American Oil and Gas Reporter - November 2015 - 32

Federal Legislation

House Votes To Repeal Oil Export Ban
By Bill Campbell

WASHINGTON-The U.S. House of
Representatives passing legislation to lift
the nation's 40-year-old prohibition on exporting crude oil is a significant step, industry observers indicate, but it still is only
the first-and likely easiest-step in the
process.
"It certainly is significant that one
body of Congress has taken action," assesses Lee Fuller, executive vice president
of the Independent Petroleum Association
of America.
Adds Texas Alliance of Energy Producers government relations adviser, former
Congressman Charles Stenholm, D-Tx., "It
has to pass the House and Senate, and you
have to get a presidential signature. So it
is very significant; that is the first leg of
being successful."
On Oct. 9, 26 Democrats joined House
Republicans to pass HR 702 on a 261-159
vote. The bill, sponsored by Representative
Joe Barton, R-Tx., amends the Energy Policy and Conservation Act of 1975 to repeal
the administration's authority to restrict the
export of crude oil, as well as petroleum
products, natural gas, coal or petrochemical feedstocks, according to a summary
posted on the Thomas legislative website.
Two amendments sponsored by Representative Luke Messer, R-In., continue
to ban exports to state sponsors of terrorism, and specifically to Iran, according to
his office, while an amendment offered by
Representative Jared Huffman, D-Ca.,
requires the Department of Energy to report on the greenhouse gas emissions that
may result from lifting the ban. Another
amendment, according to the government website, orders a study of the "national implications of lifting the crude oil
export ban with respect to consumers and
the economy."
Americans Win
Passage of HR 702 was greeted enthusiastically by oil industry spokesmen.
National Stripper Well Association Chairman Mike Cantrell says lifting the export
ban will "allow domestic energy producers to compete on an international level."
"When America competes on the world
market, Americans win," Cantrell adds.
"The energy industry is no exception."
The International Association of
Drilling Contractors cites estimates that exporting crude oil would result in an average of 124,000 new jobs in the supply
chain and 394,000 jobs in the greater econ-

32 THE AMERICAN OIL & GAS REPORTER

omy through 2030, while adding $26
billion a year to the nation's gross domestic product.
IPAA focused on the national security
benefits. "Allowing the export of America's surplus crude oil would reduce the
need for the United States and its closest
allies to import oil from volatile regions of
the world," says President Barry Russell.
He adds, "Given the increased security threats facing the United States and its
allies, it's time to leverage our abundant energy resources here at home in support of
our security interests around the world. Lifting the trade restrictions on oil exports
would give America greater foreign policy influence, bolster our trade competitiveness and market access, and would ensure
our allies and trading partners have greater
access to secure supplies of energy."
"Lifting the ban will offer our global
allies an alternative source of energy and
lower global dependence on oil produced
from hostile regimes," agrees Texas Independent Producers & Royalty Owners Association President Ed Longanecker, who
notes, "The United States is the only major oil producing country in the world that
restricts its own exports of crude oil."

Give And Take
But House passage is only the first step,
and the next phase likely is going to require
compromise. "It is becoming more and
more difficult to envision a straight up or
down vote (in the Senate) on something
that just repeals the crude oil export ban,"
acknowledges IPAA's Fuller. "There is
going to be some give and take."
In an Oct. 14 conference call, American Petroleum Institute President Jack Gerard told reporters he "could probably
identify 20 or 30 paths to success," although he declined to be specific, according to published reports.
However, other published reports identify a variety of possibilities, such as making repeal part of a 2016 budget package
or attaching it to so-called must-pass legislation such as the Highway Trust Fund,
or to programs with some bipartisan support such as reauthorizing the Land and
Water Conservation Fund or even the Export-Import Bank. One newspaper account
quotes Senators Maria Cantwell, D-Wa.,
Martin Heinrich, D-N.M., and Ron
Wyden, D-Or., as indicating they might
support repeal "as part of a compromise
that also includes support for renewable
energy."
Two bills that would lift the export ban

have been reported by Senate committees:
* Chairwoman Lisa Murkowski's,
R-Ak., Offshore Production and Energy
National Security (OPENS) Act, which
was reported by the Senate Energy and
Natural Resources Committee on July 30;
and
* S 1372, the American Crude Oil
Export Equality Act by Senator Heidi
Heitkamp, D-N.D., which was reported
by the Senate Banking Committee on Oct.
1.
During markup on those, Fuller reports,
"What you heard most frequently was that
(Democrats) needed some sort of green energy component to make the decision on
crude oil exports. Secondarily, you heard
that they needed to have some mechanism
to make sure this wasn't economically
harmful, and then probably the third tier
was they needed to get some money out
of the deal."
Any of those present opportunities,
Fuller allows, but also create challenges.
He explains that 60 votes will be required
to gain cloture in the Senate. "That means
you have to hold all 54 Republicans, which
is by no means certain, and then get six
Democrats to support the bill, of which you
essentially have one at this time. Getting
the others, and even possibly having to get
more if you lose some Republicans, is a
big challenge."
Indeed, one newspaper analysis notes
that supporting renewable energy generally entails renewing tax credits for wind
and solar, a move many fiscal conservatives oppose.
For his part, Stenholm says he thinks
adding an export amendment to a budget bill stands the best chance of getting
through Congress this year "because all energy matters affect the budget."
That necessarily brings taxes into the
debate, he allows, because, "You are not
going to get a budget proposal passed that
doesn't have some additional revenue."
Senator Wyden, who serves as ranking
member on the Senate Finance Committee, has been quoted saying "some Democrats may back repeal in return for eliminating tax breaks for oil and gas producers."
That is a nonstarter for IPAA. "We
don't see oil taxes as being an appropriate trade-off," Fuller states. "Whether it is
(repealing) a current provision or some
new tax designed to capture some of the
revenue that would be generated as a result of exports, it is counterproductive to
the whole purpose of eliminating the ban
on oil exports."
American Oil and Gas Reporter - November 2015

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