Crude Debate: Should U.S. Lift Export Ban?

BELLE CHASSE, LA - JUNE 4: An oil tanker is seen docked at the ConocoPhillips Alliance Refinery June 4, 2008 in Belle Chasse, Louisiana. The refinery, located in Plaquemines Parish, processes 247,000 barrels of crude oil per day. Oil production suffered significant damage in the state by Hurricanes Katrina and Rita but high oil prices have driven the value of Louisiana's petroleum and coal exports up 127 percent. Petroleum and coal exports totaled $2.5 billion during the first quarter of 2008 compared to $1.1 billion in the first quarter of 2007. (Photo by Mario Tama/Getty Images)
National Journal
Clare Foran and Amy Harder
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Clare Foran Amy Harder
Dec. 17, 2013, 2:40 p.m.

As Con­gress gears up to tackle the pro­spect of lift­ing the dec­ades-old ban on crude-oil ex­ports, early re­ac­tions from law­makers in­dic­ate that it will be a polit­ic­ally di­vis­ive is­sue.

“I don’t know if the polit­ics are ne­ces­sar­ily right to lift [the ban],” Sen­ate En­ergy and Nat­ur­al Re­sources rank­ing mem­ber Lisa Murkowski, R-Alaska, said Tues­day. “I do know they’re ripe for a very thor­ough dis­cus­sion about what’s go­ing to go on. It’s ex­cit­ing.”

Two oil-state Demo­crats con­sidered vul­ner­able in their reelec­tion bids next year said they would sup­port crude-oil ex­ports, which have been banned since the 1973 oil em­bargo, even as U.S. ex­ports of pro­cessed pet­ro­leum products have been boom­ing.

“I would sup­port lift­ing the ban if the sci­entif­ic data shows that we should,” Sen. Mary Landrieu, D-La., told Na­tion­al Journ­al Daily on Tues­day. “And I think that’s what the data is show­ing.”

Sen. Mark Be­gich, D-Alaska, sim­il­arly said he would sup­port ex­pan­ded crude-oil ex­ports, though he said he con­siders eas­ing re­stric­tions on ship­ments of nat­ur­al gas abroad a high­er pri­or­ity.

“There’s crude and then gas. Gas is the big one,” he said. He noted that Alaska already ex­ports nat­ur­al gas and has ex­por­ted oil in the past. (Con­gress ap­proved ex­port­ing crude oil via the Trans-Alaska Pipeline in 1996, al­low­ing a small per­cent­age of Alaskan oil — about 2.7 per­cent — to be ex­por­ted over eight years to Pu­erto Rico, the Vir­gin Is­lands, and else­where. But no crude oil has been ex­por­ted since 2004, ac­cord­ing to the En­ergy In­form­a­tion Ad­min­is­tra­tion.)

Since oil is priced on a glob­al mar­ket, Be­gich said it makes sense to ex­port it.

Murkowski is tak­ing a more cau­tious ap­proach than her Demo­crat­ic col­league from Alaska. She hasn’t taken an of­fi­cial po­s­i­tion on the pro­spect of lift­ing the crude-oil ex­port ban. She is giv­ing a ma­jor speech on the broad­er top­ic of en­ergy ex­ports on Jan. 7, which is likely to shed light on her po­s­i­tion on this top­ic.

“I’m go­ing to talk about the chan­ging dy­nam­ic with what we’re see­ing with oil pro­duc­tion across the coun­try,” Murkowski said.

Sen­ate En­ergy and Nat­ur­al Re­sources Chair­man Ron Wyden, D-Ore., was less def­in­ite about wheth­er or not he wants to see the is­sue come to the fore. The com­mit­tee is plan­ning a hear­ing on the top­ic for the early part of the year.

“It’s very much clear that there is go­ing to be a de­bate on this is­sue,” he said. “I just want to make clear that if that de­bate goes for­ward my top pri­or­ity is pro­tect­ing the Amer­ic­an con­sumer. Amer­ic­an con­sumers have really got­ten clobbered in the past, so that will be my top pri­or­ity.”

A small hand­ful of lib­er­al Demo­crats are voicing con­cerns about what price-im­pact ex­port­ing crude oil could have on con­sumers. Sen­ate For­eign Re­la­tions Chair­man Robert Men­en­dez, D-N.J., in­tro­duced le­gis­la­tion earli­er this year aimed at tamp­ing down ex­ports of pet­ro­leum products de­rived from crude oil pumped from fed­er­al lands. He ex­pressed con­fid­ence that he can garner sup­port for it.

“Many of the same people who wanted to elim­in­ate tax sub­sidies for big oil also be­lieve that keep­ing oil in the United States is what’s in the best in­terest for con­sumers,” said Men­en­dez, who has led the (so far un­suc­cess­ful) ef­fort to re­peal oil and gas tax breaks.

On Monday, the sen­at­or re­newed his push for few­er ex­ports, send­ing a let­ter to Pres­id­ent Obama ex­press­ing con­cern about com­ments En­ergy Sec­ret­ary Ern­est Mon­iz made that in­dic­ated he may be open to lift­ing the ban. Men­en­dez said Tues­day he hadn’t heard back from the ad­min­is­tra­tion yet on his let­ter.

Mean­while, one big com­pon­ent of this de­bate will simply be to edu­cate mem­bers about the is­sue.

“Nev­er thought about it really,” Sen. Joe Manchin, D-W.Va., said when asked wheth­er he sup­ports ex­port­ing crude oil. “I think ba­sic­ally un­til we be­come en­ergy in­de­pend­ent we ought to care­fully con­sider what we do with our en­ergy re­sources, ab­so­lutely.”

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