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When Conservatism Collides With America’s Oil Boom When Conservatism Collides With America’s Oil Boom

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When Conservatism Collides With America’s Oil Boom

Republicans and free-traders are conflicted about lifting the crude-oil export ban.

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(Mario Tama/Getty Images)

"I support free trade, but … "

When a Republican is about to say why he or she isn't gung ho about lifting the decades-old ban on crude-oil exports, you should hear some variation of that phrase. It's usually followed by these kinds of qualifiers:

 

" … America is still importing a lot of oil."

" … we should export more value-added products, like those refined from crude oil."

" … this issue is a lot more complicated than you're making it seem!"

 

It's politically tricky for a Republican, whose party by principle represents free markets, free trade, and small government, to oppose lifting a federally imposed ban on exporting a product. (Democrats, whose party embraces larger government, get a more of a free pass on this.)

That makes it all the more interesting that a handful of key House Republicans are surprisingly cautious about lifting the ban on crude-oil exports, which Congress put in place in the aftermath of the 1973 oil embargo by Middle Eastern producers.

"For us to be introducing legislation to allow the exports right now might be a little bit premature," House Energy and Power Subcommittee Chairman Ed Whitfield, R-Ky., said in an interview Thursday. "I think we need to let this whole thing play out."

Legislation aside, he did not say whether he would support lifting the ban, as Senate Energy and Natural Resources ranking member Lisa Murkowski, R-Alaska, did in a speech last week.

 

Instead, Whitfield went into a lengthy description of how the issue is more complex than simply producing a lot more oil than the country has in decades. He said oil coming out of North Dakota's vast Bakken field is a different type of oil than the type the country's main refinery hub along the Gulf Coast is equipped to process. He mentioned the Jones Act, which requires all goods—including energy products—that are shipped in U.S. waters from one part of the country to another to be transported on a vessel built in the U.S. Lastly, he made an argument that will resonate across parties and the country:

"We're still importing oil," Whitfield said.

The country is importing about 40 percent of its petroleum, which is the lowest amount since 1991, according to the Energy Information Administration, but that's still a large percentage. EIA predicts that number could drop even lower to 28 percent in years to come given America's oil boom.

Whitfield's comments are similar to those made Friday by Rep. Doug Lamborn, R-Colo., who chairs the Energy and Mineral Resources Subcommittee of the House Natural Resources Committee. He used the crude-oil export ban as an opportunity to criticize the Obama administration for not allowing more drilling in the Gulf of Mexico. He finally arrived at his rather small answer to this big debate.

"As long as 85 percent of our outer continental shelf remains closed by this administration, as long as less than 2 percent of our federal onshore mineral estate is available for leasing, as long as this administration drives out resource development on new sources of energy like domestic oil shale, those discussions are premature," Lamborn said at a hearing on domestic energy production Friday.

"Let me be clear, I support free trade," Lamborn stressed. "I also support American energy independence and that is a road we are on but we are still far from our goal."

Even the most committed free-marketers realize Washington will not look on this debate lightly. Old memories die hard, and politicians of all parties are also terrified that lifting the ban could raise gasoline prices, or at least be portrayed that way on the campaign trail.

"The jitters about energy independence are shared by House members as well as the general public," said Marlo Lewis, a senior fellow at the Competitive Enterprise Institute, a conservative, libertarian think tank. "There are a lot of people who still look at these issues through the memories of the 1970s, and that's a political reality."

Environment and Economy Subcommittee Chairman John Shimkus, R-Ill., has a more nuanced answer. He first described how all commodities, ranging from corn to beans to natural gas, should be exported without restrictions. Then, he finally arrived as his (sort of) answer:

"Public-policy-wise, if you want to be consistent, crude oil is a bulk commodity and you should be able to export it," Shimkus said in an interview last week. But, then the caveat comes: "I would rather the crude go to U.S. refineries to get refined and then export the refined product because we get double, triple the money."

These Republicans and most other people in Washington have been caught a bit flat-footed by this debate, which many didn't expect to come into the spotlight as quickly as it has.

The House Energy and Commerce Committee is gearing up to release a report on the geopolitical benefits of exporting natural gas, a topic that Washington delved into last year. Now, the export debate is passing the committee by, at least for the time being.

"Give us a little while. We're in the midst of doing some analysis," Committee Chairman Fred Upton, R-Mich., told Environment & Energy Daily last week.

Indeed, this debate is still in its infancy, and politicians will surely evolve (political euphemism for "change") their positions over the next year or more. In fact, Shimkus did once say that with natural-gas exports, he came around to the idea of supporting that policy change.

But natural gas doesn't affect gasoline prices. And that's why this debate is different—and tougher—for Republicans (and, less so, for  Democrats).

"To call for the removal of the crude-oil export ban, even if a lot of people don't know about it, once they hear about it, it can take on the character of the sacred cow," Lewis said. "I don't think anything having to do with natural gas and export does."

This article appears in the January 13, 2014 edition of NJ Daily.

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