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1534754
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1975/09/02 - President and Governor Hammond
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1534754
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1975/09/02 - President and Governor Hammond
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James M. Cannon Files (Ford Administration)
James Cannon's Meetings Files
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Energy policy
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1975
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1975-09-01
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The original documents are located in Box 50, folder "1975/09/02 - President and Governor
Hammond" of the James M. Cannon Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 50 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
MEETING WITH THE PRESIDENT AND
GOVERNOR HAMMOND
Tuesday, September 2, 1975
5:00 p.m.
Oval Office
AVRUM GROSS, Atty loon
Guiy MARTIN,
Comm NAT
LIBRARY GERALD ? FORD
THE WHITE HOUSE
WASHINGTON
August 30, 1975
MEETING WITH GOVERNOR HAMMOND
(Alaska - R)
Tuesday, September 2, 1975
5: 00 - 5: 30 (one-half hour)
Oval Office
From: Jim Cannor June
I. PURPOSE
The Governor wishes to discuss the orderly development of Alaska's
energy resources and the location of the pipeline which will transmit
natural gas from Prudhoe Bay to the lower 48 states.
II. BACKGROUND, PARTICIPANTS AND PRESS PLAN
A. Background
Alaska (Gas) Pipeline
A major decision, which you probably will ultimately have to make,
is how to transmit the estimated 26 trillion cubic feet of natural gas
which is known to exist in Alaska to the lower 48 states. There are
two major alternatives under consideration:
Arctic gas - This is a trans-Canada route which would bring the
Prudhoe Bay gas to the United States and Canadian gas to the
western part of Canada.
El Paso - The so-called "all-American" route would involve a
second pipeline parallel to the existing oil pipeline across Alaska
to a point near Valdez, where it would be liquefied and transported
by ship to the West Coast at which point it would be regasified and
sent via existing pipelines, (strongly favored by Governor Hammond)
Outer Continental Shelf
The Interior Department has scheduled lease sales for OCS drilling in
the Gulf of Alaska, for late December or early January. Governor
2
Hammond has requested a delay for environmental reasons.
Oil Pipeline
Also the question of the completion of the trans-Alaska pipeline on
schedule could arise. The Department of Interior is currently evalu-
ating this situation and a report is expected in the near future. See
Tab A.
B. Participants
Governor Hammond, Jim Cannon, Frank Zarb and Mike Duval.
C. Press Plan
To be announced.
III. TALKING POINTS
1. Location of Gas Pipeline:
Note:
This issue raises very serious energy, diplomatic, and
political problems. Alot more staff work is necessary
before the issue is ready for your consideration. It may be
advisable to defer any final decision by you until after
the election. In any event, I recommend you avoid any
commitments to Governor Hammond on the substance and
timing of this matter.
No decision has yet been made within the Administration on which
route should be selected or whether we should seek legislation to
override existing statutes in order to speed up construction of this
pipeline.
Of course, legislation was ultimately required for the oil pipeline
across Alaska and it could also be required in this case. The Canadians
are considering the Arctic Gas proposal and their own exclusive Cana-
dian gas pipeline called the "Maple Leaf Proposal. II
The FEA and the Interior Department are working on a detailed analysis
which will be ready in the late fall or early winter, and I have asked
Frank Zarb to join us today SO that he might hear some of your views.
3
Because this matter is currently before an independent regulatory
agency, the Federal Power Commission, we have to be sensitive to
the integrity of their proceedings and avoid any attempts to influence
that proceeding. Nevertheless, it is proper to discuss the gas pipeline
questions in the context of our overall national evergy policy, federal
lands policy, and our international relations questions.
2. OCS Drilling:
The Department of Interior feels we must go forward with the lease
sale in the Gulf as soon as possible and we need your help. A setback
here could result in the postponement of other lease sales (such as--
California and off the Atlantic Coast) The recoverable reserves in
the Alaska Gulf area scheduled for the December sale are: 2.8
billion barrels of oil and 9 trillion cubic feet of gas. This amounts to
550, 000 barrels of oil per day which could be up to one-third of all
the oil we expect from the entire Outer Continental Shelf area.
3. It is true that the Gulf of Alaska presents the toughest environmental
challenge of any OCS area. Nevertheless, experience derived from
drilling in the North Sea area suggests that this can be done in an
environmentally safe manner.
4. Completion Date of the Trans-Alaska Pipeline: I understand that you
have met with Kent Frizzell, Acting Secretary of the Interior, this
morning, and I am sure that he mentioned that he is currently looking
at whether or not the construction will be completed on schedule, and
we will keep you informed as this information develops.
THE PRESIDENT HAS SEEN
DEPARTMENT
United States Department of the Interior
OFFICE OF THE SECRETARY
March
WASHINGTON, D.C. 20240
Dear Mr. President:
Following your inquiry at a recent Cabinet meeting concerning the
status of the construction of the Trans-Alaska Pipeline System,
I have undertaken measures to ascertain whether the construction
will be completed on schedule. Mindful of the critical impact
RL
on our Nation's energy supplies of any delay in completion of the
Trans-Alaska Pipeline System, the Department of the Interior is
continuously monitoring the status of the project. Our review
focuses not only on the environmental aspects of construction,
but also the schedule of construction, and the diligence of the
owners in meeting or improving that schedule.
Right-of-way permits were granted to the applicants on January
23, 1974. Construction of the pipeline started in April 1974.
At that time, the initial through-put of oil was estimated to
occur in mid-1977. Since that estimate, circumstances have
occurred which might delay the scheduled completion of the pipe-
line. The original estimate of the total cost of the pipeline was
$4.5 million. The owners' estimate of the total cost is now $6.5
billion. Recently, the owners have terminated the services of
Bechtel Corporation, their principal construction manager, and
assumed the management role themselves. During the first six
months of calendar year 1975, progress was greatly hampered by
late deliveries of construction equipment, poor camp facilities,
and an inexperienced working force.
In order to assist the owners in expediting completion, the Depart-
ment last year sought and obtained priorities assistance under
the Defense Production Act. This assistance has been most
beneficial to construction progress.
i
GERALD
FORCED
CONSERVE
AMERICA'S
ENERGY
-2-
The owners still state that the mid-1977 completion date is
attainable. However, due to the unique construction methods
required in the Arctic, a delay of only a few months in one
of several components of the system may have a substantial
effect on the completion date of the project.
To assess the probability of such delays, and to undertake
measures to prevent them, I have invited the owners of the
I
pipeline to meet with me to informally discuss our concern
that there be no delays in the completion of the project.
This meeting has been tentatively scheduled for the last
I week of August.
I will keep you apprised of any changes which may occur in
the project's construction schedule.
Sincerely yours,
Kent Shigall
Secretary of the Interial
The President
The White House
Washington, D.C. 20500
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