The Senate probably has enough votes to repeal the United States’ ban on exporting crude oil, according to a senator from an energy-producing state.
Speaking at a National Journal forum Tuesday morning, Sen. John Hoeven, R-N.D., said he believes his entire caucus and at least seven Democrats would approve a standalone bill repealing the 1970s-era ban on exporting crude oil. He said it’s unlikely such a measure would come in a standalone bill, but if it happened, the repeal would make it through the upper chamber.
Hoeven argued the ban is hurting U.S. companies by forcing them to compete with one hand tied behind their back.
“At the end of the day, what we’re talking about is making sure our industry gets a level playing field, gets a fair shot,” Hoeven said. “Isn’t that what America is all about?”
Hoeven and his fellow North Dakota senator, Democrat Sen. Heidi Heitkamp, both support a repeal of the 40-year-old ban on exporting crude oil. There are some exemptions to the law, but for the most part it is illegal to export crude oil that is produced in the United States.
While opponents of lifting the ban say they are concerned about gasoline prices rising as a result of such a measure, studies from the Energy Information Administration, the Energy Department’s independent analysis arm, and the Brookings Institution show that prices would drop.
Hoeven compared the current situation to two stores selling the same product, yet one able to make $5-$8 more per sale than the other.
“If we get $5-$8 less per product, our industry is going to atrophy,” he said.
Hoeven and Heitkamp both speculated that Obama would sign a repeal of the oil export ban, but Earnest said Tuesday that wasn’t the case.
“This is a policy decision that is made over at the Commerce Department and for that reason, we wouldn’t support legislation like the one that has been put forward by the Republicans,” he said.
Sen. Ed Markey, D-Mass., said allowing companies to export oil would end up hurting consumers.
He pointed to a study by Barclay’s that showed the export ban saved consumers $11 billion last year and could save them $10 billion this year.
“That’s big because, obviously, keeping that supply pressure on here helps to keep the price lower here,” he said.
Markey said the real beneficiaries of lifting the ban would be oil companies. They would get to sell crude oil at international prices instead of prices set in America, which are typically lower than the international market.
Many proponents say repealing the export ban would help solidify America’s relationships with its allies abroad, who would rather buy their oil from the United States instead of nations such as Russia or Venezuela.
Markey said that argument goes against fundamental capitalist principles.
“We’re not Russia. We’re not Saudi Arabia. We’re not Venezuela. Our government doesn’t tell the ships [carrying the oil] where to go,” he said, arguing those places likely would be China or other emerging Asian countries. “Our fiduciary relationship between shareholders and oil companies instructs them to send the oil toward the highest price.”
He added there are still many concerns about the environmental impact of increasing drilling in the United States. Oil production is expected to increase if the ban is lifted.
However, Heitkamp said many opponents of repealing the bill are simply out to see drilling cease. She said there is little thought given to the economic impact of such a move.
“Fundamentally, commodities have to find their market,” she said. “If we are going to be successful in America, if we are going to be successful tapping into a global economy where 95 percent of potential consumers live outside the United States of America, we cannot irrationally restrict exports of anything.
“There is absolutely no logic to not lifting this ban,” Heitkamp added.
Hoeven and Heitkamp both speculated President Obama would sign a repeal of the oil export ban should it be sent to his desk, but White House spokesman Josh Earnest hit back at those suggestions Tuesday.
“This is a policy decision that is made over at the Commerce Department and for that reason, we wouldn’t support legislation like the one that has been put forward by the Republicans,” Earnest said.
A repeal of the ban has made it through the Senate Energy and Natural Resources Committee. On Thursday, the House Energy and Commerce Committee is set to take up a similar resolution to the one advanced in the Senate committee.
