The US House is likely to move quickly and approve legislation repealing a 40-year-old ban on exports of domestically produced crude oil, Reps. Joe Barton (R-Tex.) and Henry Cuellar (D-Tex.) said shortly before an Energy and Commerce Committee subcommittee began marking up their bill.
“This is a relic. We’re going to start the process to repeal it today,” said Barton, chairman emeritus of the full committee at a Sept. 10 breakfast hosted by LNG Allies an hour before the Energy and Power Subcommittee began working on HR 702, which he introduced on Feb. 4. The panel approved the bill by voice vote.
He said he expects HR 702 to go before the full committee the following week, where Democrats are likely to offer amendments. Once it’s approved, the measure likely will go into a conference with the US Senate, where Energy and Natural Resources Committee Chair Lisa Murkowski (R-Alas.) included a provision repealing the crude export ban in a broader energy reform bill she introduced (OGJ Online, July 24, 2015).
“My hope is to have it on the president’s desk sometime in December,” Barton said. “It would be a great Christmas present for the American people.”
Cuellar said HR 702 has bipartisan support, with the Blue Dog Coalition, a caucus of 15 fiscally conservative Democrats committed to US financial stability and national security which also supports reaching bipartisan solutions, endorsing it on Sept. 9.
Other House Democrats expressed concerns. Frank Pallone Jr. (NJ), the Energy and Commerce Committee’s ranking minority member, suggested that federal lawmakers should carefully consider possible impacts of removing the crude export ban. These include effects on crude and product prices, impacts on US refining capacity and jobs, and environmental and climate consequences, he said as the subcommittee’s markup got under way.
Asked if he thought the Obama administration supports repealing the crude export ban which was enacted as part of the 1975 Energy Policy Act, Cuellar said: “Just the fact that it’s been quiet about this is encouraging.” A White House official told him the administration is waiting to see if a bill moves through Congress, he added.
Possible production growth
“I don’t have any agreements with the administration, but every indication I’ve seen is that the president will sign it,” Barton said. “It would quickly lead to 1-1.5 million b/d of exports. If we had the right price signals, we could increase our production by 5 million b/d in the next 10 years. We’re the only country in the world that can do that.”
Action is necessary because plunging crude prices have led to US rigs being stacked, he said. “They’re in the yards, but they haven’t been dismantled yet. If prices improved, they could go back to work quickly.”
Asked if he thought concerns expressed by some domestic refiners that quickly ending the crude exports ban will harm their operations, Barton said they have benefited from an anomaly which gave them discounts of as much as $30/bbl. “That would go away once the export ban was removed, but they’d still do well,” he said.
He said he thought there might be some “tweaking” once the bills move into conference, but not significant problems. “We have the votes to move the bill in the House without changing a comma,” Barton said. “The Senate might be different, but I’m not ready to accept any export destination restrictions, for example.”
Cuellar said, “This is not a Democratic or Republican effort. The fact that [Senate Minority Leader Harry M. Reid (D-Nev.)] said he’s open to compromise is encouraging. We’re going to get this done.”
An American Petroleum Institute official applauded the Energy and Power Subcommittee’s Sept. 10 approval of HR 702. “As lawmakers consider a deal that would put Iran’s crude on the global market, this vote would put US producers on a level playing field,” said Louis Finkel, API executive vice-president for government affairs. “It’s an important step forward, and we urge House and Senate leaders to continue to make this issue a top priority in the days ahead.”
Contact Nick Snow at email@example.com.