37Sure, yes, sir.
1:16:38And we have our restaurant, and you're the environmentalist, and all that sort of thing.
1:16:44I probably can't...
1:16:48Try to build a dam, or sell some oilies, or something like that.
1:16:52No, I understand.
1:16:53I think we've got a lot of good arguments there.
1:16:56Maybe the pipeline across Alaska isn't a good idea.
1:17:00Certainly the argument about the effects of tankers, the strikes on tankers, the maritime thing being like this, of course it wouldn't have changed.
1:17:06You can't really make sense of it.
1:17:10But there is something to be said with our, with the Canadians, to do something with them to get at it.
1:17:14And if they want to, I just can't imagine a country where people can never get that kind of money.
1:17:24There's one other aspect to it, Mr. President, I think, and we have no way to put a handle on this.
1:17:30To make this pipeline go, and Canadians are going to want to demand about a third action, in other words, if they find oil in this area, and there is some oil in it, and there is a lot of gas in this area, we know that.
1:17:44To make this common carrier pay out, there's going to have to be some Canadian product in it.
1:17:49And I believe that we would have a better handle on getting that Canadian product into the American marketplace if that pipeline existed.
1:17:58And we're in the short rows as far as oil and gas are concerned in the Middle Ages.
1:18:03Here's what I would like to say, since he is your opposite number, let's pull him out of there over to your department, and then the White House people can meet there with you, you know, and discuss the whole thing.
1:18:16But I don't want him to come here where he thinks he's talking to the president, basically, about it, which of course he does when he's here at the White House.
1:18:24See what I mean?
1:18:25Oh, yes, sir.
1:18:25And then after a while, maybe we can come up with a recommendation.
1:18:32We've got time, I think we're in good shape, to study this and to give a gradual consideration.
1:18:38And we're going to think that, I don't know why, but it hasn't leaked out.
1:18:42We've done the work we've done, it hasn't leaked out at all.
1:18:47The only thing that's been said is that we have nothing.
1:18:52Only the report, though, is an environmental impact statement.
1:18:59But the fact that we've been considerate,
1:19:02Ourselves, this Canadian alternative, has not been done.
1:19:06It probably will, because everybody will speculate on the fact that this fellow was down here, and he said he's coming here to talk.
1:19:13I'm going to have to respond to him, but we'll figure out how to do that with no trouble.
1:19:17The way you should handle it, of course, is that, well, we discussed various things with the Canadians, and they are interested in this, and we're talking about it, and so forth and so on.
1:19:28Yes, sir, no question.
1:19:28He's been very fuzzy on us.
1:19:30Oh, yes.
1:19:31Unless it gets to the point where they can do something.
1:19:35Well, the thing about it is, if we don't have an option, unless they are able to get in, right?
1:19:44That is correct.
1:19:45So we better find out.
1:19:47This is true.
1:19:48The thing we want to do is protect your claim, right?
1:19:51And you go to Canada.
1:19:52That's the whole purpose of this meeting here today.
1:19:54I think you can talk to them about what is the situation, what are you prepared to do, or is there something you want to discuss, and that sort of thing.
1:20:03Try to get the deal down as well as you can.
1:20:07I don't know when I go to Canada.
1:20:10I mean, we haven't got much to talk about at all, so I'll just let it go.
1:20:14Well, Eli will bring us up, you see, and the point about it is, I think you can say, well, let's get your Minister of Energy and our Secretary of Interior to see what mutual ground there is, and you can get it out, you can get it out of that thing, but if he comes up and makes a lot of noise in the press up there, he suggests to the President of the United States to just be an alternate route,
1:20:38Then, the environmentalists in this country, and I don't know how big they are, but the people who are on the other side of the fence say, well, hell, President, we need to talk about that, you see, and I don't want to get you in that position.
1:20:51Mr. President, could I?
1:20:53Sure.
1:20:56Going back two or three years, it seems to me we always felt that the McKenzie Valley pipeline made more sense.
1:21:07And we did have some early discussions with the Canadians.
1:21:12And the hang-up with them was, as I remember, not so much the money, but the arrangement about the security of the oil.
1:21:19That if the oil, so to speak, came through Canada, and there was some sort of Middle Eastern oil crisis of some sort, then would they siphon that oil off and hold it hostage against American oil on the east coast of Canada?
1:21:38That is essentially the price that drives the structure, which we were trying to work out.
1:21:42That is one of the things you are trying to work out now, as I understand it, the guarantee, and then from Canadian I hope they aren't going to raise the price.
1:21:51And so, in a sense, in the background, is the notion that we wanted them to make this kind of an agreement, and they wouldn't do it.
