Economy

House votes to end 40-year ban on sending American oil overseas

The House of Representatives voted Friday to lift the ban on U.S. exports of crude oil. The proposal still must be approved by the Senate. President Obama has vowed to veto it.
The House of Representatives voted Friday to lift the ban on U.S. exports of crude oil. The proposal still must be approved by the Senate. President Obama has vowed to veto it. AP

The House of Representatives voted Friday to end the 40-year-old ban on exporting American oil to foreign nations, launching a showdown with the Senate and the president in the nation’s latest battle over energy and climate change.

The ban was a response to the 1970s Arab oil embargo, ostensibly to protect Americans from gasoline shortages and price spikes. The oil industry is lobbying furiously to end the ban, calling it outdated in an era of enormous U.S. oil production and saying that exports would spur more drilling.

The industry won a major victory when a bill by Rep. Joe Barton, R-Texas, to end the ban passed 261-159, with 26 Democrats joining 235 Republicans in favor. Barton argued the bill would lead to the creation of jobs nationwide.

“Those are real people, that’s not Big Oil,” Barton said.

President Barack Obama is threatening to veto the bill, though, and there weren’t enough supportive votes in the House to override a presidential veto.

“Legislation to remove crude export restrictions is not needed at this time. Rather, Congress should be focusing its efforts on supporting our transition to a low-carbon economy,” the White House said. “It could do this through a variety of measures, including ending the billions of dollars a year in federal subsidies provided to oil companies and instead investing in wind, solar, energy efficiency, and other clean technologies to meet America’s energy needs.”

If the president were presented with H.R. 702, his senior advisers would recommend that he veto the bill.

White House statement

While the bill might not make it further than the House at this point, Friday’s vote still marks a major milestone. Just a few years ago, the idea of ending the export ban was politically unthinkable. But a series of studies saying that ending the ban wouldn’t raise gasoline prices have eased the fears of lawmakers worried that voters would punish them. Oil CEOs now believe that it is just a matter of time before the ban is gone.

For now the bill faces opposition from Democrats who are emboldened by Obama’s veto threat. Kevin Book, managing director of the energy research firm ClearView Energy Partners, gives only a 15 percent chance for the measure to make it through Congress before Obama leaves office “because of ongoing White House opposition and limited incentives for Senate Democrats to cooperate.”

Democrats are under political pressure from a coalition of refiners who benefit from keeping the crude oil in America. Some refiners in the Midwest and the Northeast argue that the global competition would force them to start paying more for American shale oil, hurting their industry.

Environmental groups fear ending the ban would lead to more areas being opened to drilling and increased burning of the fossil fuels that cause climate change.

“Lifting the oil export ban is a giveaway to the oil industry that would undermine the progress our country is making to use more clean energy and fight climate change,” said Franz Matzner, a campaigner for the Natural Resources Defense Council.

Friday’s vote comes as America’s energy boom is faltering as a result of the crash in oil prices. Lifting the ban would help oil companies get a higher price on the global market. The energy industry has made the issue its top priority on Capitol Hill, where it’s overshadowing debate over the Keystone XL pipeline.

“Today’s vote shows that bipartisan momentum is stronger than ever,” said Jack Gerard, president of the American Petroleum Institute, an industry lobbying group.

Supporters of the ban argue the policy still plays an important role in protecting American energy security, given that the U.S. still imports nearly half its crude oil.

“We want to export U.S. oil to China and import from countries that aren’t necessarily friendly to us,” said Rep. Mike Doyle, D-Pa. “Why would we do this?”

Advocates of lifting the ban suggested U.S. oil exports could benefit the nation’s allies and boost the nation’s standing as an energy superpower.

“As opposed to working to increase American energy security, President Obama would rather lift sanctions on Iran and allow them to sell their oil on the global market,” said Rep. Bill Flores, R-Texas. “The president is putting the interests of Iranian terrorists above that of hardworking Americans.”

Sean Cockerham: 202-383-6016, @seancockerham

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