Congress girds for fight over ban on oil exports

Proponents of lifting a decades-old ban on U.S. crude oil exports are working to shore up support in Congress, ahead of expected votes in both chambers this fall.

The powerful oil industry sees momentum in the push for one of its top priorities, following a committee vote in the Senate to end the restrictions and an announcement of support from Speaker John Boehner (R-Ohio) just before Congress departed for its August recess.

{mosads}“In both sides and both chambers, we’re seeing very positive movement,” said Erik Milito, director of Upstream and Industry Operations at the American Petroleum Institute (API).

“There’s a lot on the calendar in both chambers as well, so we’ve got to exercise a degree of patience as well,” he said. “But this is an issue that should really be a no-brainer, because we’ve got a policy in place that is stifling economic growth, and it’s restricting our ability to help our allies.”

Opponents of crude exports, including environmentalists and some petroleum refiners, meanwhile, are stepping up their efforts to show lawmakers that opening the country’s oil market to the world could increase gasoline prices for American consumers and harm the environment.

Critics of the 1975 ban, meant to protect Americans from international energy price problems, counter that it is outdated, because the United States is producing near-record volumes of oil domestically.

They have claimed a series of victories in recent months, as the Obama administration and federal lawmakers appear increasingly open to relaxing the restrictions.

Among the most significant came last month, when the administration approved a number of oil exchanges with Mexico.

The Iran nuclear deal has also been a potential boon for opponents of the ban; if allowed to proceed, it will eventually allow Iran to export hundreds of thousands of barrels of oil, fueling arguments that the United States is hampering its own oil industry while letting Iran’s thrive.

And oil export supporters celebrated a pair of small victories in August, when two top Democrats indicated they had softened their opposition to shipping crude.

Senate Minority Leader Harry Reid (D-Nev.) told Politico that he “sees room for a compromise,” while Sen. Bob Menendez (D-N.J.), previously a vocal opponent of lifting the ban, signaled in a speech that he might be open to “strategic” exports. Menendez later clarified that he does not want to change the law and would rather work within current legislative limits.

Republican leaders in both the House and Senate have not yet announced plans for votes, spokesmen in their offices said. 

But Rep. Joe Barton (R-Texas), who’s sponsored a House bill to lift the ban, said leaders told him it will come up for a vote in the fall.

Robert Dillon, a spokesman for Senate Energy and Natural Resources Committee, said Chairwoman Lisa Murkowski (R-Alaska) is also hoping for a floor vote soon.

“We are ready to go — the committee has done its work — as soon as floor time opens up,” he said. “There’s lots on the agenda for the floor, but energy is obviously an important issue for the nation.”

Lobbyists and advocates worked over Congress’s summer break to build support for exporting crude, targeting both lawmakers and the general public.

“There was a tremendous effort that several companies and groups participated in to continue to educate and raise the profile of the issue,” one oil company lobbyist said.

Lobbyists said their focus is on Senate Democrats, because there already appears to be sufficient support in the House and among Senate Republicans.

“It’s going to be your centrists and your national security-based Democrats [who] seem to be much more willing and open to discussing this,” the lobbyist said, declining to name specific lawmakers.

“The real push is going to be over the next 30 to 45 days, and it’s going to be about real jobs, GDP growth and lower gasoline prices,” he added.

Milito said there’s also a continuing push aimed directly at constituents.

“We’re making sure that they’re educated, and they’re reaching out to their elected officials,” he said, adding that the API is also working with chairmen of the committees with jurisdiction to push them for votes.

The industry’s push was buoyed on Tuesday by a report from the Energy Information Administration concluding that exports would either cause no change to gasoline prices or in fact reduce prices, because they could push international oil prices down.

Opponents are also focusing largely on public relations, betting that voters will reject the idea when they hear more.

“As this gets closer to a vote, members of Congress will hear more from average Americans,” said Jay Hauck, head of Consumers and Refiners United for Domestic Energy, or CRUDE, a coalition of independent refiners pushing to keep the export restrictions in place.

“And the more that average Americans hear about this, the less they like it.”

CRUDE argues that exports will inevitably increase gasoline prices, because refiners would have to pay more for oil.

Environmentalists may also become more vocal on oil exports as the votes near.

They argue that lifting the ban could cause more demand for oil, along with the climate change and environmental impacts that burning oil brings.

“For Sierra Club and some other groups, it’s gotten to be a big issue, because they are nervous both from a climate angle … and you could see more pressure to drill in areas that are currently off-limits,” said Athan Manuel, a lobbyist with the Sierra Club.

Working with the United Steelworkers, a union that represents refinery workers, the Sierra Club has been pushing publicly and on Capitol Hill the message that the oil industry does not need exports.

“This is going to be a big fight, an important fight for environmentalists to get engaged in, and I think you’re going to see more actions from many environmental groups when Congress gets back,” Manuel said.

The Center for American Progress released a report in August attempting to quantify some of the environmental impacts of lifting export restrictions. It found that, at the very least, it would cause an increase in domestic oil drilling.

“Congress is heading into a debate without having a good understanding of the implications of a major policy change in the U.S. energy world,” said Matt Lee-Ashley, a senior fellow at the think tank.