Murkowski Joins Growing Chorus Calling to Lift Ban on Crude-Oil Exports

Senator Lisa Murkowski, R-AK, seen during the Senate Interior, Environment and Related Agencies Subcommittee hearing on June 23, 2010 on Capitol Hill In Washington, DC. The committee is holding a hearing on Minerals Management Service reorganization. 
National Journal
Amy Harder
See more stories about...
Amy Harder
Jan. 7, 2014, 6:36 a.m.

The seni­or Re­pub­lic­an on the Sen­ate En­ergy and Nat­ur­al Re­sources Com­mit­tee called for the lift­ing of the na­tion’s dec­ades-old ban on crude-oil ex­ports in a speech Tues­day, adding a key voice to a grow­ing chor­us sup­port­ing the policy change.

“I am call­ing for end­ing the pro­hib­i­tion on crude-oil and con­dens­ate ex­ports,” En­ergy rank­ing mem­ber Lisa Murkowski of Alaska said in an ap­pear­ance at the Brook­ings In­sti­tu­tion. “The cur­rent sys­tem is in­ef­fi­cient and may lead to sup­ply dis­rup­tions that we can ill af­ford.”

Chan­ging this cur­rent sys­tem, which dates back to the 1973 OPEC oil em­bargo and skyrock­et­ing gas­ol­ine prices, will be a Her­culean task. Just a year or two ago, be­fore Wash­ing­ton caught up to the re­per­cus­sions of the na­tion’s oil and nat­ur­al-gas boom, such a policy change was con­sidered un­think­able. Murkowski said the ad­min­is­tra­tion has the power to change the law it­self, which is ad­min­istered with­in the Com­merce De­part­ment and al­lows only a very small amount of crude oil to be ex­por­ted. She doesn’t think le­gis­la­tion is ne­ces­sary, but if the ad­min­is­tra­tion doesn’t move for­ward, she’s pre­pared to.

“If the ad­min­is­tra­tion is un­will­ing to act on its own or if that stat­utory au­thor­ity needs fur­ther modi­fic­a­tion, I’m pre­pared to in­tro­duce le­gis­la­tion to mod­ern­ize the laws,” Murkowski said.

She went on to say that per­haps Wash­ing­ton could pur­sue a two-pronged ap­proach: Con­gress could push le­gis­la­tion on up­dat­ing the na­tion’s en­ergy in­fra­struc­ture, which is out­dated and not equipped to handle the oil and nat­ur­al-gas boom of the past six years, and the ad­min­is­tra­tion could do its part to lift the ban on crude-oil ex­ports.

Since 2008, U.S. oil pro­duc­tion has in­creased 56 per­cent, and crude-oil im­ports have cor­res­pond­ingly fallen to the low­est level since the mid-1990s. In re­sponse to this oil boom, re­finer­ies have been ex­port­ing re­cord amounts of gas­ol­ine, dies­el, and oth­er products re­fined from oil, which do not face the same fed­er­al trade re­stric­tions as crude oil.

One of the biggest — if not the biggest — chal­lenge to chan­ging the law re­strict­ing crude-oil ex­ports will be con­cerns about wheth­er lift­ing the ban would in­crease gas­ol­ine prices, a claim con­sumer ad­voc­ates and some mem­bers of Con­gress, in­clud­ing Sen­ate For­eign Re­la­tions Com­mit­tee Chair­man Robert Men­en­dez, D-N.J., and Sen. Ed­ward Mar­key, D-Mass., have made. Murkowski ad­dressed this dir­ectly in one of the most force­ful parts of her speech.

“Op­pon­ents of trade will be quick to as­sert, too of­ten without cit­ing any evid­ence, that ex­ports of crude oil will raise gas­ol­ine prices for Amer­ic­an con­sumers,” Murkowski said in her speech, which was also ac­com­pan­ied by a white pa­per on the top­ic. “This claim is wrong, but it must be dealt with im­me­di­ately and head-on.”

She con­tin­ued: “I have said re­peatedly — and I mean it — that the goal must be to make en­ergy more af­ford­able,” Murkowski said. Chan­ging this policy dur­ing an elec­tion year, when high gas­ol­ine prices can mean the death of any in­cum­bent, is about as dif­fi­cult as a task could get.

“What you need to re­mind Amer­ic­ans, what you need to re­mind mem­bers of Con­gress, is that when you in­crease sup­ply, that ac­tu­ally helps re­duce price,” Murkowski said after her speech.

Charlie Dre­vna, pres­id­ent of the trade group rep­res­ent­ing re­finer­ies, the Amer­ic­an Fuel and Pet­ro­chem­ic­al Man­u­fac­tur­ers, said gas­ol­ine prices prob­ably wouldn’t be af­fected.

