Congress Kills US Oil Export Ban
WASHINGTON, Dec 18 (Reuters) - The U.S. Congress voted on Friday to repeal the 40-year-old ban on exporting U.S. crude oil in an energy policy shift sought by Republicans as part of a bipartisan deal that also provided unprecedented tax incentives for wind and solar power.
The Senate, on a 65-33 vote, passed a $1.1 trillion government spending bill that included the measure to lift the export ban and provide five-year extensions of tax breaks to boost development of renewable energy. Earlier in the day, the House of Representatives passed the measure, 316-113.
The legislation now goes to President Barack Obama, who was expected to sign it into law.
The deal was hammered out in secret talks among congressional leaders over two weeks.
Senators Lisa Murkowski, a Alaska Republican, and Democrats Heidi Heitkamp of North Dakota and Martin Heinrich of New Mexico had worked for more than a year to get the deal.
Democrats who backed the deal asserted that its provisions encouraging renewable energy were important for combating global climate change.
"This is the biggest deal for addressing climate change that we are going to see," Heinrich said in an interview.
Heinrich said Democrats may not have been able to get a better deal even if they controlled both chambers of Congress, now led by Republicans. Many Republicans have opposed Democratic proposals to address climate change.
Congress, concerned about U.S. dependence on imported oil, imposed the crude oil export ban after the Arab oil embargo of the early 1970s that sent gasoline prices soaring and contributed to runaway inflation. Arab members of the Organization of the Petroleum Exporting Countries (OPEC) imposed the embargo following the U.S. decision to re-supply the Israeli military during the 1973 Arab-Israeli war.
Drillers have said lifting the ban would increase U.S. oil security and give Washington's allies in Europe and Asia an alternative source of crude beyond OPEC and Russia. The bill could benefit oil companies including Exxon Mobil Corp, ConocoPhillips and Chevron.
Opponents of lifting the export ban said the action would harm the environment and could lead to an increase in fiery derailments of crude-carrying trains.
Oil Boom
Drillers said continuing the ban would choke a boom in shale oil production since 2008 particularly in North Dakota and Texas that has pushed domestic oil prices down from more than $100 a barrel to below $40.
Lifting the ban was "particularly important at a time when our industry is experiencing a period of extreme volatility and uncertainty," Ryan Lance, chairman and CEO of ConocoPhillips, said in a statement.
House Democratic leader Nancy Pelosi and some others in her party had expressed concern that allowing U.S. oil exports would hurt independent refiners by raising the price of domestic crude to international prices.
Tom O'Malley, executive chairman of refiner PBF Energy , said lifting the ban would lead at least one East Coast refinery to shut down, adding that his refineries in New Jersey and Delaware are less exposed.
"This is a crazy thing to do," O'Malley said. "Once you lift it, it's hard to reverse it."
Democrats in the Senate had secured some protections for independent refiners, allowing them to deduct transportation costs for gasoline and other fuels they make.
Pelosi on Friday said Democrats walked away with a victory, in the trade of oil exports for environmental goals.
She said the environmental damage from exporting oil would be offset by 10 times because of measures in the bill such as the renewable power tax credits, funding of a parks conservation fund paid for with oil revenues and the elimination of measures that would have dismantled Obama's clean power rules on power plants.
Due to a global glut in oil supplies, lifting the ban is not expected to lead to significant U.S. export shipments for months or even years, but it could give crude producers the increased flexibility they coveted.
"Now that we have leveled the playing field, the United States finally has an opportunity to compete and realize our nation's full potential as a global energy superpower," said George Baker, head of Producers for American Crude Oil Exports, a group that formed last year to press lawmakers to open the trade.
(Additional reporting by Richard Cowan and Anna Driver in Houston and Jarrett Renshaw in New York; Editing by Will Dunham)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- UK Oil Regulator Publishes New Emissions Reduction Plan
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- PetroChina Posts Higher Annual Profit on Higher Production
- McDermott Settles Reficar Dispute
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil Demand Outpaces Expectations, Testing Calculus on Peak Crude
- House Passes Protecting American Energy Production Act
- TotalEnergies Restarts Production in Denmark's Biggest Gas Field
- USA Oil and Gas Job Figures Jump
- Republican Lawmakers Say IEA Has Abandoned Energy Security Mission
- Blockchain Demands Attention in Oil and Gas
- Houthis Warn Saudi Arabia of Retaliation If It Backs USA Attacks
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Summer Pump Prices Set to Hit $4 a Gallon Just as Americans Hit the Road
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Equinor Makes Discovery in North Sea
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension