The bill is expected to easily pass the Republican-led House, however it faces a much stronger challenge after that. President Barack Obama has refused to lend his support to the bill, stating that oil-export decisions are made by the executive-controlled Department of Commerce, and that the Department can decide on its own to lift the ban. Still, the president has loosened restrictions in recent months, allowing Shell to drill in a new area off of the Alaska coast and allowing additional oil trade to Mexico. The bill may not reach Obama’s desk anyway, as key Senate Democrats are poised to prevent it from being brought to a vote in that chamber.
The longstanding ban of U.S. crude-oil exports to most countries in the world may be coming to an end soon if the House of Representatives’ Energy and Commerce Committee ends up having its way. The committee voted by a 31-19 vote on Thursday to approve House Bill 702, which calls for a repeal of Section 103 of the Energy Policy and Conservation Act of 1975, a provision that gives the president discretion to restrict exports of oil, natural gas, and other petrochemical products. The 1975 ban was a response to the 1973 OPEC Arab oil shock that led to recession in the U.S. throughout much of the 1970s. Although rising oil prices became a persistent consumer problem during the most of the 2000s, things have changed drastically over the past decade. Domestic oil production has risen 80 percent since 2007, largely due to the proliferation of hydraulic fracturing methods, or fracking, especially in the Dakotas. The bill’s sponsor, Texas Republican Joe Barton emphasized the changing dynamics, saying “If we don’t lift the restrictions on crude oil exports, we cannot utilize our strategic advantage in oil production.”
Although some Democrats in the House have stated that they could support the bill if some provisions of the repeal could be negotiated, most found the final version to be insufficient. Three Democrats aligned with the Republican-dominated committee in passing the measure. The committee’s top Democrat, New Jersey’s Frank Pallone said about the unfulfilled concerns, “H.R. 702 is a blunt object which broadly undermines 40 years of protections for national security, our economy, consumers and the environment. This bill looks backwards, rather than even considering the possibility of new energy solutions for our nation’s future.”As a minor consolation for Democrats, one of the three who voted for the bill, Gene Green of Texas, was able to pass an amendment that gives the president the authority to stop exports during times of national emergency, including severe supply disruptions.
Still, environmental groups like Friends of the Earth have remained staunchly opposed to loosening the restrictions. Spokeswoman Marcie Keever said about the bill, “The crude export ban is crucial to keeping dirty, dangerous, climate-disrupting fossil fuels in the ground where they belong. It’s time to increase incentives for a cleaner future with a fossil fuel-free economy, instead of doubling down on a destructive, outdated system.” Among the lobbyists supporting the bill, the American Petroleum Institute’s executive vice-president for government affairs Louis Finkel argued that lifting the ban will give the U.S. leverage for any impending deal to lift sanctions against Iran. Finkel argued “This legislation will reverse a decades-old policy and strengthen America’s edge against competitors like Iran,” while adding, “It makes no sense for the U.S. to restrict its own exports while the administration works to let Iran export its crude.”
The bill is expected to easily pass the Republican-led House, however it faces a much stronger challenge after that. President Barack Obama has refused to lend his support to the bill, stating that oil-export decisions are made by the executive-controlled Department of Commerce, and that the Department can decide on its own to lift the ban. Still, the president has loosened restrictions in recent months, allowing Shell to drill in a new area off of the Alaska coast and allowing additional oil trade to Mexico. The bill may not reach Obama’s desk anyway, as key Senate Democrats are poised to prevent it from being brought to a vote in that chamber. It remains to be seen if, and what types of concessions would be needed for Senate passage, or if there is any room for negotiation between the president and Congress. Majority Leader Kevin McCarthy (R-CA) said a full House vote on the measure will take place within the next few weeks.
Sources:
Natural Gas Intelligence – Charlie Passut
Reuters – Timothy Gardner
The Hill – Timothy Cama
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