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Senate Republicans, eager to pass legislation that would lift the 40-year-old ban on virtually all exports of U.S. crude oil, repeatedly tried to persuade Energy Secretary Ernest Moniz to declare his support for such a bill, which President Obama opposes. Their effort was in vain.
During a hearing of the Senate Energy and Natural Resources Committee on Oct. 6, Moniz repeatedly told the lawmakers that his department wasn’t responsible for such a policy, and referred them instead to the Commerce Department, which handles such matters.
One member of the committee, Republican Sen. John Barrasso of Wyoming, asked the secretary, “Do you agree that U.S. crude oil exports would benefit the energy security of our allies and trading partners?” At another point he added, “Does the Obama administration oppose all legislative efforts to repeal this crude oil ban?”
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To both these questions, Moniz replied that the responsibility for addressing an export ban lay with Commerce. But he also said lifting the ban wouldn’t dramatically reduce the price of fuel in the United States, as Republicans have argued, and that the country still doesn’t produce enough oil to be energy self-sufficient.
“We are a 7 million barrel-a-day importer of crude oil,” the secretary said, and added, “[R]ecent studies, including the last summary study of the [Energy Information Administration] … , show that the impacts [on the price of fuel] for the next 10 years or so are likely to be pretty modest, to put it mildly, in terms of exports.”
The crude export ban was imposed in 1975 to help ensure American energy security after the Arab oil embargo, which halted the flow of Middle Eastern oil to the United States because of its support of Israel during the 1973 Yom Kippur War.
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The House is scheduled to vote Oct. 9 on lifting the ban, with Senate action expected by year’s end.
Republicans argue that ending the ban would create jobs in the energy and related industries. Most Democrats, including Obama, oppose the idea, saying it could actually increase gasoline prices and thereby harm the nation’s economy, which only now is emerging from the recession that began in 2008.
Further, Democrats argue, exporting crude oil means it would be refined overseas, often in countries that have lax environmental regulations. They say this would mean a likely global increase in greenhouse gas emissions.
Meanwhile, a study by the non-partisan Congressional Budget Office concluded that resuming crude exports probably would increase oil prices, but also would increase U.S. government revenue because Washington would be selling more oil and gas leases.
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Crude oil aside, Moniz told the committee that the export of processed or refined oil products, such as gas and diesel fuel, has increased significantly in the past 10 years. “U.S. exports of non-crude petroleum products from the United States averaged a record 3.8 million barrels per day in 2014, a nearly fourfold increase over the last decade,” he said.
The U.S. Bureau of Industry and Security, a division of the Commerce Department, has also authorized exports of so-called condensate, an especially light form of oil found in shale deposits. The White House says this move doesn’t mean the Obama administration has altered its position on the ban on crude exports.
By Andy Tully of Oilprice.com
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Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com