House Panel Passes Bill to Lift U.S. Crude Oil Export Ban

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September 17, 2015


ReutersWASHINGTON, Sept 17 (Reuters) – A bill to repeal the 40-year-old ban on U.S. oil exports easily passed the energy panel in the House of Representatives on Thursday, but the measure faces an uphill battle in the Senate.

The legislation, which passed 31 to 19, is expected to be passed by the full House in coming weeks.

But the bill is not backed by President Barack Obama. The White House said on Wednesday that oil export decisions are made by the Commerce Department.

And a similar bill in the Senate faces an uncertain future because backers need the support of several Democrats to ensure its passage.

Ahead of the vote, Representative Fred Upton, a Michigan Republican and the chairman of the House Energy and Commerce Committee, cited studies that say freeing exports may lower gasoline prices. He said eliminating the trade restriction would help allies in Europe that are dependent on Russia for much of their crude.

The domestic oil boom of the last six years has “flipped the script” on the need for the trade restriction, Upton said.

Congress passed the bill after the 1973 Arab oil embargo spiked crude prices and led to fears of petroleum shortages. But thanks to fracking, horizontal drilling and other advanced techniques, the United States now vies with Russia and Saudi Arabia for the spot of the world’s top oil producer.

Democrats who voted against the bill said they were concerned about the environmental consequences of increased domestic oil drilling and the possible loss of jobs at refineries and in shipbuilding.

Frank Pallone, the top Democrat on the panel, said the bill was “completely unnecessary” because Obama already has the authority to ease or remove restrictions on crude oil exports.

In addition, several Democrats said they worried the measure would give U.S. officials the power to weaken the nearly 100-year-old Jones Act, a law that requires the use of U.S.-flagged and crewed ships on shipments between domestic ports, or to prohibit the closure of a port for national security reasons.

Kevin Book, an energy policy analyst at ClearView Energy Partners, has put the chances of the bill being passed this year by Congress at 15 percent, due to increased partisanship, and a narrow window of opportunity ahead of the 2016 elections. (Reporting by Timothy Gardner; Editing by Eric Walsh and Richard Chang)

(c) Copyright Thomson Reuters 2015.

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