OREANDA-NEWS. Congressional leaders have reached a bipartisan $1.1 trillion budget deal that would lift 40-year-old restrictions on US crude exports in exchange for a five-year extension of wind and solar energy tax credits.

The wide-ranging budget is designed to avert a shutdown of the federal government and set funding levels for federal agencies through September 2016.

Republican and Democratic leaders from both houses of Congress negotiated the deal in closed-door meetings over the past two weeks, with the goal of passing the two bills by 22 December. While party leaders may face opposition from within their ranks, the 2,009-page government funding bill and a second, 233-page measure designed to renew expiring tax credits are expected to pass.

The change in the crude export limits is the most contentious provision in the package. During the negotiations, Democrats used the issue to pressure Republicans to extend the renewable energy tax credits and block hundreds of environmental riders.

The budget deal, in a concession to refiners that complain lifting export restrictions will make them less competitive, provides US independent refiners with a tax deduction that will let them write off 75pc of their shipping costs. The sweetener could soften the impact of east coast refiners that face higher shipping expenses because of a requirement to use US-flagged ships when importing oil from US ports.

Wind and solar developers under the bill could see significant benefits. The deal extends until 2020 a federal production tax credit for wind, but the legislation would begin to phase out that provision. The wind credit would be cut by 20pc for facilities beginning construction in 2017, and then by a 40pc cut in 2018 and by 60pc in 2019. The deal also extends by five years and phases out a solar investment tax credit that was set to expire at the end of 2017.

Conservative groups and environmentalists are planning to fight the two bills, but party leaders likely have included enough provisions amenable to both sides to ensure both bills are approved.