1:21:59Now, if they're going to be more forthcoming about that,
1:22:02That changes the situation quite a lot, and I think there's never been any question about it.
1:22:09That's got to get an answer, but you've got to put that price, that guarantee to them.
1:22:13Of course, they already have it.
1:22:15The other thing, the way Trudeau has taken common here, I don't know, maybe the Canadians think they can host it, but I don't know.
1:22:23I think that trying to push the agreement that we couldn't get out of the Mondo is telling us to go to hell.
1:22:31That's a good deal from our standpoint.
1:22:33If they think that pushing the agreement on us that we tried to get before that they wouldn't talk about is telling us to go to hell, well, that's weird.
1:22:41That's a good thing from our standpoint.
1:22:43The other point has to do with Alaska and the...
1:22:48It seems to me the problem for the Alaskans is...
1:22:58that they had, they thought, this gigantic oil and gas field, which is much bigger than is currently estimated on that, from all the reports that we have, and which exploration has slowed way down and not stopped.
1:23:14Why?
1:23:15Because right now nobody knows how to get it out of there.
1:23:18And so they have this great...
1:23:21Bananza, which they can't do anything about.
1:23:24From a long-term standpoint, I'll just interrupt you.
1:23:29The Alaskans are much better off to find a good way to get the oil out of there.
1:23:37And then they make their money out of the royalties, right?
1:23:42I don't think this damn thing is a one-shot deal.
1:23:46Here's the question.
1:23:48There's a button right there after the money.
1:23:51This is boom and bust.
1:23:52And there they got raised.
1:23:54And I always thought that building was a pipeline.
1:23:57It's like a great highway or something.
1:24:01It is just like a highway over some country.
1:24:05Once it's gone, people leave.
1:24:07They leave for a while.
1:24:08At least they got the boom out of it then.
1:24:10They want that cluster one.
1:24:13They want to roll these plushies over.
1:24:14The boom for the job.
1:24:18Really, let's forget the Alaskan politics.
1:24:20I'm afraid there isn't.
1:24:21I had to raise it, because I knew that it would be raised by others if it wasn't.
1:24:26You know, Rog, several people have talked to us about it.
1:24:29All students will be down on our throats like the way this is.
1:24:31Well, we might as well work out something for him.
1:24:33I don't know what you can do.
1:24:35On the other hand, he could still make a deal.
1:24:38There are not many people up there that are...
1:24:42I'm going to be awful hard-pressed
1:24:46And we're going to have to get very defensive, delay this decision beyond the election, unless we've got it done for us by the courts.
1:24:55And I think if there was really any kind of a viable offer by the Canadians as far as that, we could restudy that.
1:25:04And perhaps something new would actually... You have a situation here from a political standpoint, Roger, that is very important, and that's Gravel, who was a wild man.
1:25:17And so you've got to be damn sure on this one.
1:25:19That's why I don't want it in the White House, for about 100 reasons.
1:25:21But I've got to keep it the hell out of here, so that he doesn't say that we're the ones that took those jobs away from the Canadians.
1:25:29Oh, yes, sir.
1:25:30Let's get it over here to where it belongs.
1:25:33I don't think we're anywhere near this decision yet, because of the very questions that George raises.
1:25:37But... Do I understand in the way you mean it?
1:25:45You'll negotiate passively with them.
1:25:47If they come up with some ideas, then you'll kind of... What's your proposition?
1:25:51We've gone to you before.
1:25:53All companies have gone to you before.
1:25:56What is your proposition?
1:25:57We know what we want you to do is this.
1:25:59I think you should all meet together.
1:26:03I'm talking about how they sort of let it pick off one after another, because I don't know how these guys operate.
1:26:08You all do.
1:26:09He'll run over here to Pete, and he'll run over to you, and then he'll come back and say, well, this and that.
1:26:13This is a very complicated deal.
1:26:15Each of you raise your questions, and then get your nails down.
1:26:19That's what I think.
1:26:20Then the final analysis is probably like that.
1:26:22See, you and he are opposite numbers.
1:26:25And he'll say, of course, in our show, here, you never know, he may have more authority than you think.
1:26:32He may.
1:26:33He may.
1:26:33He's been Minister of Defense.
1:26:34He's probably a fellow of some sort.
1:26:37I think he is.
1:26:37I think he is.
1:26:39I think...
1:26:39I don't think Trudeau would have come back down there if he was...
1:26:46If he was...
1:26:47If he was...
1:26:48If he was...
1:26:49If he was...
1:26:51Well, let's just have the meetings with it.
1:26:52You're familiar with what the alternatives are.
