Representative Joe Barton (R-Tex) introduced a bill yesterday that would remove restrictions on crude oil exports from the United States.
The bill plans to “remove all restrictions on the export of crude oil, which will provide domestic economic benefits, enhanced energy security, and flexibility in foreign diplomacy,” according to the bill’s text.
“The shale revolution has drastically reshaped America’s energy landscape, unlocking a vast supply of untapped oil and gas. In order to take full advantage of this opportunity, we need to rethink outdated laws that were passed during an era of energy scarcity,” said Rep. Barton.
Lawmakers are set to hold a hearing on the bill this Thursday at an Energy and Power Subcommittee hearing entitled: “The Energy Policy and Conservation Act of 1975: Are We Positioning America for Success in an Era of Energy Abundance?”
Falling Oil Prices Bring the Issue back to the Forefront
The steep decline in oil prices “will weigh into the debate” and help make the case to lift the export ban, said Senator Lisa Murkowski, the Alaska Republican set to take over as head of the Energy and Natural Resources Committee next year, reports Bloomberg.
With prices down over 40% since June and production at record highs, many U.S. producers are looking to expose their oil to new markets. Since many U.S. refineries are equipped for heavier crude, instead of the light sweet that comes from shale formations, opening up the export market would give producers access to more customers.
“This is a global competition for market share,” said Erik Milito, upstream policy director for the American Petroleum Institute. “These other regions around the world want to raise the competitive pressure on U.S. energy and we’re asking our policymakers to at least put the U.S. on a level playing field.”
Many, including U.S. Energy Secretary Ernest Moniz, believe it’s time to take another look at the nearly 40-year-old legislation that puts restrictions on the export of crude oil. “The international energy markets clearly look very, very different from what they looked like in 1975,” he said. “It’s worth a re-examination.”
While there continues to be a push on Capitol Hill, and from U.S. producers, to end the ban, not everyone is so excited to see export restrictions lifted. Some refiners are trying to keep the ban in place, reports Bloomberg. The refineries have benefitted from dropping crude prices in recent months, and opening the borders for exports would increase the domestic price and simultaneously impact margins on the downstream segment.
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