Economy

Calls grow to allow U.S. oil exports to foreign nations

Congress is debating a repeal of the U.S. ban on exporting oil. In photo, the oil drilling rig Polar Pioneer is towed toward a dock May 14, 2015, in Elliott Bay in Seattle, Wash.
Congress is debating a repeal of the U.S. ban on exporting oil. In photo, the oil drilling rig Polar Pioneer is towed toward a dock May 14, 2015, in Elliott Bay in Seattle, Wash. AP

Momentum is growing to lift the 40-year ban on exporting U.S. oil to foreign nations, with a federal report concluding that doing so wouldn’t raise gasoline prices. Congress could vote on proposals when it returns from its summer vacation after Labor Day.

Rep. Joe Barton, R-Texas, said he has “green lights” from the House Republican leadership, and is confident the House will pass a bill on ending the ban this fall.

“It is up to this Congress to examine the issue and move towards a better policy that reflects the reality of America today, not the America of 1975,” Barton said in an email.

Republican presidential candidates are also seizing on the issue, with Sen. Marco Rubio, R-Fla, declaring that ending the ban is one of the first things he’d do if elected president. There’s opposition among Senate Democrats, but also a growing willingness among some to consider the idea that seemed a political impossibility just a few years ago.

The oil export ban was put in place in the wake of the 1970s Arab oil embargo, ostensibly to protect Americans from suffering gasoline shortages and price spikes. But oil companies and many energy economists argue it’s an outdated policy in an era of enormous American oil and natural gas production and that lifting the ban would encourage more drilling.

All signs pointing to an eventual go for oil exports.

Jamie Webster, senior director at the global energy consulting firm IHS.

The Obama administration has taken small steps, including an announcement last month that it would start letting companies send lighter U.S. oil to Mexico where it’s good for aging refineries there, and get heavy Mexican oil in return.

But Obama isn’t advocating an end to the ban. White House spokesman Josh Earnest skirted the issue by calling it a matter for the Commerce Department.

“What I will just say in general is that any consideration of this policy would certainly include a consideration of its impact on energy prices in the United States,” Earnest said told reporters.

A new report from the federal Energy Information Administration found minimal impact on energy prices.

“Petroleum product prices in the United States, including gasoline prices, would be either unchanged or slightly reduced by the removal of current restrictions on crude oil exports,” the report found.

House Speaker John Boehner, R-Ohio, is joining the call for an end to the ban, betting that it will lead to more drilling as American oil is sent to overseas markets. Barton’s bill to end the export ban has attracted 113 co-sponsors, about a dozen of them Democrats.

There’s also growing interest in the Senate. The Senate Energy and Natural Resources Committee approved a measure to lift the ban at the urging of chairwoman Lisa Murkowski, R-Alaska. Senate Minority Leader Harry Reid, D-Nevada, has signaled a willingness to make a deal on ending the ban.

“All signs pointing to an eventual go for oil exports,” tweeted Jamie Webster, senior director at the global energy consulting firm IHS.

Energy analyst Kevin Book is skeptical, though, that such a major change to American energy policy can make it through Congress before the next president takes office.

“We continue to give only 15 percent odds,” said Book, managing director of ClearView Energy Partners in Washington.

Environmental groups fear lifting the export ban would lead to more areas opened to drilling and increase the burning of fossil fuels linked to climate change.

Some refiners in the Midwest and Northeast argue the global competition would force them to start paying more for American shale oil, hurting their industry. The U.S. still imports about a fourth of its petroleum.

“Lifting the crude oil export ban will threaten our national security and makes us more dependent on OPEC and unstable foreign regions,” said Sen. Ed Markey, D-Mass. “And it could lead to higher energy prices for American consumers.”

Some Democrats, though, have started openly discussing the idea. Sen. Michael Bennet, D-Colo., said he supports repealing the export ban as part of a broader energy package. The question is how much Republicans are willing to negotiate with Democrats such as Bennet to get a deal on lifting the ban.

Bennet “believes it would have to be part of a more comprehensive plan that includes steps to address climate change and give the country and the world a more sustainable energy future,” said his spokesman, Adam Bozzi.

Sean Cockerham: 202-383-6016, @seancockerham

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