US House backs lifting crude export restrictions
OREANDA-NEWS. October 12, 2015. The US House of Representatives today approved a bill that would lift a 40-year-old restriction on exporting crude. But the measure fell short of the 290 votes needed to overcome a likely veto from President Barack Obama.
The Republican-led House approved the bill in a 261-159 vote, joined by 26 Democrats. The bill, sponsored by representative Joe Barton (R-Texas), would repeal export restrictions that had been largely symbolic until the recent boom in shale drilling produced large amounts of light crude that some US refineries are not well equipped to process.
US crude production since 2008 has increased by nearly 90pc, reaching 9.4mn b/d over the first half of this year, according to the US Energy Information Agency. Republicans want to allow producers to sell some of this production on world markets where prices are typically higher, which they say would reduce US gasoline prices that track the Brent world benchmark.
"Study after study has confirmed the jobs, fuel savings and economic growth that free trade in oil could bring to US consumers and workers," API president Jack Gerard said today. The group has pushed heavily to repeal the export restrictions, which Congress imposed in 1975 in the wake of the Arab oil embargo.
Legislative action on crude exports now shifts to the US Senate, where the Republican majority will need the support of at least six Democrats to get the 60 votes needed to avoid a filibuster. Democratic leaders in the Senate have suggested they might support the bill in exchange for extending renewable energy tax credits, a deal many Republicans would be reluctant to embrace.
Even if such a deal occurred, the White House this week said the bill was "not needed at this time" and threatened that Obama would veto the bill if it passed in Congress. Overcoming this veto would require 290 votes in the House and 67 votes in the US Senate.
Democratic lawmakers argued on the House floor today that while the bill might boost profits for oil companies, it could hurt US refineries that benefit from cheap crude and increase US gasoline prices. The bill would be a "bonanza for the oil companies but without any benefits for consumers," representative Frank Pallone (D-New Jersey) said today.
Today the House approved by voice votes amendments from Democrats that would require the US government to further study various effects of allowing crude exports. The House today also agreed to require the US Energy Department to submit a cost-benefit analysis on the benefits of imposing a carbon tax on fossil fuels that would then support renewable energy.
The House rejected an amendment trying to remove \\$2mn/yr in additional payments to each ship participating in the Maritime Security Program, which now pays 60 US-flagged vessels \\$3mn/yr to be available during times of war. The conservative group Heritage Action said this last-minute addition to the crude export bill was a "\\$500mn labor union buyout."