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House Panel Passes Bill to Lift Crude Oil Export Ban

A bill that would lift a ban on most domestically produced crude oil exports passed the House Energy and Commerce Committee by a 31-19 vote on Thursday. It is to be taken up for consideration by the full House of Representatives later this month.

HR 702 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 exports of coal, petroleum products and petrochemical feedstocks.

"The ban on exporting crude oil imposes an estimated $200-600 billion cost to the U.S. economy, discourages crude oil production, prevents the creation of jobs, and causes higher gasoline prices for U.S. consumers," Rep. Joe Barton (R-TX) said Thursday. "We need to use our abundant resources for the highest and best causes: creating jobs, encouraging innovation, supporting our allies and being a leading player in the world market."

The American Petroleum Institute (API) said Thursday that it welcomed the House panel's vote and urged lawmakers to bring HR 702 to the House and Senate floors as soon as possible.

"There's a growing bipartisan mandate in both the House and Senate to bring America's vast resources to the global market and harness America's potential as an energy superpower," said Louis Finkel, API executive vice president for government affairs. "This legislation will reverse a decades-old policy and strengthen America's edge against competitors like Iran.

"It makes no sense for the U.S. to restrict its own exports while the administration works to let Iran export its crude."

But environmental groups were outraged. Friends of the Earth spokeswoman Marcie Keever said repealing the ban would be "disastrous" and worsen climate change.

"The crude export ban is crucial to keeping dirty, dangerous, climate-disrupting fossil fuels in the ground where they belong," Keever said Thursday. "It's time to increase incentives for a cleaner future with a fossil fuel-free economy, instead of doubling down on a destructive, outdated system."

The White House is also opposed to HR 702. On Tuesday, Press Secretary Josh Earnest said the Obama administration believes the decision to lift the ban should be made by the Department of Commerce, not lawmakers (see Daily GPISept. 16). If the bill ever makes it through the Senate and reaches the president’s desk, he is expected to veto it.

Earlier this month, analysts with the U.S. Energy Information Administration 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 DailySept. 2).

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.

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