← Back to the blog

Crude Oil Exports Take Center Stage, Momentum Grows to #LiftTheBan

Crude oil exports took center stage in Washington, D.C. this week – with two Capitol Hill hearings, movement on legislation to lift the ban, and two labor unions coming out in support of crude oil exports.

On Thursday, the U.S. House Subcommittee on Energy and Power held a legislative hearing on H.R. 702, Legislation to Prohibit Restriction on Crude Oil Exports, sponsored by Rep. Joe Barton.  Witnesses discussed the economic, geopolitical and natural security benefits of this bipartisan legislation and how it will help save consumers money at the gasoline pump. Subcommittee Ranking Member Bobby Rush (D-IL) acknowledged at the hearing that the export ban may be “outdated.” Rep. Barton concluded the hearing by saying that the legislation has a “real chance to be marked-up,” though a date has yet to be set.  Earlier in the week, Rep. Barton and Rep. Henry Cuellar (D-TX) joined together in a bipartisan Op-Ed calling on their colleagues in Congress to advance crude export legislation, writing:

We will continue to push our colleagues and the president to take action to end the decades-old ban on oil exports and make the U.S. a global energy superpower. Anything short of repeal would be a missed opportunity.”

Two labor unions this week, the Laborers’ International Union of North America (LIUNA) and the International Union of Operating Engineers, came out in support of Rep. Barton’s legislation – breaking from AFL-CIO. They signed onto a letter with 20 business and supply chain trade associations calling for the ban to be lifted:

Opening global markets to U.S. producers will support added domestic production that will create hundreds of thousands of new jobs and contribute tens of billions of GDP dollars in the supply chain within the next few years. At the same time, we will put downward pressure on domestic fuel prices, while we provide our allies and trading partners with an alternative to sourcing energy from unfriendly and unstable sources.”

The U.S. House Agriculture Committee also held a hearing earlier this week that showcased bipartisan support for lifting the crude oil export ban and the job and economic benefits it would bring to rural America.  Rep. David Scott (D-Ga.) voiced his support for repealing the ban during his opening statement and Chairman Michael Conaway (R-TX) noted:

Job growth and wage increases are obvious benefits of expanding activity in the oil industry. But, rural communities also benefit in indirect ways, as well – land owners receive lease payments, residents have more disposable income to spend at stores and restaurants, and local governments see increases in sales, property, and income tax revenue. In fact, if the ban were lifted today, we would see close to a million jobs created over the next few years.”

Terry Duffy, Executive Chairman and President of the CME Group, testified at the hearing and wrote a column for CNBC that discusses how the decades-old ban harms our economy:

“Segregating U.S. crude from the world market has created price distortions that skew investment decisions and give foreign producers a leg up–the very opposite of the intended consequences.”

The events this week have generated headlines across the country, here’s what the newspapers are saying:

  • U. S. crude exports would help Europe, Czech Republic says. “‘The larger the number of stable democracies among the world’s exporters, the more robust the energy security of the Czech Republic and the European Union will be,’ Petr Gandalovic, the ambassador told a House energy subcommittee on Thursday. The country has worked to reduce its dependence on oil and gas from Russia, the top energy supplier to many Eastern European countries.” (Reuters, 7/9/15)
  • It’s time to repeal the oil export ban. “The timing may never be better. Oil prices are low, the U.S. has something of a surplus and everyone acknowledges the need for more trade. Now is the time to lift the outdated oil export ban. As Barton and Cuellar point out, ‘lifting the ban would allow the U.S. to export some of this light crude, while importing heavy crude that our refineries are better equipped to process.’  Lifting the oil export ban makes sense, and the time is right. Barton and Cuellar have a bipartisan bill that now has 70 co-sponsors. Congressional leadership should act swiftly to repeal the ban. It’s a common sense move with direct benefits to Americans.” (Tyler Morning Telegraph, 7/7/15)
  • Proponents of crude exports dominate House panel debate. “Exporting U.S. crude would drive more domestic energy production and deliver benefits to rural America, oil producers and their congressional allies said Wednesday. There’s no apparent downside to lifting the longstanding ban on crude exports, insisted House Agriculture Committee Chairman Michael Conaway, R-Midland, as his panel examined the issue.” (Houston Chronicle, 7/8/15)
  • Texas Railroad Commission chairman testifies before Congress to “lift the ban.” “In his testimony, Porter said the shale oil revolution has created record production but the crude oil export ban created a disparity in price between West Texas Intermediate and Brent crude oil. The majority of the new oil being produced from shale formations is light sweet crude and falls under West Texas Intermediate category, which has a lower price on the market. Porter testified that American refining capacity is currently not designed to economically handle the increased volumes of light sweet crude.” (San Antonio Business Journal, 7/8/15)
  • NDPC testifies in Washington to repeal crude export ban. “Kari Cutting, vice president of the North Dakota Petroleum Council, testified in front of the U.S. House of Representative’s Agriculture Committee today regarding the benefits to be gained by lifting the 1970s ban on U.S. exports of crude oil. In her testimony, Cutting said that lifting the ban ‘would create jobs, grow our economy, help decrease gasoline prices and improve our energy security.’” (The Bakken, 7/8/15)
  • Unions back oil export bill, break with AFL-CIO. “Two labor unions came out Wednesday in support of a House bill to end the ban on oil exports, breaking with the country’s largest union federation. The Laborers’ International Union of North America (LIUNA) and the International Union of Operating Engineers signed onto a letter with 20 business and industry groups supporting Rep. Joe Barton’s (R-Texas) bill to open the United States’s crude oil market to the world for the first time in 40 years.”  (The Hill, 7/8/15)
  • As Delta refinery snaps up Nigerian crude, U.S. producers ask Congress for freedom to export. “American oil producers eager to sell their bounty abroad are pointing to a Delta Air Lines refinery’s purchase of millions of barrels of Nigerian crude as fresh evidence the United States should lift its longstanding ban on exporting raw petroleum. While domestic refiners are free to buy crude from most any foreign supplier and shop around for the best price, U.S. oil producers don’t have the same luxury, said George Baker, executive director of Producers for American Crude Oil Exports.” (Fuel Fix, 7/6/15)

Tagged as: , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *