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. 
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Amy Harder
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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.
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