Foreign Relations of the United States, 1969–1976, Volume XXXVI, Energy Crisis, 1969–1974

120. Memorandum From the Under Secretary of the Interior (Whitaker) to President Nixon¹

Washington, March 24, 1972.

• SUBJECT
  • Meeting with Secretary Rogers Morton, General Alexander Haig, George Shultz,
  • John Whitaker, and Peter Flanigan
  • March 27, 1972 (30 minutes) 4:00 p.m.
  • The President’s Office

I. Purpose

(a) Review Secretary Morton’s suggestion that the Alaska Pipeline be routed through Canada rather than through Alaska (and then by a tanker shipment to the West Coast); (b) if a decision is reached to consider a Canadian route, then how should negotiations be conducted with the Canadians and the oil companies to assure top level consideration and strict secrecy by all parties.

II. Background

A. Interior has prepared an extensive Environmental Impact Statement² as required by the National Environmental Policy Act. Secretary Morton must deny or grant a permit to a consortium of oil companies (Alyeska) to build an Alaska Pipeline from Prudhoe Bay to Valdez, Alaska, and then ship the oil by tankers to the West Coast. Should Secretary Morton grant the permit, then protracted litigation will follow in the courts with various environmental groups. Interior and Justice rate our chances on winning in the D.C. District Court as good, but they believe they have a less than a 50–50 chance of winning the District Court of Appeals (the judges are very pro-environment). Both Interior and Justice feel the case will eventually go to the Supreme Court which would mean a year or more of litigation before the case is decided.

B. Secretary Morton will propose that we negotiate secretly with the Canadians and if they are interested, then with the oil companies. The aim would be to announce, when you are in Ottawa (April 13–15), an agreement for an international joint venture between the U.S., Canada and the oil companies for construction and operation of a “common carrier” pipeline system for transporting oil and gas from Alaska and the Canadian Arctic through Canada to Edmonton then on westward to Seattle and eventually, also from Edmonton, southeast to Chicago.

C. Canada, the U.S. and the oil companies would each put up one third of the capital and share equally in the revenues generated. The thrust of Morton’s argument is that: (1) the costs for the Alaska versus Canada route are comparable—a point that needs thorough checking with the oil companies; (2) we might not get the oil out of Alaska any quicker to help our national fuel shortage because of the protracted litigation, and we have no idea of the Canadian schedule if they decide to do business with us; (3) it will give you a strong international and environmental issue (nationally), but it will hurt you (jobs) in Alaska; (4) the Canadian route would be cheaper for the oil companies if the U.S. and Canadian Governments subsidized the project. More details of Secretary Morton’s proposal are attached at Tab A.³

D. John Ehrlichman, Peter Flanigan and John Whitaker have heard Secretary Morton’s proposal and feel it has enough merit so that you should be exposed to it first-hand. We lean toward opening discussions both with the Canadians and the oil companies. However, if there is a leak and the public learned we were actively thinking about the Canadian route and the negotiations fell through because of either Canada or the oil companies failure to close a deal, the environmentalists would have a strong argument in court that we were recognizing significant damage would occur to the environment if Secretary Morton grants a permit to bring the oil out via Alaska. Therefore, should you decide to authorize negotiations with the Canadians, absolute secrecy is necessary.

F. Donald MacDonald, the Canadian Minister of Energy, Mines and Resources (Secretary Morton’s counterpart), Jack Austin, Mac-Donald’s Deputy, and Dr. R. D. Howland, Chairman of the National Energy Board will see Peter Flanigan on Wednesday, March 28 and Secretary Morton on Friday, March 30.⁴ The Canadian press reports that a Canadian pipeline for Alaskan oil is on their agenda of discussion with Secretary Morton and Peter Flanigan. You do not need to make a decision to authorize Secretary Morton or Peter Flanigan to bring up this matter when they meet with the Canadians, but we do not readily see how we can learn more about the Canadian or oil company’s attitude unless we expose Secretary Morton’s proposal to them.

G. Your meeting with Secretary Morton obviously has no press plan nor would the meeting be shown on your published calendar.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 250, Agency Files, National Energy Office, Vol. I, March 1972–February 1973. Top Secret. Haig forwarded a copy of this memorandum to Kissinger on March 29. A handwritten note by Kissinger on Haig’s transmittal memorandum reads: “have serious doubts.”
2. On March 20, the Department of the Interior released a massive nine-volume, 25–pound Environmental Impact Study on a hot oil pipeline across Alaska. Three of the volumes concerned economic and national security aspects of the proposed pipeline routes. The study stressed the need for Alaskan oil on the U.S. West Coast and the need for domestic oil sources. (The New York Times, March 21, 1972, p. 1 and p. 40)
3. Attached but not printed at Tab A is “An Alternative to the Alaska Pipeline.”
4. No record of these meetings was found; however, in two March 28 letters to Rogers, who was to meet with Morton prior to his March 30 meeting with MacDonald, Armstrong recommended that it was “better for the United States to build the Alaska pipeline than to become dependent upon the Canadians.” He reasoned that the Alaska route was quicker, the balance-of-payments impact of the route through Canada would be heavy, the United States was already “sufficiently vulnerable to the Canadians” for energy supplies, and Canadian nationalism could be a problem. (National Archives, RG 59, Central Files 1970–73, PET 18–1 US)