American Oil and Gas Reporter - October 2015 - 38

Federal Legislation

Crude Exports Bill Clears Committee
By Del Torkelson

WASHINGTON-In the 1991 Hollywood comedy What About Bob?, Dr.
Leo Marvin, the renowned psychiatrist
played by Richard Dreyfus, encourages
people to address their neuroses by taking
"baby steps" that will allow them to
overcome obstacles incrementally.
Extending back to June 2014, when the
U.S. Department of Commerce was persuaded to allow some U.S. producers to export volumes of lightly treated condensate,
and continuing through the department's
August 2015 decision to allow limited
sales of U.S. crude to Mexico, efforts to
loosen the United States' longstanding restrictions on crude oil exports have taken
a number of baby steps.
September saw another step toward the
final goal: The House Energy and Commerce Committee approved by a 31-19
vote HR 702, legislation sponsored by
Representative Joe Barton, R-Tx., that
would end the U.S. export ban on crude
oil.
HR 702 cleared committee after similar legislation-Senator Lisa Murkowski's,
R-Ak., S 2011, the Offshore Production
and Energizing National Security
(OPENS) Act, had done so in the Senate
(AOGR, Aug. 2015, pg. 43).
The political calculus still includes a
number of weighty factors, various sources
indicate, including:
* A presidential campaign;
* Voters' concerns about higher pump
prices;
* Some downstream representatives
seeking to maintain their sector's margins;
* Green groups' discomfort about
siding with either producers or refiners;
* The approaching end of trade sanctions against Iran after the Senate failed to
prevent the United States from joining the
accord between Iran and the five permanent members of the U.N. Security Council plus Germany; and
* The reality of legislative bargaining
chips.
But some with their fingers on Washington's pulse are expressing optimism that
the ban's days are numbered. Louis
Finkel, executive vice president for government affairs at the American Petroleum Institute, is among those who suggest
the drive to end the ban is gaining speed.
"Bipartisan momentum is strong and lawmakers are ready to lift the outdated ban,
create new American jobs, and bolster our
energy security for generations to come,"
38 THE AMERICAN OIL & GAS REPORTER

Finkel praises. "With the administration
set to allow Iran to sell oil on the global
market, it does not make sense to restrict
our own country from exporting this
valuable commodity."
Press accounts say House Speaker
John Boehner has expressed support for
HR 702, and House Majority Leader
Kevin McCarthy, R-Ca., indicated after the
committee vote that the legislation could
reach the chamber floor in a matter of
weeks.

Gaining Steam
As North America's resource play
revolution has transformed the prospect of
significant U.S. crude exports from a
nonfactor to an item high on the oil and gas
industry's political wish list, industry advocates have emphasized the ban's obsolescence. HR 702's official description
states its purpose is "to adapt to changing
crude oil market conditions," a reference
to the ban's statutory origins in the Energy Policy and Conservation Act, which
President Gerald Ford signed in 1975.
When the House Subcommittee on Energy and Power approved HR 702 in early September, Independent Petroleum
Association of America President and
Chief Executive Officer Barry Russell noted that the bill sought to update U.S. policy in a way that recognized how the country's energy template had changed in
four decades. He also emphasized the positive economic projections and foreign policy advantages the United States could
gain from crude exports.
"By lifting the outdated crude exports
ban, we have the opportunity to spur additional investment and economic growth,
create and protect American jobs, and provide meaningful benefits to American consumers and our national energy security,"
Russell said. "More importantly, lifting the
exports ban would send a strong message
that we can produce our own affordable
energy at home, reducing our need to rely
on oil imported from the Middle East."
IPAA emphasizes that numerous economists and more than a dozen independent analyses conclude that lifting export
restrictions likely will ease international
oil prices, which may benefit gasoline consumers in the United States.
In early September, Congressman Barton observed the legislation had 126
cosponsors representing 39 states, and had
received endorsements from the Democratic Blue Dog Coalition, as well as the Republican Study Committee. By late Sep-

tember, congressional sources note, the
number of cosponsors had expanded to
137. Press accounts say Barton estimates
the version of HR 702 that cleared committee may garner 250 votes, far exceeding the minimum 218 it needs to pass.
According to media reports, the subject
of U.S. crude exports also has arisen on the
presidential campaign trail. Florida Governor and Republican Presidential hopeful Jeb Bush took up the issue in September's final days when he spoke and wrote
in favor of exporting American oil, calling it a "once-in-a-generation opportunity." That same week, in her remarks at
Oklahoma Independent Petroleum Association headquarters, former HewlettPackard Chief Executive Officer and
GOP contender Carly Fiorina ripped the
export ban.
"We are going to allow Iran to export
oil, but we will not permit the United
States of America to export oil," she
mused at an event OIPA cosponsored with
the Domestic Energy Producers Alliance
and the National Stripper Well Association.
Meanwhile, although liquefied natural
gas exports do not face the same statutory restrictions, Congress also moved in
September to improve the permitting
process associated with liquefaction facilities when the House Energy and Commerce Committee approved HR 8, the
North American Energy Security & Infrastructure Act.
Frank J. Macchiarola, executive vice
president for government affairs at America's Natural Gas Alliance, commends the
vote as one that seeks to maximize U.S.
energy abundance. "Language that would
provide greater certainty to the Department
of Energy's processing of permits for LNG
export terminals is a significant step in the
right direction," he applauds. "This policy has broad bipartisan support in both the
House and Senate. We also are encouraged
by several other provisions in the bill, including those that support workforce development and the streamlining of pipeline
permitting."
Democratic Bill
However, Democratic presidential
front-runner Hillary Clinton seems more
skeptical. Press accounts quote her expressing opposition to HR 702, and indicate she will consider lifting the crude export ban only on the condition of "concessions from the oil and gas industry." She
adds, "I am not against (exports) under all



American Oil and Gas Reporter - October 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - October 2015

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