White House not inclined to end crude oil export ban, official says

This article was updated Sept. 17.

The White House believes a decision on whether to end a 40-year-old ban on exports of US-produced crude oil should come from the US Department of Commerce instead of the Oval Office, White House Press Sec. Josh Earnest said.

“For that reason, we would not support legislation like the [bill] put forward by Republicans” in the US House of Representatives, Earnest said on Sept. 15. “So for an update on our position, if one is necessary, you can consult with [DOC],” he told reporters during the daily press briefing.

Leading House Republicans quickly responded. “If there was ever a time to lift the oil export ban, it’s now,” Majority Leader Kevin McCarthy (Calif.) posted on his blog the same day.

“This outdated policy from the 1970s was created in a time when people thought Peak Oil was just on the horizon and scarcity left Americans waiting in lines to get gasoline,” McCarthy said. “Now, America is the world’s leading producer of gas and oil, which has lifted up our economy and helped us largely break free from our dependence on foreign oil.”

House Energy and Commerce Committee Chairman Fred Upton (Mich.) also was critical. “I am disappointed the White House would voice opposition to lifting the crude oil ban when a good number of prominent studies have indicated that the price at the American pump would actually go down by lifting the ban,” he said. “Many are asking why the Iranians are now allowed to export crude and only the Americans are denied.”

The full committee met on Sept. 17 to mark up and vote on HR 702, which its Energy and Power Subcommittee approved by voice vote a week earlier. The committee passed the measure by 31 to 19 votes, with a single amendment from Rep. Gene Green (D-Tex.) that would grant the US president authority to halt exports when they are not in the national interest, or when they pose a risk to national or economic security.

Leadership opportunity

The American Petroleum Institute, meanwhile, urged the White House to reconsider the position articulated by Earnest on Sept. 15. “The administration has an opportunity to demonstrate leadership by opening the door to US exports, creating new jobs, helping American families, and strengthening America’s position as an energy superpower,” API Pres. Jack N. Gerard said. “Lawmakers are right to ask why US producers shouldn’t have the same access to global markets that the administration would give Iran.”

Margo Thorning, senior vice-president and chief economist at the American Council on Capital Formation, also expressed disappointment that the White House chose not to support the House bill. “The world has changed tremendously since the ban on crude oil exports was put in place over 40 years ago,” she said. “That is nowhere more evident than in the transformation of our nation’s energy landscape from one of scarcity to one of abundance.”

The Business Roundtable also endorsed the measure. “The time has come to end the 1970s-era ban on US oil exports,” said American Electric Power Co. Chief Executive Nicholas K. Akins, who chairs the association’s Committee on Energy and Environment. “The US is now the world’s No. 1 producer of liquid fuels. America’s business leaders believe that removing export restrictions will further enhance the US energy sector and strengthen America’s strategic position in the world.”

Earnest suggested, however, that McCarthy, who discussed the issue before the Greater Houston Partnership that same day, had “an opportunity to demonstrate some true political courage…and actually offer up something bold but also common sense” before an organization that is strongly supported by several major oil companies.

He called on the House’s No. 2 Republican “to end the billions in subsidies that oil and gas companies in the US already enjoy, and actually use that money to ensure the long-term success of our economy and the energy sector in this country by making important investments in things like wind energy and solar energy—investments that even some of those oil companies themselves have bragged about making.”

Contact Nick Snow at nicks@pennwell.com.

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