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White House Opposes House Bill to Lift Crude Oil Export Ban

The White House is opposed to a bill moving through the House that would lift a ban on most domestically produced crude oil exports, arguing that the decision to lift the ban should be made by the Department of Commerce, not lawmakers.

"We've got a position on this, which is that this is a policy decision that is made over at the Commerce Department," White House press secretary Josh Earnest told reporters Tuesday. "And for that reason, we wouldn't support legislation like the one that's been put forward by Republicans."

Last Thursday, the House Subcommittee on Energy and Power voted to advance HR 702 to the full Energy and Commerce Committee (see Daily GPI, Sept. 10). The bill calls for repealing Section 103 of the Energy Policy and Conservation Act of 1975, enacted during the Carter administration, which gives the president the authority to restrict oil and natural gas exports, as well as coal, petroleum products and petrochemical feedstocks.

Earlier this month, analysts with the U.S. Energy Information Administration (EIA) concluded that removing restrictions on U.S. crude oil exports would not cause domestic prices for petroleum products, such as gasoline, to skyrocket (see Shale Daily, Sept. 2).

When asked about the EIA report, Earnest used it as an opportunity to level criticism at House Majority Leader Kevin McCarthy (R-CA), who appeared before the Greater Houston Partnership (GHP) on Tuesday and touted HR 702 there.

"It is pretty clear, once again, where Republicans in Congress and their political benefactors stand when it comes to their energy policy priorities," Earnest said, accusing Republicans of being "cozy" with the oil and gas industry. He also took a swipe at the GHP, deriding it as a group "largely funded by four or five of the biggest oil companies in the United States," presumably an attack on BP plc, Chevron Corp., ExxonMobil Corp. and Royal Dutch Shell plc, four of GHP's executive partners.

Republican lawmakers -- many of whom represent states with significant oil-producing shale plays such as the Bakken, Eagle Ford and Permian Basin -- strongly support HR 702.

In a note Wednesday, analysts with Tudor, Pickering, Holt & Co. (TPH) said they expect the House will vote to lift the ban in late September or early October. But the prospect for passage in the Senate was unclear; the "timing, desire and ability to pass [the bill] is very opaque.

"Presumably, if the White House supported lifting the export ban, then Commerce would have already done so...but some hope exists the White House won't block it," the TPH analysts said. "It's not a short putt, but there is more optimism [for passage] than a year ago. If enacted, there should be no impact on the Brent-West Texas Intermediate spread, so there is some benefit to lifting the ban now when it won't immediately impact oil prices."

Neal Kirby, spokesman for the Independent Petroleum Association of America, told NGI that legislation to lift the ban "was never immediately needed," and urged the White House to take action. He also touched on the pending nuclear deal with Iran.

"The Obama administration has all the authority it needs to allow oil exports right now," Kirby said Tuesday. "Failing to do so would be a major missed economic opportunity for both the American people and U.S. businesses. With Iranian producers soon being able to export its surplus oil on the world market, why can't we allow our own companies first and foremost to do the same with their American-made surplus of crude oil?"

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