OIL AND GAS

Barton seeks 'sweet spot' on crude exports

The House Republican leading efforts to repeal the ban on crude oil exports is talking with Democrats to find "middle ground" that would boost the bill's overall support when it comes to the floor in the coming weeks.

Rep. Joe Barton (R-Texas), the chairman emeritus of the Energy and Commerce Committee, said last week that he's confident there's enough support in the House to pass his bill (H.R. 702) ending the ban but doesn't expect President Obama to sign the measure without a strong show of support from Democrats in both chambers.

"We want to put this bill on the president's desk," he told E&E Daily on Friday. "But to get it to the president's desk, you've got to have at least 60 votes in the Senate and it needs to come out of the House with a strong vote. It doesn't have to have a two-thirds vote, but it has to have enough Democrats that it shows it really is bipartisan."

The measure, which will be marked up in full committee Thursday, continues to pick up support, with 130 official co-sponsors listed yesterday. That tally includes 15 Democrats, some from the conservative Democratic Blue Dog Coalition, whose 15 members signaled in a statement last week they'll back the measure.

Committee members are slated to give opening statements on the export bill and a sweeping energy package, the "North American Energy Security and Infrastructure Act of 2015," starting tomorrow. Votes on both pieces of legislation are scheduled for Thursday, the committee said in a memo yesterday.

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Rep. Henry Cuellar (D-Texas), whose district includes a large portion of the Eagle Ford Shale play, told attendees at an Energy Allies breakfast last week that he and Continental Resources Inc. founder Harold Hamm convinced a majority of the members of the Blue Dog Coalition to support Barton's bill during a presentation the week prior. Cuellar expressed optimism that he would bring more Democrats on board and the legislation would be headed to the president's desk by the year's end.

Barton on Friday said he's having discussions with Democrats about the bill but reiterated his opposition to changes that would hand federal bureaucrats powers over exports.

"As long as you don't mess with the fundamental market principle -- we have no restrictions on refined products, refiners can sell to who they want, as much as they want, when they want," he said. "Give the producers the same right to sell the crude product, then the market will work. So that's sacrosanct. But some of these other issues that they're raising, there is middle ground, or at least there could be middle ground. Real legislating is finding that sweet spot where both sides get something that they want. And I think we can do that on this bill."

George Baker, executive director of Producers for American Crude Oil Exports (PACE), said yesterday that lawmakers should support ending the ban on the merits.

"We think that the enormity of the benefits all by themselves create a compelling case for doing this, in terms of the GDP development, the economics, the jobs, the national security implications, we think those all make the case quite compellingly without any further political logrolling," he said.

But he added, "That said, it is commonplace for people to try and pair things up within their own particular agendas, that people might raise those issues at this point in time. Seeing that the oil export thing is gathering momentum isn't a surprise at all, it's not a surprise at all. It's to be expected. But we haven't seen proposals that are seriously proposed at this time."

'A mix of views'

But what exactly Democrats want in exchange for allowing crude exports isn't entirely clear.

Senate Minority Leader Harry Reid (D-Nev.) recently suggested he would be willing to discuss exports if tax credits for renewables are part of the talks -- echoing a view expressed by more junior members of his caucus (Greenwire, Aug. 25).

Senate Minority Whip Dick Durbin (D-Ill.) has also signaled a receptiveness to allowing some exports but is hesitant about lifting the ban entirely.

Rep. Frank Pallone (D-N.J.), the ranking member of the Energy and Commerce Committee, has also shown a willingness to look at ending the ban, although he told E&E Daily last week that this week's expected full committee markup is premature.

"I just think we need more time on this," he said.

During last week's House subcommittee markup of Barton's bill, Democrats complained about the potential effect on domestic refiners (Greenwire, Sept. 10).

One such Democrat -- Texas Rep. Gene Green -- continues to work on changes that would address his concerns about refiners, a spokeswoman said Friday.

An industry official opposed to exports said the "mix of views" from Democrats on what such a deal might contain stems from the fact they've been preoccupied with other matters and have only recently turned attention to the issue.

"I don't think that there's any consensus," the observer said. "I think some people are talking to the other side and seeing what in theory they could get for something like this."

But given their adversarial relationship with the oil industry, it's unlikely Democrats will sign off on exports without expecting a substantive policy win for themselves, the source added.

Noting his close relationship with Democrats and Energy and Commerce Chairman Fred Upton (R-Mich.) and Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.), Barton said there's "frank back and forth" going on now.

"And again, if both sides get something, then you get bills the president signs and become permanent law and stays permanent law," Barton said. "And that's our goal. We want to repeal this ban with a permanent law change that sticks."

Enviros gearing up for battle

But while lawmakers insist that a deal appears within reach, environmental groups say a majority of Democrats won't back a bill that would permanently lift the ban on exports in exchange for a temporary extension of tax credits for wind or solar.

"For many of the folks that we work with it's definitely a nonstarter," said Lena Moffitt, director of the Sierra Club's Dirty Fuels Campaign. "We're definitely not ready to talk about a deal."

Stephen Kretzmann, the executive director of Oil Change International, said lifting the ban would increase fossil fuel production and drive up carbon emissions. Without a ban in place, domestic oil production would spike by 436,000 barrels of oil per day and generate more than 4 billion tons of carbon emissions, according to a study the environmental group released last year before oil prices dropped.

Green groups "are almost certain to oppose any deal," Kretzmann said. "At the end of the day, we see anything that expands oil production as a bad move."

Others said they haven't started mobilizing opposition to the industry-led campaign for lifting the ban because the effort is likely to die in the Senate, where Republicans need six Democrats to back an exports bill.

"The likelihood of this passing is not high," said Tyson Slocum, the director of Public Citizen's energy program. "People don't see the need to horse trade right now on something that they don't think is going to move" in the Senate.

Still, Slocum acknowledged that export ban opponents could wind up tucking language lifting the ban into a bill such as the sweeping energy package moving through both chambers this fall.

"The more likely situation particularly in the Senate is attaching some form of modification or elimination of the oil export ban to a broader piece of energy legislation," Slocum said.

Twitter: @geofkossEmail: gkoss@eenews.net

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