Signifying a historic shift in U.S. energy policy, the House of Representatives passed legislation on October 9 that would lift the nearly 40-year ban on crude oil exports by a vote of 261 to 159. Twenty-six Democrats joined 235 Republicans to vote in favor of the bill.
During debate in the House, supporters of H.R. 702, which was introduced by Rep. Joe Barton (R-TX), emphasized the economic and geopolitical benefits of lifting the ban. Opponents, however, raised concerns about the bill’s impact on consumers, refiners and the environment. A number of members also raised concerns about the speed with which the bill was moving through the legislative process¾arguing that more time was needed to consider the implications of a policy change of this magnitude.
Prior to House action, the Office of Management and Budget issued a Statement of Administration Policy (SAP) on October 7, 2015, on behalf of the Obama administration, indicating that it “strongly opposes H.R. 702.” The SAP further states,
“[l]egislation to remove crude export restrictions is not needed at this time. Rather, Congress should be focusing its efforts on supporting our transition to a low-carbon economy. It could do this through a variety of measures, including ending the billions of dollars a year in Federal subsidies provided to oil companies and instead investing in wind, solar, energy efficiency, and other clean technologies to meet America’s energy needs.”
It concludes by stating that, if H.R. 702 were presented to the president in its current form, senior advisors would recommend that the president veto the measure.
Thus, despite the margin of passage in the House, legislation to lift the ban faces strong headwinds in the Senate, where 60 votes will be necessary for passage, and where many Senate Democrats will support the administration’s position. Nevertheless, some Democrats, including Senate Democratic Leader Harry Reid (D-NV) and even presidential candidate Hillary Clinton (D-NY), have suggested a potential for a compromise approach that would pair lifting the ban on crude exports with policies that would benefit clean and renewable energy. Indeed, the administration’s SAP joins these issues to some extent also.
In July, the Senate Committee on Energy and Natural Resources approved Committee Chairman Lisa Murkowski’s (R-AK) Offshore Production and Energizing National Security Act of 2015 (S.2011). Additionally, the Senate Banking Committee recently approved a second bill, the American Crude Oil Export Equality Act (S. 1372), which would also lift the export ban. S. 1372 is sponsored by Sen. Heidi Heitkamp (D-ND) with support from Sen. Murkowski. In addition to lifting the ban, S. 1372 would give the president authority to impose restrictions on crude exports, such as licensing requirements, in the event of national emergencies or crude oil shortages.
Finally, Senate Majority Leader Mitch McConnell (R-KY) has publicly remarked that he was discussing the issue of the crude oil export ban with the administration.