This coming fall, the U.S. Senate and House of Representatives may vote on bills that would remove the ban on exporting oil produced in the U.S. The ban has been in place since the 1970’s. Action in Congress would follow decisions by the Obama administration to allow for the export of more types of produced petroleum products.
In recent months, the administration allowed leasecondensate that has been refined through a crude oil distillation tower to be exported as a petroleum product. This August, the administration announced its intention to approve “swaps” of light U.S. crude oil for heavy crude oil from Mexico under an existing statutory exemption. These are incremental measures that could pave the way for more ambitious government approvals for the exportation of domestically produced crude oil. If the House and Senate pass measures to lift the export ban, the bodies must still reach agreement to enact a final bill and send it to the president to sign into law.
On 30 July, the Senate Energy Committee reported to the Senate on a 12-10 party line vote the “Offshore Production and Energizing National Security Act of 2015” (OPENS Act). Included in the OPENS Act is a provision that would eliminate the long-standing ban on exporting crude oil from the U.S. by repealing certain sections of the Energy Policy and Conservation Act of 1976. The export ban repeal provisions included in the OPENS Act are essentially the same as those included in S. 1372, the “American Crude Oil Export Equality Act”. S. 1372 was introduced on 19 May 2015 by Sen. Heidi Heitkamp (D-ND) and co-sponsored by Sen. Lisa Murkowski (R-AK), Sen. Joe Manchin (D-WV), and Sen. Bob Corker (R-TN).
In addition to repealing the ban on the export of U.S. crude oil, the OPENS Act would ensure revenue sharing for the state and coastal communities of Alaska and provide revenue sharing and key protections for Outer Continental Shelf (OCS) development in the Gulf of Mexico and the Southern Atlantic. The bill would also create the Tribal Resilience Program to provide funding for tribal entities to promote resilient communities through investments in energy systems and critical infrastructure to combat erosion, improve health and safety, and foster resilient communities. The Land and Water Conservation Fund (LWCF) would receive 12.5 percent of the remaining funds available.
Knowledgeable Senate staff predicts that the bill has a greater than 50-50 chance of being passed by the Senate. Senate Minority Leader Harry Reid (D-NV) has said that he is willing to discuss the issue. It is likely that the bill will have to be packaged with a larger bill since it is unlikely that it could garner the 60 votes required to invoke cloture. There are, however, many moderate Democrats who would support passage of the measure if it is packaged with other provisions that those Senators support.
In the House, H.R. 702, introduced 4 February 2015 by Rep. Joe Barton (R-TX-06) with 113 cosponsors, would repeal the oil export ban. The bill amends the Energy Policy and Conservation Act to repeal authority to restrict the export of: (1) coal, petroleum products, natural gas, or petrochemical feedstocks; and (2) supplies of materials or equipment necessary to maintain or further exploration, production, refining, or transportation of energy supplies, or for the construction or maintenance of energy facilities within the United States. The bill would also prohibit any federal official from imposing or enforcing any restriction on the export of crude oil. Of interest and on a policy related matter, the bill requires the Secretary of Energy to study and make recommendations on the appropriate size, composition, and purpose of the Strategic Petroleum Reserve.
It is unclear how the bill will move forward in the House, but it is virtually assured that it will. House Majority Leader Kevin McCarthy (R-CA-23) has said that the bill will come to the House floor for a vote this fall. Whether it is considered by itself as a stand-alone bill or in a package with other measures is not clear. On a procedural note, the House Committee on Energy and Commerce has held hearings at the Subcommittee level, but no vote has been taken by the Committee. If the leadership of the House brings the bill to the floor without a vote at Committee it is very likely that the vote could split on a partisan basis if only for procedural reasons.