An expected House vote Friday on a bill lifting the federal ban on oil exports is driving a wedge between manufacturers, who are divided over supporting the repeal and fearing that it could raise energy costs.
Trade groups representing large manufacturers sent out dueling statements Thursday on their preferences for repealing and keeping the 40-year-old ban on crude oil exports.
Paul Cicio, the president and CEO of the Industrial Energy Consumers of America, urged members of Congress to oppose the House measure, because it repeals the president’s authority to restrict exports in the event of a crisis.
Opening up export of oil, natural gas and other fuel sources, without that “safety valve” in place, could jeopardize the national interests of the country and harm manufacturers and consumers, Cicio said. He represents some of the largest manufacturers, and hence largest consumers of energy, in the nation.
The group has watched the export debate, as any reduction in supply from exports could increase prices domestically. Some large manufacturers have warned that any policy that increases the cost of energy could move U.S. companies overseas.
Cicio said he would support the bill if it did not repeal the president’s authority. “We should not be so short sited,” he told the Washington Examiner. Oil prices currently are low, but “in the future … it can become a very significant cost issue for manufacturing.”
“All we need is an adjustment” to the bill to keep the safety valve in place, he said. “We shouldn’t throw out the baby with the bath water.”
Other groups, however, have no problem with eliminating the president’s authority. The National Association of Manufacturers, the largest trade association representing U.S. manufacturing, came out in support of the bill Thursday.
The group sent a letter to members of Congress urging them to support the bill. They say the legislation helps “to adapt to changing crude oil conditions” given the U.S.’s position as the world’s largest oil and natural gas producer.
The letter says this week’s vote could be considered the most important vote for manufacturers in the 114th Congress. They argue that the U.S. has a global commitment to repeal the ban, which would help meet its obligations to create an even market under World Trade Organization rules.
But Cicio questioned the National Association of Manufacturers’ motivations. He said supporting the bill as it is written would make the U.S. more subject to policies dictated by the Organization of the Petroleum Exporting Countries.
In the “long term these markets are controlled by sovereign countries” that support other priorities that are different from “how true markets work,” Cicio said.
The difference between the manufacturers he represents and those represented by the National Association of Manufacturers, he said, is that National Association of Manufacturers also represents the producers of oil, natural gas and electricity that sell energy to his members.
“They want to see the price as high as possible, and we want to see prices as low as possible,” Cicio said.