1:26:55We will... Sure.
1:26:56Let me see if you're informed.
1:26:58Let me tell you what I feel about it.
1:27:02First, looking at the whole thing, the best thing to do if the Canadians will go is to build it down there.
1:27:10Anybody can see that.
1:27:11So you go to the Midwest, you go to the Far West, and all the rest.
1:27:15Looking at it also from the...
1:27:18It's not really the best thing to do.
1:27:19The other reason it's the best thing to do, leaving out whether the environmentalists are going to help or hurt, I don't know.
1:27:24I mean, they might hurt, they might help, but I don't think that's an easy account.
1:27:29But I do know this, if we need the oil, as apparently everybody thinks we do, from that place up there, we've got to get it down there some way.
1:27:37My view is that the environmentalists will be strong enough
1:27:41The delay, the delay, the delay, and screw it up in Alaska.
1:27:45I thought, I don't think they'll ever get through with the Circuit Court of Appeals like it is.
1:27:49And not even knowing what will happen in the Supreme Court, because even though we've got four that I've appointed, you never know where those guys are on fire.
1:27:57So many nuts about that environment.
1:27:59Terrible.
1:28:00We didn't ask them about that.
1:28:02They may be all right on busting, but they may be wrong on that environment.
1:28:06So my point is, whether they're right or wrong is immaterial.
1:28:10The strongest point in your case, Raj, is the practical one that you just got to make, is that much as we love to put it through Alaska to satisfy our Alaskan friends, that court's going to kill it.
1:28:21And aren't you agree?
1:28:23I don't know about the plan and so forth.
1:28:24Maybe it takes long.
1:28:25Well, maybe it can come down there, but...
1:28:45If you get the Canadians to play, it's a good deal.
1:28:48And we have a little international benefit from the Canadians.
1:28:55We won't get it back from them.
1:28:58But doing something with them is a bad idea.
1:29:00You might downstream get more oil and gas from them, politically.
1:29:07George is quite familiar with this thing.
1:29:08As a matter of fact, I was learning to suggest that when you have a meeting, you stay out of it.
1:29:14I don't think you need to bother with it because you are handling the rest.
1:29:21But I think George might, unless you want to be aware in case it comes up, but George might sit in on this because he was also sort of involved in it.
1:29:32And what you say about pulling another oil industry?
1:29:35What I'd like to do with George, too, is to sit down and talk about the structure of an international corporation in which there was a third party.
1:29:44In this case, it would be a third party.
1:29:46Well, people call those things people.
1:29:50People present.
1:29:51The primary purpose of McDonald's coming down was not the pipeline, but was to pick up oil.
1:29:58A discussion that's been going on for a year and a half, which has to do with the national security aspects of our oil arrangements with Canada.
1:30:06And he wanted to come down and see Dave Lincoln and me meet with the State Department people, those three groups having discussed this national security matter.
1:30:17And to that end, I had asked him...
1:30:20and his deputy and the head of their energy board coming at lunchtime.
1:30:25No problem with that.
1:30:27And just not talk pipeline at all.
1:30:29That's a separate problem.
1:30:30Right.
1:30:30If you've been discussing that, that should be discussed as a different matter.
1:30:36That has to do with the guarantee of a supply at a certain price.
1:30:40It has to do with their taking care of the east of Canada, because they've been reporting cheap oil, should they be cut off.
1:30:48I'd separate the two problems.
1:30:50You can see him on that, because that's a different one.
1:30:54But then I think on this one, let's leave it over here.
1:30:57The only reason we are somewhat together is because obviously any sort of pipeline of this common character of this nature would have to be closely aligned to some sort of oil guarantees and oil policy of the North American continental nature.
1:31:17He talked about one of the things
1:31:19is that we've got 1,300,000 barrels of oil flowing down this pipeline now across the border, a lot of it going back into Canada, and then we've got 500,000 barrels today going across here, and Montreal from Maine.
1:31:34So I think, let me suggest this, because if George has the time, I don't know whether he can get away with trying to get a welder or a farm crew and all the other things, but we can...
1:31:47But if George hasn't the time, I'd like for him to, because of his years later on the oil import thing, if you could invite him, Pete, to sit down on your thing, would you do that?
1:32:00I think you should.
1:32:01You have George sitting on here.
1:32:03Would you do that, George?
1:32:05Just what you're getting at, but I mean, just because you were, and it might be well for somebody to go back and read that report.
1:32:12You discussed all this, didn't you?
1:32:14We went through it very early, this thing.
1:32:17The picture that Roger brought up, we just really considered it.
