Bill to repeal US crude export limits passes Senate energy committee
Washington (Platts)--30Jul2015/511 pm EDT/2111 GMT
The US Senate Energy and Natural Resources Committee passed Thursday,
in a 12-10 vote, a bill to repeal long-standing limits on US crude
exports, setting up a possible full Senate vote on the export policy
this fall.
Thursday's passage increases the likelihood that the roughly 40-year-old
restrictions on US crude exports could be repealed this year, if both
the full House of Representatives and Senate approve legislation to do
so and President Barack Obama signs it into law.
Still, that likelihood remains clouded by opposition from some Democrats
and environmental interests who oppose giving US oil producers
unfettered access to the world market. Every Democrat on the committee
voted against the bill.
The bill, the Offshore Production and Energy National Security Act, was
introduced last week by Senator Lisa Murkowski, an Alaska Republican and
the committee's chairwoman. The bill would repeal all limits on US crude
exports, but also calls for new lease sales in the eastern Gulf of
Mexico, drilling off the coasts of Virginia, Georgia and the Carolinas,
and more drilling offshore Alaska.
The bill also includes new revenue-sharing provisions, granting some
states 37.5% of the proceeds from production off their coasts, and the
creation of a new fund, paid for through offshore drilling proceeds, to
address climate change and fund infrastructure efforts by Native
American tribes.
The bill faced opposition from committee Democrats and Senator Angus
King, a Maine independent, who criticized it for promoting the
production of fossil fuels while doing nothing for renewable energy
sources.
The bill is "totally unbalanced," said King, who called the bill the "No
Fossil Fuel Left Behind Act."
The bill is "a massive giveaway to Big Oil," said Jacqueline Savitz, a
vice president with Oceana, one of the several environmental groups who
criticized Murkowski's bill Thursday.
In a statement, Jay Hauck, a spokesman for Consumers and Refiners United
for Domestic Energy, a lobbying group fighting a change to current
export policy, said the bill would "reverse" US energy independence
efforts and cause gasoline prices to rise. Supporters of an end to crude
limits have long disputed the impact of exports on gasoline prices and
several studies have claimed a policy change could, in fact, cause
gasoline prices to drop.
Senator Joe Manchin, a West Virginia Democrat, included an amendment to
the bill which would allow the US president to put export limits back in
place if gasoline prices increase. The president has such authority now,
but Manchin wanted explicit language in the bill on this, according to
Senate staff. Manchin ended up voting against Murkowski's bill due to
the revenue sharing provisions in the bill.
Hauck's group represents four, independent refiners: Philadelphia Energy
Solutions, Alon USA Energy, PBF Energy and Monroe Energy. Most refiners
have not fought an export change publicly, but the American Fuel and
Petrochemical Manufacturers, the industry's main trade group, has said
any change in export policy should be coupled with changes to other
policies, including the Jones Act and the Renewable Fuel Standard.
Other oil industry groups, including the American Petroleum
Institute, praised Murkowski's bill Thursday.
The bill's committee passage Thursday follows comments Wednesday from
House Speaker John Boehner, an Ohio Republican, backing an end to crude
exports and increasing the likelihood on a House vote on crude exports
this fall.
The House would most likely vote on a bill from Representative Joe
Barton, a Texas Republican, to end the crude export limits. But the
House Energy and Commerce Committee has not voted on the bill.
The Obama administration has indicated they will not move to change
crude export policy before Obama's term ends in January 2017, leaving
any possible change to Congress.
--Brian Scheid,
brian.scheid@platts.com
--Edited by Valarie Jackson,
valarie.jackson@platts.com
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