Sen. Heidi Heitkamp says her push to repeal a ban on oil exports faces a number of hurdles, including fears among her colleagues in Congress that scrapping the 40-year-old policy would drive up U.S. gasoline prices.
The North Dakota Democrat told a group of state attorneys general that a lot more education has to be done to bring lawmakers and the public up to speed on the positive effects of removing the export ban, before it can be repealed. The attorneys general were in Washington for a two-day summit on energy exports.
“The policy of prohibiting exports of oil is wrong, wrong, wrong on so many levels,” she said. “So, why isn’t this a no-brainer?”
Heitkamp said the “number one reason” for not supporting a common-sense reversal of the policy is the belief “that if they vote for this and gas prices go up” they will pay a political price.
The oil export ban was established in the 1970s in the wake of the Saudi oil embargo. But the energy landscape has changed since then, with shale oil driving an energy renaissance that has made the U.S. less dependent on foreign oil imports.
Heitkamp, with GOP Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski of Alaska, introduced an amendment to remove the ban. The amendment would be to a bill being debated on the Senate floor to give Congress a say in any nuclear deal with Iran.
Heitkamp said the amendment will not succeed, but its purpose was to raise awareness about the issue in the hope of removing her colleagues’ apprehension.
“If you can guarantee that gasoline prices will stay stable over a long period of time, people would do this tomorrow,” said Heitkamp, adding that several studies have shown exports would not raise gasoline prices.
“One thing you should know is the president could lift it tomorrow. He already did it on condensates, which are crude [oil] derivatives,” she said. The president’s apprehensions are more political than anything else, she noted, saying he would rather have Congress act than take a lashing for fully repealing the ban.
Heitkamp said removal of the ban does not mean all the oil being produced in the U.S. will be going overseas. It would help the U.S. compete with other countries that already take advantage of a global oil market, she said.
“You are creating more energy insecurity by not doing it,” the senator said. If producers “can’t economically produce in our states, where are they going to take that investment? They are going to take it overseas. They are going to take it some place where they can in fact produce and sell it into the global market.”
She said Murkowski’s plan is to introduce legislation in the energy committee this summer to abolish the oil export ban. But trying to include it in a comprehensive energy bill poses its own risks, Heitkamp said.
As soon as a big comprehensive bill is introduced, there will be lawmakers trying to “pile on” amendments that could grind the debate to a halt, she said.
She said there could be a deal worked out between Democrats and Republicans, in which the GOP support extending tax credits for wind power if the minority party agrees to back removal of the oil export ban.
American Petroleum Institute CEO Jack Gerard said in a conference call with reporters Wednesday afternoon to expect a growing number of Democrats next week announcing support for a bill in the House to repeal the ban. “Momentum is clearly building … in a bipartisan way,” he said.
Nevertheless, a group of refiners called the CRUDE Coalition is opposing the removal of the ban. Jay Hauck, the group’s executive director, says consumers are benefiting from keeping the ban in place. He says that the risk of fuel prices rising from removing the ban are real and need to be weighed seriously in any debate.
“What people overlook is the effect on the refining sector and how that affects everything else.” Hauck said. If more crude is pushed overseas, refiners would become subject to the higher costs of imported crude oil, which would drive up the cost of gasoline and other petroleum products, he explained.
Encana CEO Doug Suttles, who joined Gerard on the call, said the export ban is creating a situation where “low oil prices have taken a toll on producers” in states such as North Dakota and Texas, and “U.S. crude is essentially land locked.”
“What we need is a level playing field … to achieve a global price for our products,” Suttles said.
Adding U.S. crude oil to the global market would lower oil prices, forcing fuel prices down, not up, Suttles said. He noted a report from the Government Accountability Office that showed that repealing the ban would lower gasoline prices.
Removing the ban would create jobs, increase tax revenues to finance schools, roads and infrastructure, he noted. “Its an economic win for all Americans.”