“I don’t know what ef­fect it’d have, if any,” Dre­vna said in a re­cent in­ter­view. “It’s go­ing to be set on a glob­al mar­ket.”

Some of Dre­vna’s mem­ber com­pan­ies, in­clud­ing Valero, do not sup­port lift­ing the ban. Dre­vna said his group doesn’t op­pose lift­ing it. Non­ethe­less, a rift is brew­ing with­in the oil in­dustry over how much the policy should change, since re­finer­ies are reap­ing a fin­an­cial wind­fall from the glut of oil in the coun­try.

“They’re go­ing to have to deal with that with­in the in­dustry,” Murkowski said. “From a policy per­spect­ive, it’s good policy, again, to al­low for that level of trade. My in­terest is not to pro­tect the re­finer­ies’ bot­tom line.”

Men­en­dez said Tues­day that he re­mains un­con­vinced that ex­port­ing crude oil is in the na­tion’s in­terest.

“If it doesn’t get used do­mest­ic­ally, then it doesn’t help the con­sumers in this coun­try,” he said in the Cap­it­ol.

“Someone needs to make the con­nec­tion for me — why we should drill but not in­sist that the oil stay here,” Men­en­dez said.

Sen­ate En­ergy and Nat­ur­al Re­sources Com­mit­tee Chair­man Ron Wyden, D-Ore., was less crit­ic­al but didn’t en­dorse the idea either.

“My po­s­i­tion with re­spect to that whole dis­cus­sion is A) I know we are go­ing to have a de­bate on that and B) Mak­ing sure that the bot­tom line is that any­thing done pro­tects the con­sumers’ in­terest,” he told re­port­ers in the Cap­it­ol.

“Cer­tainly there are go­ing to be ques­tions raised about how the con­sumer is go­ing to fare in all this, and that is go­ing to be my fo­cus,” Wyden ad­ded.

Mar­key said he would re­lease re­ports soon that de­scribe how ex­ports would harm the U.S. eco­nomy and se­cur­ity.

“The Amer­ic­an people want our Amer­ic­an re­sources to stay here to be­ne­fit our in­dus­tries, our fam­il­ies, and our se­cur­ity, not sent to China and oth­er com­pet­it­ors,” Mar­key said in a state­ment.

Ben Geman contributed to this article.
What We're Following See More »
FRENCH IS A LAWYER, VETERAN
Kristol Recruiting National Review’s David French for Third-Party Run
8 hours ago
THE LATEST

"Two Republicans intimately familiar with Bill Kristol’s efforts to recruit an independent presidential candidate to challenge Donald Trump and Hillary Clinton have told Bloomberg Politics that the person Kristol has in mind is David French -- whose name the editor of the Weekly Standard floated in the current issue of the magazine.

French is a veteran of Operation Iraqi Freedom. According to the website of National Review, where French is a staff writer, he is a constitutional lawyer, a recipient of the Bronze Star, and an author of several books who lives in Columbia, Tenn., with his wife Nancy and three children."

Source:
CALIFORNIA VOTES IN A WEEK
Jerry Brown Backs Clinton
10 hours ago
THE LATEST

California Gov. Jerry Brown endorsed Hillary Clinton today, calling her "the only path forward to win the presidency and stop the dangerous candidacy of Donald Trump." While praising Sen. Bernie Sanders' campaign, Brown said "Clinton’s lead is insurmountable and Democrats have shown – by millions of votes – that they want her as their nominee. ... This is no time for Democrats to keep fighting each other. The general election has already begun."

Source:
GLASS CEILING STILL HARD TO CRACK
Clinton Says Voters Still Hung Up on Gender
13 hours ago
THE LATEST

In a New York Magazine profile, Hillary Clinton said she still encounters misogyny at her own events: “‘I really admire you, I really like you, I just don’t know if I can vote for a woman to be president.’ I mean, they come to my events and then they say that to me.”

Source:
CHANGE WE CAN’T BELIEVE IN
Trump Vows Not to Change
13 hours ago
THE LATEST
Source:
BACKING OUT ON BERNIE
Trump Won’t Debate Sanders After All
4 days ago
THE LATEST

Trump, in a statement: “Based on the fact that the Democratic nominating process is totally rigged and Crooked Hillary Clinton and Deborah Wasserman Schultz will not allow Bernie Sanders to win, and now that I am the presumptive Republican nominee, it seems inappropriate that I would debate the second place finisher. ... I will wait to debate the first place finisher in the Democratic Party, probably Crooked Hillary Clinton, or whoever it may be.”

×