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HOUSTON CHRONICLE: House subcommittee OKs crude exports

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Washington, September 10, 2015 | comments

House subcommittee OKs crude exports

“Before permanently dismantling our nation’s ability to restrict oil exports,” Congress should address the potential impacts on consumers, refinery capacity, associated jobs and the environment, said Pallone, D-N.J.

Republicans broadly supported the bill, saying exports would give the U.S. valuable political leverage around the world and would bring economic benefits to oil producers as well as American consumers who could see modest gasoline savings, as predicted by several studies.

At least two Democrats — Bobby Rush of Illinois and Gene Green of Houston — said changes are needed before they can support the bill. They said they want an approach that combines protections for consumers and domestic refiners with any move to unleash oil exports.

Rush said he was willing to work on compromise language with the bill sponsor, Rep. Joe Barton, R-Ennis.

“While I am not able to support (the bill) at this moment, my office has been working … to see if we can come up with a proposal that I am comfortable with that would warrant my support for lifting the ban,” Rush said.

Green, who has constituents from both upstream oil producers and downstream refining interests in his Houston Ship Channel district, said he was open to exports, but described his fear that if U.S. companies can widely sell crude to refiners around the world, it could undermine the domestic refining sector.

“I don’t want to become just a resource nation and lose the downstream and processing jobs we have,” Green said, adding that any legislation needs to benefits both producers and consumers.

Possible deals could include language already in a Senate bill that would specifically let the president impose restrictions on oil exports in some instances, including during national security threats, emergencies or price spikes.

Green said he is interested in preserving some role for the Department of Commerce to restrict exports if they are not in the United States’ national interest in a wide range of scenarios.

Although the 40-year-old trade restrictions block most crude exports, some oil extracted in Alaska and California can be sold to foreign buyers. Shipments to Canada are allowed under licenses, and the Commerce Department just OK’d transactions to swap light U.S. oil for heavier Mexican crude. Gasoline and other refined petroleum products are unaffected by the oil export restrictions; they can be freely sold overseas.

Barton’s bill would bar any federal government official from imposing restrictions on oil exports.

Barton said he is willing to negotiate in the hopes of drawing more Democratic support. The bill already has 14 Democratic co-sponsors. Late Wednesday, the Blue Dog Coalition of fiscally conservative Democrats endorsed the legislation, following presentations from bill co-sponsor Rep. Henry Cuellar, D-Texas, and Continental Resources CEO Harold Hamm.

But Barton insisted that he won’t cut a deal that flouts “the underlying principle of the bill.”

“The underlying principle is the U.S. oil industry is the most competitive in the world,” Barton said. “If we create a market that they can play in — in world markets — they will be successful, and if they are successful the U.S. economy will be successful. Don’t mess with that principle.”


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