Supporters of ending the ban on crude oil exports are mounting a full-court press to win over wary lawmakers, while keeping a close eye on global markets and the calendar.
Export backers in recent months have cited both national security and economic arguments as they look to line up the votes to repeal the decades-old ban. Earlier this week at a speech at the U.S. Energy Information Administration annual conference, Continental Resources Inc. founder Harold Hamm warned that maintaining the ban would cause U.S. production to fall by 1 million barrels a day (Greenwire, June 16).
EIA’s own data from earlier this month pegged U.S. oil production at 9.6 million barrels per day in May, but predicted that amount to "generally decline" until early 2016 before picking up again.
However, EIA’s latest forecast also noted the highest average monthly price of 2015 for the global oil benchmark — Brent crude, which rose $5 a barrel in May. At the same time, U.S. average gasoline prices rose to $2.72 last month, a 25-cent increase over April and the highest of the year so far.
Oil prices regularly rise and fall, but a continued upward trend complicates the task of persuading lawmakers to cast their votes to end the ban — and later face a voter backlash.
"I think it’s important to do it this year," Rep. Joe Barton (R-Texas), the former chairman of the House Energy and Commerce Committee, told E&E Daily yesterday. "The world market is receptive now."
While noting that the decision on timing resides with House GOP leadership, Barton said he was optimistic about a vote in the coming months. "I would say there’s a good chance this summer or early fall," he said. "That’s not based on any promises."
Barton said his staff met last week with aides for current Energy Chairman Fred Upton (R-Mich.), who earlier this month announced he had made up his mind that the time is right to legislate on the ban (Greenwire, June 2).
But in doing so, Upton stopped short of endorsing Barton’s bill (H.R. 702) to fully repeal the ban, which is nearing 70 co-sponsors from both parties. An Upton spokesman declined to comment on the committee’s plans for moving a bill, but Barton said he remains convinced that the time is right for a full repeal.
"My gosh, we’re awash in oil," he said. "We’re exporting 2 [million] to 3 million barrels of refined products a day. This thing is a holdover from the ’70s, when we were importing two-thirds of our oil. So the sensible thing to do is just knock it off the books and let the market work."
Senate export backers had hoped to test the legislative waters with a handful of amendments to the defense authorization bill, but votes on side-by-side proposals by Sens. John Cornyn (R-Texas) and Ed Markey (D-Mass.) never materialized.
Cornyn’s amendment would require new defense and intelligence estimates of the potential of U.S. exports to insulate U.S. allies from Russian energy bullying, while Markey’s espoused the "sense of the Senate" that exports should not be authorized if they increase fuel prices or U.S. reliance on oil imports. A third amendment filed by Sens. Lisa Murkowski (R-Alaska) and Heidi Heitkamp (D-N.D.) would fully repeal the export ban.
An export backer, Cornyn told reporters in November that he didn’t think the issue was quite ripe for legislative action. He blamed Democrats yesterday for blocking amendments to the defense authorization measure, but also acknowledged export backers still have some work ahead of them.
"We’re trying to be careful about how we approach it," he told E&E Daily. "When we have that vote, we want to win it, and so we’re taking an incremental approach."
Cornyn also sidestepped a question about whether it’s important to get a repeal through Congress before global oil prices rise.
"If it were up to me, I’d do it right now," he said.