Murkowski, others push to end oil export ban

Daily News Washington BureauJanuary 7, 2014 

— The push to end the ban on exporting U.S. crude oil to foreign nations is at a level not seen in decades, with the top Republican on the Senate Energy Committee joining the call Tuesday.

Alaska Sen. Lisa Murkowski argued that the ban, put in place after the 1970s Arab oil embargo, doesn’t makes sense given the current U.S. oil production boom. Her endorsement follows comments by Obama’s secretary of energy that the ban should be reconsidered, and a pledge by the oil industry’s main lobbying group to press Congress and the president on the issue.

“We need to be looking at it now,” Murkowski said following an address at the Brookings Institution research center in Washington, D.C. “I want to move this conversation and I want to move it aggressively.”

But lifting the ban on selling America’s oil to foreign nations is controversial. Congress meant the ban to protect American consumers from gasoline shortages and price spikes, and some lawmakers say it’s still needed.

“Easing this ban might be a win for Big Oil, but it would hurt American consumers,” New Jersey Democratic Sen. Robert Menendez said in a recent letter urging the president to keep the export ban in place.

Menendez said exporting oil could raise the energy prices for American consumers by wiping out the difference between U.S. and global oil prices. The benchmark world price of oil, known as the Brent crude price, is about $108 a barrel while the West Texas Intermediate price stands more than $10 less.

But Murkowski said in her Brookings Institution address that lifting the ban would boost American oil production and wouldn’t cause U.S. energy prices to rise.

“The entry of this oil onto global markets will put downward pressure on international prices,” she said. “All things equal, this combination will help the American consumer.”

She said the oil production boom in North Dakota and Texas is leading to a glut of light, sweet crude, while the nation’s main refinery capacity on the Gulf coast is mostly geared toward handling heavier grades of oil. Murkowski suggested this glut could dampen U.S. oil production, with impacts on price and jobs, unless the industry could sell it to foreign markets.

There already are exceptions to the export ban. Some American oil goes to Canada, and oil can be exported from Murkowski’s home state of Alaska. But there is more than enough demand for Alaskan oil on the West Coast and none of it has been exported since 2004, according to federal energy statistics.

America increasingly exports refined petroleum products, especially diesel and heating fuel but also gasoline.

The crude oil ban is especially sensitive politically, though. And some oil-refining companies want the crude to stay in the United States, putting them at odds with oil producers that want access to lucrative foreign markets.

Given that it’s an election year, Murkowski said there’s likely little Congress would do to lift the export ban. So she called on the president to do so, saying he has the authority to act on it without Congress.

U.S. Energy Secretary Ernest Moniz, a member of Obama’s cabinet, suggested last month at a forum in New York sponsored by the Platts Energy news service that it could be time to reconsider the export ban, given America’s boom in oil production.

Senate Energy Committee Chair Ron Wyden, an Oregon Democrat, is interested in holding a hearing in the next few weeks on the issue, according to his spokesman. But Wyden is cautious about lifting the ban and wants to explore what it could mean for consumers.

“There may be a time when crude oil exports are appropriate, but is now that time?” said Wyden spokesman Keith Chu. “The U.S. is still importing about half our oil, including from some places that don’t always have America’s best interest in mind.”

Wyden, though, is expected to soon leave his energy committee post to take over the Senate Finance Committee. Democratic Sen. Mary Landrieu, from the oil state of Louisiana, is poised to take his place and is receptive to ending the ban on exports.

Alaska Sen. Mark Begich is another oil state Democrat who wants the ban reconsidered. Begich said it makes sense to lift the ban, so long as enough crude remains to ensure affordable gasoline in the United States.

“This could help stimulate America’s oil industry and create American jobs here at home,” he said in an email.

 

Email: scockerham@mcclatchydc.com; Twitter: @seancockerham

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