Sen. Lisa Murkowski (R-AK), the top Republican on the Senate Energy Committee, called for an end to restrictions on crude oil and condensate exports on Tuesday. She urged President Obama to issue executive orders to change the nation's energy export policies.
During a speech at the Brookings Institution in Washington, DC, Murkowski pulled back on a call for comprehensive legislation to reform the nation's laws governing the energy industry, but she issued a 22-page white paper with her recommendations.
"The regulatory edifice that governs the export of American-made energy is antiquated and at times, I would suggest, even absurd," Murkowski said. "And while there is no perfection under the sun, we surely can do better than this."
Murkowski said the Obama administration has the statutory authority to not only lift the ban on crude oil and condensate exports, but it also has the power to implement most of the ideas that would be contained in a comprehensive energy bill.
"The current system is inefficient and may lead to supply disruptions that we can ill afford," Murkowski said. "Lifting the ban will send a strong signal to the energy markets that we are serious about our emerging role as a major hydrocarbon producer."
She added that one possible supply disruption, if left unchecked, could arise from the domestic production of light tight oil (LTO) from the Bakken and Eagle Ford shales. According to Murkowski, a provision in federal law gives the Department of Commerce the power to approve applications for LTO exports on the grounds that LTO cannot be reasonably marketed in the United States.
"There will come a time when we will have an unsustainable glut of this light crude. It may be next year or sooner than that. The free market works wonders, but it can't work magic."
Murkowski said she was "willing to introduce small, targeted bills to move the ball forward as needed" to reform the nation's energy laws, but lifting the crude oil and condensate export bans was paramount. "We should think carefully about the conditions in which those bans were put into effect and consider whether or not they still serve the public interest -- if they ever did."
During a Q&A session, Murkowski conceded that it would be more difficult to pass legislation through Congress because it is beginning to enter the campaign season.
"While I have suggested in my comments that I am prepared to introduce legislation if necessary, I am not certain that it is absolutely necessary," she said. "I do believe that the authority currently resides with the executive branch, [and] that they can make these actions in the national best interest. But it takes initiative by the executive to do just that.
"Maybe we approach it on two fronts. Maybe we advance legislation that will allow for a modernization, while encouraging the [Obama] administration to act on its own with the authority that they currently have."
Murkowski said Commerce was doing a "commendable job" regulating coal, renewables, natural gas liquids (NGL) and petroleum products, but she questioned whether the State Department was the appropriate agency to have authority over cross-border oil pipelines, such as Keystone XL. "The course of its review of the Keystone XL has been counterproductive, and frankly I think it has unduly strained our relationship with Canada," she said.
The Republican also accused the Department of Energy (DOE) of "slow-walking" licenses to export liquefied natural gas (LNG), an issue that has been in her crosshairs before (see Daily GPI, Aug. 8, 2013; Shale Daily, June 19, 2013).
"[DOE] Secretary [Ernest] Moniz appears to have quickened the pace of approvals, which I appreciate, but the queue is still quite full," Murkowski said. "Licenses still take far too long to review, especially when, as appropriate, the projects still must go through a rigorous safety review at the [Federal Energy Regulatory Commission]."
Also during the Q&A, Murkowski said she thought there was merit to enacting legislation that would require a "reasonable timeframe" for energy projects to receive regulatory approval.
"It's one of those areas that we can look to for a possible solution to the delay, the impasse, the lack of certainty that you have within an industry," Murkowski said. "Reasonable timelines are one area that we can and should be looking to.
"You have to recognize that there may be situations where you need to extend it out, that you have to do a bypass. But right now, for instance within the approval process for LNG export licenses, there's no certainty whatsoever out there."