Senate Report Calls for President Obama to Lift Crude Oil Export Ban

Senator Lisa Murkowski

Senator Lisa Murkowski, R-Ala., released a report on June 9 advocating for the end of the crude oil export ban. She is the chairperson of the Senate Committee on Energy and Natural Resources.

The report—titled “Rendering Vital Assistance: Allowing Oil Shipments to U.S. Allies“—called for President Barack Obama to end the ban as well as provide oil for allies, such as South Korea, Poland and Japan. As a result, these countries would not depend oil coming from Russia or Iran:

Many U.S. allies and trading partners are interested in purchasing American oil to diversify away from Russia, Iran and other problematic sources. Allowing such shipments would send a powerful signal of support and reliability at a time of heightened geopolitical tensions in much of the world. The mere option to purchase U.S. oil would enhance the energy security of countries such as Poland, Belgium, the Netherlands, India, Japan, and South Korea, even if physical shipments did not occur.

The crude oil export ban was first implemented on Dec. 22, 1975, through the Energy Policy and Conservation Act in response to the 1973 OPEC oil shock. Then-President Gerald Ford signed the legislation into law and said “the long debate over national energy policy” was over.

Currently, the U.S. provides an exemption to Canada over crude oil exports and operates an exchange program with Mexico. It additionally exports crude oil to Israel, as part of an agreement, in case the latter suffers from a shortage.

As noted in the report, “the Obama administration renewed the agreement following a bipartisan letter led by Senators Lisa Murkowski and Mark Warner, D-Va., sent in April 2015, encouraging the Department of State to expedite its renewal.”

Murkowski, after taking over as leader of the Senate energy committee, immediately vowed to lift the crude oil export ban. She introduced, on May 12, S.1312 in the Senate energy committee, which intends to end the ban.

At the CERAWeek conference this year, which brings together oil and gas industry leaders and government officials in Houston, Murkowski told an audience it was “time to lift America’s ban on domestic oil exports.” She referred to the P5+1-Iran negotiations as a reason why the ban would need to be repealed.

“We should not lift sanctions on Iranian oil while keeping sanctions on American oil. It makes no sense,” Murkowski said.

Moreover, Murkowski co-authored a piece with Senator John McCain, R-Ariz., and Senator Bob Corker, R-Tenn., for Foreign Policy where they argued allies of the U.S. need crude oil for security:

The benefits to global security of allowing oil shipments to our trading partners are obvious and indisputable. Our friends in Asia, eager to comply with Western sanctions against Iran, would have a new alternative source for their energy needs.

Senator Maria Cantwell, D-Wash., who also sits on the energy committee, was cautious about an end to the ban. Cantwell wanted to know what impact such a change would have for U.S. consumers:

The information we have thus far is inconclusive to how lifting the ban on oil exports may impact consumers – especially those in the Pacific Northwest, who experience some of the highest gasoline prices in the nation,

Jesse Coleman, a researcher for Greenpeace, told Firedoglake the recent oversupply was a reason why such calls to lift the crude oil export ban are happening.

“These oil companies are being caught, as the industry have been caught many times in the past, with a massive oversupply. So they want to overturn the oil export ban,” Coleman said.

Coleman additionally criticized the rhetoric used against Russia despite firms working with the country.

“They say it will stop Vladimir Putin and these companies are working with Russian companies,” Coleman said.

In early 2014, the President Obama signed a series of executive orders barring companies from working with Russia including oil. Although, ExxonMobil, in the same year, was able to work with the Russian government to drill in the Arctic. Still, most companies are unable to work with the Russian government due to sanctions.

The call to end the crude oil export ban is not new. The American Petroleum Institute, a trade association representing more than 600 U.S. oil and gas companies, advocates an end to the ban.

John Felmy, API’s chief economist, cited restrictions to fossil fuel growth as stopping the U.S. from growing as an “energy leader:

Unfortunately, there’s a limit to how much we can grow as an energy superpower if U.S. oil and natural gas producers aren’t able to access the global market. We have every reason to protect and accelerate America’s growth by lifting outdated export restrictions,

Even Secretary of Energy Ernest Moniz said, in December 2013, there were issues “that deserve some new analysis and examination in the context of what is now an energy world that is no longer like the 1970s.”

Recently, a report by Bank of America-Merrill Lynch Global Research found a “surprising amount of support” from Congress to remove the export ban. In fact, the authors of the report believe there is a 50 percent chance the ban will be repealed in the next two years.

Jared Margolis, staff attorney at the Center for Biological Diversity, told Firedoglake, if such a law was passed, calls for more trains and pipelines to carry the crude oil would increase.

“There’s going to be a push for more crude oil trains, certainly. There’s going to be a push for more pipelines,” Margolis said.

A major concern, in regards to trains, is use of “bomb trains,” which can explode because of numerous factors including the volatility of the crude oil.

While crude oil is transported mostly through pipelines, trains are becoming a more cheaper, popular option. The New York Times highlighted last year how such “a business was nearly nonexistent” six years ago.

In recent years, there have been more accidents involving such trains and Margolis said it will grow if the crude oil export ban is lifted.

“[You’ll have] increased rail traffic and, as a result of that, you’ll have more rail accidents,” Margolis said.

Murkowski, in all of her speeches, reports and writings on crude oil, does not address the impacts of oil-by-trains. Although, in the Foreign Policy article, she noted, along with McCain and Corker, “any environmental impact [because of crude oil production] would also be negligible, as American oil is produced under some of the strictest safeguards on the planet.”

Coleman said to Firedoglake the amount of land sacrificed for crude oil was “mind-blowing.”

“You don’t have to look after 2010 with the BP oil spill to be aware of crude oil spills. That’s just one instance,” Coleman said.

BP released a report last week showing how the U.S. replacing Russia as the world leader in oil and gas exploration. Most of this is light, sweet crude oil.

Margolis authored a report in early February on the environmental consequences of oil trains and the lack of serious government effort to regulate “bomb trains.”

“Economics drives regulations a lot of time. The concern is that these agencies tend to be captured a lot of times,” Margolis said.

The report by Margolis also cites risks associated with light crude oil produced in Bakken region of North Dakota, where it is “generally more explosive, more toxic and can penetrate soils more quickly and deeply than traditional crude.”

As Margolis stressed, all fossil fuels like crude oil are best left alone because of climate change.

“From top of the bottom, these are what we call extreme fossil fuels. If we want to prevent climate change, we need to keep this stuff in the ground,” Margolis said.

Image from United States Congress and as such is in the public domain.