Nelson vows to block Murkowski’s stand-alone crude oil bill

The US Senate Energy and Natural Resources Committee approved Chair Lisa Murkowski’s (R-Alas.) bill to end the ban on exporting US-produced oil. But Sen. Bill Nelson (D-Fla.) immediately said he would try to block it procedurally because of the measure’s provision expanding the number of coastal states sharing federal offshore oil and gas revenue.

“If any measure to repeal the current moratorium on offshore drilling in the eastern Gulf of Mexico comes before the full Senate for a vote, I will use all available procedural options to block it,” Nelson tersely said in a July 30 letter to Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Harry M. Reid (D-Nev.) following the committee’s 12-10 vote.

The provision is part of the second component of the bill Murkowski introduced a week earlier (OGJ Online, July 24, 2015) that primarily aims to end the 40-year-old US crude export ban. The component would expand federal oil and gas revenue sharing to Alaska, southern Mid-Atlantic coastal states, and more of the US Gulf Coast.

It also would remove a moratorium on oil and gas activity in the eastern Gulf of Mexico under a compromise in the 2006 Gulf of Mexico Energy Security Act, which established federal OCS revenue sharing for Alabama, Mississippi, Louisiana, and Texas, Nelson’s office said in a separate statement. “That moratorium is in effect until 2022,” it added.

It was not yet clear on July 31 how Murkowski and the committee’s majority staff intend to respond. Oil and gas trade associations and other groups applauded the committee’s passage of the senator’s Offshore Production and Energizing National Security (OPENS) Act in the meantime.

Fair share for states

“It’s ironic that the US would strike a deal to allow Iranian crude onto the global market while refusing to give the same opportunity to American producers,” American Petroleum Institute Executive Vice-Pres. Louis Finkel said on July 30. “Lifting the ban will put downward pressure on fuel costs, create jobs, and strengthen our position as a global energy superpower.”

The bill also would let more coastal regions benefit from offshore energy development, Finkel said. “Every state that hosts oil and natural gas development off its shores should get a fair share of the revenue collected by the federal government.”

Karen A. Harbert, president of the US Chamber of Commerce’s Institute for 21st Century Energy, said the vote marked a critical milestone in efforts to remove the crude export ban, and demonstrated critical bipartisan support is growing. “Chairman Murkowski is to be applauded for her continued leadership to ensure US energy policy reflects the realities of 2015, not the 1970s,” Harbert said.

George Baker, executive director at Producers for American Crude Exports, said the bill’s passage would help the US realize its potential as a global superpower and add to growing momentum in the Senate and House to remove the outdated crude export ban. An Atlantic Council report examining ways the US can use its abundant energy resources to increase its geopolitical influence made similar points (OGJ Online, July 30, 2015).

“The outdated ban on oil exports is locking the US out of world markets and hampering both the health of our domestic energy industry as well as America's economic growth,” National Ocean Industries Association Pres. Randall B. Luthi maintained. “Preventing American oil from being traded on international markets also means higher gasoline prices for US consumers.”

Bipartisan Policy Center Pres. Jason Grumet said, “While we continue to stress the importance of accelerating energy innovation, as well as addressing carbon emissions, the way to accomplish these goals is not through perpetuating market barriers. Lifting the export ban allows the US to take full advantage of its ongoing energy revolution and finally join the global crude market.”

Contact Nick Snow at nicks@pennwell.com.

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