House Energy and Commerce Committee Chairman Fred Upton issued his strongest comments yet about lifting the U.S. ban on crude oil exports Tuesday, but stopped short of endorsing the end of the 40-year-old policy.
“Oil exports can be a win for the American people and a win for our allies,” the Michigan Republican said at a committee hearing, later adding, “The case for creating more jobs by expanding the market for American oil is a key reason why oil exports should be on this committee’s agenda this year.”
However, he later told reporters that his comments did not mean he endorses ending the ban.
“I stopped short of endorsing the legislation but I think that we need to look at the policy,” Upton said. “I carefully wrote those remarks. So I don’t want to go beyond that at this point.”
Many Republicans are skittish about ending the export restrictions for fear of being blamed by voters if gasoline prices rise. Upton has been open to the idea of discussing oil export legislation, but hasn’t come down on where he stood.
But the debate is picking up on Capitol Hill as oil prices have crashed from above $100 per barrel in June to a six-year low of $44 per barrel in January, though Brent crude prices have recovered to about $65 per barrel.
Crude producers say exporting fuel abroad would allow them to fetch higher world prices, as infrastructure constraints in the United States forces some companies to sell crude at a discount to refiners. They argue there’s a glut at refineries that are equipped to handle heavy sour crude rather than the light sweet crude coming from shale regions in Texas, North Dakota and elsewhere.
“The chairman’s comments reflect one more brick in the foundation of a new American energy policy that is built on abundance and opportunity for U.S. small producers, consumers and American allies,” Mike Cantrell, chairman of the National Stripper Well Association, a trade group representing drillers most affected by low oil prices, told the Washington Examiner.
The American Petroleum Institute added that it was “very encouraged by the chairman’s statement.”
Still, the politics around ending the oil export ban are raw. Energy Secretary Ernest Moniz reiterated previous comments that the U.S. still imports 7 million barrels of oil per day, which is nearly as much as the 9.3 million barrels a day the Energy Information Administration predicts the nation will produce this year.
Upton also noted he is keeping legislation regarding the ban out of a large energy package his committee is trying to move in concert with the Senate Energy and Natural Resources Committee. The panel’s chairwoman, Republican Sen. Lisa Murkowski of Alaska, also is a booster of crude oil exports.
Keeping crude oil exports out of the larger energy legislation is designed to keep Democrats engaged. Most are opposed to scrapping the export restrictions because they fear it would raise oil costs. Independent refiners that don’t have drilling operations are also opposed.
“Americans are opposed to crude exports, which would raise prices at the pump for consumers. Secretary Moniz at several points during today’s hearing pointed out that America is still importing over 7 million barrels of foreign crude every day,” Jay Hauck, executive director of CRUDE, a group of refiners that oppose ending export restrictions, told the Examiner.
Refiners, however, have enjoyed a windfall in profits during the shale drilling boom because there are no restrictions on exporting petroleum products, such as a gasoline.
Despite calls from refiners and export opponents that loosening the reins on crude would raise prices, early studies have suggested gasoline and oil prices might actually drop. That’s because exports would encourage new drilling, thus adding to supply. Still, some skeptics have cautioned that there hasn’t been enough study of the issue.
• This article was originally published at 12:52 p.m. and has been updated.