1:32:22The idea of the pipeline to Canada, I mean, I said I had to raise the other thing, because the devil's at it, and I figured Roger would raise it himself, and he didn't.
1:32:31I think it does too, but don't get the idea, sir, at this point in time that I'm hard down on doing this.
1:32:42Unless it was really favorably politically, I'm too much of a political animal.
1:32:47I'll make a short-term game against the risk in this unless I really know more about it than we do.
1:32:52Oh, sure, well, I'd say let's find out.
1:32:55Yes, but if they're going to pony up the money, and if we're going to get some other scores and the rest of the thing, that's fine.
1:33:02But we've got to find out very damn fast what they're going to do.
1:33:07I don't think they'll tell you.
1:33:09And very quietly.
1:33:10Yeah, you have to get hit over the head like crazy.
1:33:13I don't know if there's any way to do it.
1:33:15Well, our problem is,
1:33:18Problem there is this, that he's talking already.
1:33:24I suppose, Roger, I have a problem that somebody's going to go out and say that the administration is discussing with the Canadians an alternate to the Alaska pipeline.
1:33:31Well, that's exactly what I would say, too.
1:33:33I think we might as well get it out on the table.
1:33:35We've met with them.
1:33:35It's very complicated.
1:33:37We're open to any propositions.
1:33:39I've said that all along.
1:33:42We're going to see what they have in mind.
1:33:45Well, it's already on the table.
1:33:47Now, let's talk about that.
1:33:48If you would just simply put it out there.
1:33:51I think it has to.
1:33:53He's putting it out.
1:33:53He's going to have a press conference as soon as he leaves the building.
1:33:56Now, you know you can start right off with that, but I would like to...
1:34:01No, we just say that if Canadians are coming up with a proposition, we want to see it.
1:34:07And then they'll say, what are we going to do?
1:34:11We're enjoying it already, doing this here.
1:34:13We've got a long court battle ahead of us.
1:34:16We have to have an option.
1:34:18Why do you say you're looking at the options?
1:34:22That's what I said.
1:34:22I said in Fairbanks at a news conference, and in Athens at a news conference, at the time we went up there to see the emperor.
1:34:29I said that it was in the last act that I was going to continually review all the alternatives.
1:34:34Let me suggest this in a minute.
1:34:36Other people haven't got a better idea.
1:34:39I think, first of all, it's out already.
1:34:41I think you all agree he's coming down to see Pete and you.
1:34:45Right.
1:34:45The second point is, since that's the case, I wouldn't be a bit, I don't even, I don't think John can keep it quiet, because he's obviously a yanker, and I'm really not interested.
1:34:59But what I think you could say, but what I think, simply say, yes, we're meeting with the Canadians, and we're discussing a number of problems having to do with oil, I mean, our problems,
1:35:09But, as far as this pipeline is concerned, we obviously are only discussing at the preliminary stage the options that might be open to us, having in mind the problems that might arise in the event that the environmental problems kill the other one.
1:35:25And that's something we have to do.
1:35:28Even beyond that, as I understand it in your environmental statement, you have to show that you've considered all the other options very carefully.
1:35:36Well, this is what, brushing one of them off, that's very good.
1:35:41You're going to say that your environmental law, like my choir, you say that my problem is on that one, you already said it, I've already said it, and now you've already decided for the elastic pipeline.
1:35:52We know we have made no decisions, sir, but we have said it.
1:35:56No, I don't know that you announced it.
1:35:57No, I don't think you said it.
1:36:00No, we haven't.
1:36:01But what about George's point, though, is that your environmental statement is supposed to say that you've considered all other options?
1:36:06We've considered them all with the knowledge we had.
1:36:08And then you decided against going all through Canada, right?
1:36:13We decided that we didn't have the authority to go any further with one.
1:36:17Well, then you can say that under the great environmentalists that you are, that you've looked at all this problem.
1:36:25Our venture, Mr. Fred,
1:36:29I think you can get off that wicker by doing what George has said.
1:36:36The law requires you to explore this, and now we have a new option to open it up, and you've got to explore it.
1:36:46But my problem is with present court cases before us, if I do that...
1:36:51The judge is going to say, well, I just read in the paper that Morton is talking to McDonald about an alternate route through Canada.
1:36:58Therefore, the NEPA Act has not been fully complied with, and then we will recycle the whole thing.
1:37:05Then this becomes a draft statement, and we have to recycle the whole thing again, go out to comments and more public hearing.
1:37:11But what is the judge going to say, Rod, if the Canadian fellow goes back to Canada?
1:37:17Oh, that's it.
1:37:18Well, gee, I tried to raise it with those characters down there in the United States, and they wouldn't give me the time of day.
