Sens. Lisa Murkowski and Heidi Heitkamp introduced bipartisan legislation Wednesday to squash a 40-year-old ban on exporting crude oil from the United States.
The bill is meant to give large producer states like Democrat Heitkamp’s North Dakota, which has become one of the country’s largest producers of shale oil, the option of selling oil on the global market.
“With this abundance, we have an opportunity to supply the energy Americans need every day as well as helping our friends and allies around the world,” a fact sheet said.
Although oil prices have fallen in recent months, the price per barrel of oil has been inching higher in the last week. The Heitkamp has said that giving producers the option to sell on the global market would still be beneficial even at the lower price point. The price per barrel is nearly $40 lower than what it was a year ago.
The ban was put in place in the 1970s in response to the Saudi oil embargo. The idea of removing the ban has generated controversy, as some fear it could harm the economy and raise fuel prices.
The oil ban legislation will add to a robust energy agenda that Alaska’s Murkowski, the GOP chairwoman of the Energy & Natural Resources Committee, is driving in the committee. But committee aides say she won’t push the measure at the expense of passing a comprehensive energy bill at the end of the year.
Committee aides said Murkowski is reluctant to push a bill that would create a wedge between senators and scuttle prospects for passing an energy bill. She will press the oil ban measure where the opportunity is most ripe to address it, including as an amendment to bills on the Senate floor, aides said.
The crude oil measure has generated opposition from a group of refiners that argue it will harm U.S. consumers with higher fuel prices, while harming refiners who would be forced to buy more expensive crude oil off the global market.
Right now, some refiners are benefitting from buying U.S. crude oil at a discount, allowing them to expand operations and create more jobs. If the ban were removed, it would change that scenario dramatically, according to proponents of keeping the ban.
Heitkamp recently told a group of state attorneys general that the hard part in moving the bill will be to convince her colleagues that removing the decades-old ban will not drive up gasoline prices.
There are several studies that say lifting the ban would not drive up the price of gasoline, Heitkamp said. Nevertheless, it is a risk that her fellow senators are not comfortable, yet, in taking, she said.
She added if there was a “guarantee” that it would not drive up the price of gasoline, her colleagues would vote for it immediately.
The bill also gives the president the ability to curtail exports if he feels it is in the nation’s interest, while keeping in place a strategic oil reserve for national emergencies.
A letter sent to Murkowski and Heitkamp on Wednesday by a coalition of large oil and gas trade associations expressed support for the bill, downplaying fears that lifting the ban would raise gasoline prices.
“Moreover, because American gasoline prices are determined based on the international marketplace rather than the U.S. market, exports of U.S. crude oil will have a stabilizing effect on gasoline prices as those increased oil supplies put downward pressure on the world marketplace and reduce price volatility for refined petroleum products,” the coalition letter read.
The coalition includes the American Petroleum Institute, Independent Petroleum Association of America, U.S. Oil and Gas Association, the U.S. Chamber of Commerce, American Production and Exploration Council and Producer for American Crude Oil Exports.
