The U.S. ban on exporting crude oil is drawing closer to repeal as part of a fiscal package currently being negotiated in Congress.
Momentum to lift the ban among Republicans has been building steadily over the past year and lawmakers are looking to make a deal as part of a spending and tax bill. Democrats are seeking long-term renewals of renewable energy tax credits — namely for wind and solar — or other green energy measures in return.
Lawmakers in both houses remain divided over the negotiations, The Hill reported, and the White House said back in September that it would not support efforts to lift the ban.
“It clearly is an item that [Senate Majority Leader Mitch] McConnell and Republicans are salivating over,” Senate Minority Whip Dick Durbin, D-Ill., told The Huffington Post. “It would be a windfall to the industry. We don’t know how much some have estimated — $20 [billion], $30 billion a year in profits if they are allowed to do this.”
The White House, meanwhile, remains in opposition.
“I’ve said that we’d take a look at what Republicans put forward,” White House Press Secretary Josh Earnest told The Hill, But our position on that particular policy proposal hasn’t changed.”
Arguments for and against repealing the ban range from economic to environmental. Opponents say exports have the potential to raise energy costs and harm the environment.
In an open letter sent to senators earlier this month, a coalition of environmental groups including the Sierra Club and the Natural Resources Defense Council outlined fears of stoking climate change and other hazards.
“It would incentivize a hazardous increase in oil production in the U.S., which would in turn mean more leaking pipelines, hazardous oil trains, and increased emissions wreaking havoc with our climate,” the letter read.
Advocates claim that gasoline might actually become cheaper if the ban were lifted and tout job creation benefits.
A report released by the U.S. Energy Information Administration in September analyzed the potential effects of removing restrictions on imports. Among other conclusions, the report said that “petroleum prices in the United States, including gasoline prices, would be either unchanged or slightly reduced by the removal of current restrictions on crude oil exports.”
The ban under discussion is limited to crude oil — exports of refined petroleum products including gasoline and diesel are not restricted in the same way — and the U.S. has become a substantial net exporter of such products. Energy interests are generally supportive of repealing the ban, with the exception of refiners who had benefitted from being able to buy cheap crude oil domestically and sell the refined product abroad at higher prices. Some lawmakers in Congress are looking to offer tax credits in an effort to offset projected profit losses for refiners.
All this comes as crude oil prices have fallen further in recent weeks, dipping last week to levels not seen since 2009 in the face of global oversupply.
Negotiations between the parties stalled on Tuesday as Senate Minority Leader Harry Reid, D., Nev., acknowledged on the Senate floor that Democrats were prepared to go forward with spending and tax bills that leave out the oil ban entirely if Republicans don’t agree to Democrats’ demands for renewable energy measures, the Wall Street Journal reported.