1:37:23Oh, I know, but that's the kind of crap we have around.
1:37:25It's just as if you've got to brace this fella to be a little quiet about this thing and make a try-out.
1:37:33Oh, then he thinks that he's got the edge on it.
1:37:35Well, what do you mean, John?
1:37:39Well, I'm with Raj that if you open the question...
1:37:44If he says he's exploring that route, by implication, that means he doesn't have enough facts to make a decision, therefore he shouldn't be before the judge yet.
1:37:52And you're trapped, and there's something against you right off the bat.
1:37:54It's a morass, it really is.
1:37:56I think you've got to brace the guy to secrecy, you've got to find out, try to do that, find out quickly if they've got the money to play the game, and if they don't, if they've got a good public out, not to go that way.
1:38:09If they do have the money, I think you should go that way.
1:38:11That's it.
1:38:13There's another problem here, Mr. President, is that the oil has cost the oil companies something over a billion dollars a day.
1:38:21They've won the pipe.
1:38:22They're building the ship.
1:38:24They're under contract.
1:38:26They want to bring the oil down here.
1:38:30All they're saying is, please, U.S. government, give us our permit.
1:38:37It's their dough and their oil and their ships, and we're kind of, we've got to get them in bed with us.
1:38:44They have set the date that they don't want to do this other thing.
1:38:46Yeah, they'll have to do it, maybe because of the amount of money involved, and Roger's suggesting that be taken care of by the Canadian government and the U.S. government.
1:38:54And the delay, if you could...
1:38:56Overcome both those hurdles, they might very well play, but some are going to have to be taken into account.
1:39:03Oh, I know it, I know it.
1:39:06Their lawyers, though, are fearful of this case.
1:39:09The Alaska lawyer came in to see me, and I think what you have to do, you've got some outstanding men, of course, the head of Atlantic Richfield, and
1:39:23I just, they got the biggest investment, and I think you just get them in, and have Frank talk about the damn thing.
1:39:33Right, but early, early.
1:39:34Don't let him read it in the paper.
1:39:36He should be brought in very early, and say, look, we're just looking at options here.
1:39:41But in any event, whatever the option is that you've decided,
1:39:44The oil companies will be compensated for their, whatever they've done.
1:39:48You've got to do that.
1:39:50You can't let those oil companies lose their shirt for what they've already put up.
1:39:53Well, they're not going to lose their shirt, because remember that they're big investments right here.
1:39:59The pipe's going to be used.
1:40:01There's nothing in here that can't be moved.
1:40:03We're talking about...
1:40:08We're talking about a cost here of a total of about 5 billion.
1:40:15A little less, 4.27.
1:40:18We're talking about one point.
1:40:19The other thing is it's cheaper for them to do this.
1:40:22The estimate today, sir, lets the tankers to go to here at 2.9 billion dollars.
1:40:27With the tankers, the capital investment, I know the tankers, as Peter said, don't get on the oil company balance sheet, but the total asset investment
1:40:36I think we're all set to start to talk to them in the hand.
1:41:04We have to do whatever is necessary.
1:41:07But let's have as little adverse thought as we can.
1:41:11Let's say this guy may not be shooting blanks.
1:41:15I don't think he'd be rushing down here to talk about that.
1:41:30Well, these other things you want to talk to, the thing he said, talking about his thing, and then I think what you ought to do, though, is to be sure that you don't pick us off, and you should all get together in a room and talk about the other thing.
1:41:42Don't you think so?
1:41:44Let's talk about this thing, because this is big.
1:41:48For them, well, actually, it's big for us.
1:41:52It's what Canada ought to be doing.
1:41:53It's a hell of a thing for them.
1:41:55They need some investment of their own.
1:41:58I think so.
1:42:00We're going to need the oil.
1:42:02It looks like it's about 12% of our oil base requirement of 1981, 2, 3, and 4.
1:42:11Well, I have to talk to the advertising company.
1:42:14I'll get the map out of your way here.
1:42:16They'll carry it out for you.
1:42:17Get on your big horse now.
1:42:20All right.
1:42:21Out there in Gallup.
1:42:22Over those wildlife trails.
1:42:24That's where you want to keep all those wildlife.
1:42:27You want to drive the horse.
1:42:30I'll show you.
1:42:31All right.
1:42:31Good luck with that.
1:42:35God, you need to be sold.
1:42:36I know you're dry all the time.
1:42:38Ha, ha, ha.
1:42:41I hope you're right.
1:42:42Good luck.

Nixon, Morton & Haig on Trans-Alaska Pipeline and Energy Policy

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Also recorded on March 27, 1972

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