Washington should lift its decades-old ban on crude-oil exports regardless of some oil companies’ opposition to it because it’s in the country’s national interests, American Petroleum Institute CEO and President Jack Gerard said Tuesday.
Gerard addressed a report by National Journal published Tuesday that a rift was brewing within the industry — between domestic producers and refiners — over whether the ban should be lifted.
Because the ban applies only to crude oil, refiners are bettering their bottom lines by exporting refined oil products at record rates. Some refiners oppose ending the ban. That’s not the case with API’s more than 500 members, Gerard said Tuesday.
“We believe the national interest will overwhelm self-interest,” Gerard said in an interview after his group’s annual luncheon. “There will be some who will articulate self-interest. We don’t believe that’s in the best interest to the nation.”
Gerard was asked if there was unanimity among all API members, including those that are primarily refiners like Marathon Petroleum and Phillips 66 as well as industry giants such as Exxon Mobil and Chevron that both produce and refine oil. “I know our member companies are on the same page,” he said.
In emailed responses to National Journal last week, spokesmen for Marathon and Phillips said they don’t oppose lifting the ban. Another refiner, Valero, said it does not support ending the ban. Valero is not an API member but is part of the American Fuel and Petrochemical Manufacturers, a small trade group representing refinery companies whose official position is also supportive of lifting the ban.
Some refiners privately oppose lifting the ban, and others are still figuring out what their official position should be.
Gerard delivered his annual State of the Energy speech at his group’s luncheon Tuesday, and to the surprise of some analysts and attendees, he fell short of calling explicitly for lifting the oil-export ban, which dates back to the 1973 OPEC oil embargo, to be ended. So, was that intentional?
“No, not at all,” Gerard said. “I probably fell short in a lot of areas.”
He had also indicated a couple of months earlier that this wasn’t a top-tier issue for his group, a sign of how quickly things can change in a city where politics usually slow everything down.
“We’re not focused on that primarily in the short-term,” Gerard said in an interview with National Journal in November.
In less than two months, statements by major oil companies and a signal of willingness to revisit the ban by Energy Secretary Ernest Moniz has thrust the issue to the front burner. A major speech by Senate Energy and Natural Resources Committee ranking member Lisa Murkowski, R-Alaska, calling for an end to the crude-export ban also gave new energy to the issue.
This has all changed Gerard’s outlook.
“I think the events have overtaken the original thought that [the export ban issue] would gradually roll out over time,” he said.
While the debate has come quickly, action in Congress is likely to be much slower, if it comes at all.