US House approves bill to repeal crude-oil export ban

The US House approved, by a 261-159 vote, a bill to repeal a 40-year ban on exporting domestically produced crude oil. Balloting ran largely along party lines as 235 Republicans supported HR 702 and 153 Democrats opposed it. The vote came days after the White House announced that the measure would be vetoed if it reached US President Barack Obama’s desk (OGJ Online, Oct. 8, 2015).

“America’s energy boom has sparked a jobs boom, but continued job growth is now in jeopardy without access to global markets,” said Rep. Joe Barton (R-Tex.), who introduced the bill on Feb. 4, after the Oct. 9 vote’s results were announced. “HR 702 presents a rare opportunity to help the economy at home, enhance our influence abroad, and strengthen our national defense, and all at no added cost to the American people.”

Opponents attacked the measure during debate as another giveaway to the oil and gas industry. “We’ve heard arguments all morning to give Big Oil—the most profitable industry in the country—another multibillion-dollar break,” said Rep. Jared Huffman (D-Calif.). “As presently written, this bill says no export restrictions could be imposed on US crude oil in the future. That’s simply breath-taking.”

Rep. Frank Pallone Jr. (D-NJ), the Energy and Commerce Committee’s ranking minority member who led opposition during debate on the bill, said HR 702 does not consider impacts on consumers, especially related to crude oil and gasoline prices; on domestic refining and associated jobs; and on the environment and climate from increased domestic production which would result.

A few House Democrats backed the measure. “This obviously is a work in progress,” said Rep. Jim Costa (Calif.). “There are several issues that still need to be addressed, particularly dealing with small US refiners, several of which I represent. But this bipartisan bill is the best vehicle we have to begin addressing a 40-year-old policy which has become obsolete.”

Other supporters said the bill was long overdue. “We now have opportunities we couldn’t dream of a generation ago,” said Rep. Luke Messer (R-Ind.). “The US is producing more oil than ever before, and we could become net exporters of energy.”

Bill’s passage applauded

Several trade associations, as well as non-industry business groups, applauded HR 702’s passage in the House. “Today’s vote starts us down the path to a new era of energy security, saving consumers billions of dollars and creating jobs across the country,” American Petroleum Institute Pres. Jack N. Gerard said.

IPAA Pres. Barry Russell observed, “Some critics think exports would only benefit oil companies. This is simply not true. We must look at the broader economic and geopolitical picture.”

The Western Energy Alliance in Denver chided the White House for threatening to veto the bill as it cheered the measure’s passage in the House. “The bipartisan majority [there] understands that overturning the ban will result in $265 billion in overall savings for consumers, which translates into $391 in annual household savings,” said Kathleen Sgamma, WEA vice-president, public and government affairs. “That’s good news for nearly everyone, except a president who is using nearly every regulatory lever available to restrain US oil production.”

International Association of Drilling Contractors Pres. Stephen Colville said, “Today’s vote is a win for the US economy, particularly due to the huge implications for the creation of new jobs. From the drilling contractor community’s perspective, this is an enormous benefit to our members.”

Colville said recent studies show that lifting the ban would result in an average of 124,000 new jobs in the crude-oil supply chain, contributing to 394,000 jobs in the greater economy through 2030. “Particularly during a time of market uncertainty in the oil and gas industry, these job numbers are big, and meaningful,” he said.

‘Critical energy policy’

The Texas Independent Producers and Royalty Owners Association in Austin also approved of the House’s action. “Lifting the oil export ban will create an estimated 800,000 American jobs, reduce the deficit by more than $1.4 billion over 10 years, and drive further growth and security for our country, while offering supply diversity and support to our allies abroad,” TIPRO Pres. Ed Longanecker said.

US Chamber of Commerce Pres. Thomas J. Donohue said, “The ban on crude oil exports is a relic of the past that robs Americans of good jobs across the nation and handicaps our economy. It’s time to take the shackles off of the American economy and our allies. Today’s bipartisan vote in the House demonstrates continued momentum to lift the ban, and we urge the Senate to follow their lead.”

Linda Dempsey, National Association of Manufacturers vice-president of international economic affairs, said the ban is at odds with US export goals, policies, and international obligations. “It limits our economic growth and puts up a roadblock to increasing US exports,” she said.

Dempsey said, “Manufacturers in the US need full and free access to the global marketplace, which is why it is critically important that our leaders are taking action. The Senate must now act to remove this outdated policy that is at odds with our international commitments and needs in a global economy.”

Two senators who have introduced their own bills to repeal the crude oil export ban also welcomed the House’s passage of HR 702. “It sends a strong signal that Congress will lead where the administration has failed,” said Energy and Natural Resources Committee Chair Lisa Murkowski (R-Alas.). “It is unfortunate that the White House wants to ignore broad bipartisan support for increasing exports of American energy to our friends and allies.”

Sen. Heidi Heitkamp (D-ND), whose measure was referred to the Senate floor by the Banking, Housing, and Urban Affairs Committee on Oct. 1, said that she and Murkowski have discussed repealing the ban with other federal lawmakers on that side of the Capitol for the past year. “Bipartisan support will help move our legislation forward,” she said. “It’s encouraging that others—especially Democratic senators—have recently expressed an interest and a willingness to craft a deal to address this outdated policy.”

Contact Nick Snow at [email protected].