U.S. House approves bill to lift oil exports ban

The United States House of Representatives on Friday passed a bill to lift the U.S. oil exports ban.

According to Energy and Power Subcommittee, the House Rule 702, which would remove restrictions on the export of crude oil from the United States, authored by Representative Joe Barton, was passed by a vote of 261 – 159.

The H.R. 702 would amend the Energy Policy and Conservation Act of 1975, which came as a U.S. response to increases in oil prices and massive gasoline shortages in the U.S. after OPEC imposed an oil embargo in retaliation for the United States support of Israel in the Arab-Israeli War in 1973.

Energy and Power Subcommittee Chairman, a Kentucky republican Ed Whitfield expressed his delight that bill passed the House saying the legislation would allow America to tap into its energy abundance and natural resources. He said it would put an end to the outdated restrictions on the export of American oil.

“I applaud Mr. Barton and the rest of our Energy and Power Subcommittee for all of their hard work on this legislation that will provide a major boost for jobs and the economy, and help keep gasoline affordable for everyone,” Whitfield said.

American issue

The bill’s sponsor, Representative Joe Barton said that the bill passing the House was not a regional issue or an oil patch issue, but it was an American issue.

Barton said: “America’s energy boom has sparked a jobs boom, but continued job growth is now in jeopardy without access to global markets. H.R. 702 presents a rare opportunity to help the economy at home, enhance our influence abroad, and strengthen our national defense, and all at no added cost to the American people and I’m glad it passed the House today.”

Energy and Commerce Committee Chairman Fred Upton, a republican from Michigan, concluded that lifting the crude oil export ban was a win for the U.S. economy.

Upton said: “It would lower prices at the pump, create jobs, generate hundreds of millions of dollars in economic benefits, and strengthen our geopolitical influence across the globe. It would also boost royalty payments from federal oil and gas leases, reducing the budget deficit by over a billion dollars. Collectively, all of these gains provide the makings of a success story that would greatly benefit our economy at a time of great uncertainty. After four decades, it’s time to lift the ban and say yes to energy.”

To remind, the White House last week said that if the President were presented with H.R. 702, his senior advisors would recommend that he veto the bill.

U.S. is world’s top oil importer

Speaking against lifting the ban, the Congresswoman Anna G. Eshoo from Democratic party, said that even during America’s current prolonged boom in domestic oil production, the U.S. still imported 26 percent of the oil it consumed and remained the world’s top importer. Eshoo said that every barrel exported under this bill would have to be replaced by a barrel imported from elsewhere, which would leave the U.S. more reliant on foreign countries.

“Given the continued dependence of our economy and our military on oil, energy independence remains critical to our national defense. But with little consideration of any national security implications, this bill allows unlimited exports of a critical strategic resource,” Eshoo said.

Saying that the bill permits no restrictions on exports of crude oil, Eshoo said that it meant strategic considerations such as decreasing U.S.’s reliance on imports from unfriendly regimes could play no part in deciding whether to allow exports.

She said: “By contrast, proposals to export liquefied natural gas must be reviewed by the Administration to ensure they are in the national security interests of the United States. Why shouldn’t crude oil exports be subject to the same national security analysis before they are approved?”

Eshoo said that under the legislation, Congress and the Administration had no input on where the oil would be exported to.

She said: “Supporters argue that lifting the export ban will allow U.S. oil to be exported to allies in Eastern Europe as a form of ‘energy diplomacy’.”

“The oil will be sold by private companies in the international market, and experts predict that most U.S. exports would be sent to Asia. Furthermore, the Congressional Research Service has found that Eastern Europe does not have the port infrastructure or refineries to handle U.S. crude. Those countries are better off importing refined U.S. products which is already permitted under current law.”

Giving an example of crude exports from Alaska that must be carried on U.S.-flagged vessels crewed by American citizens, Eshoo said that this bill contained no requirement that exports should be carried on U.S.-flagged tankers. “The Energy Information Administration found that many refineries on the East Coast would suffer if unfettered exports are allowed because U.S. crude will be exported and refined abroad,” Eshoo added.

Limited exports and swaps with Canada and Mexico

Eshoo concluded that under current law, the President could allow exports of crude oil should he find they were in the national interest.

“The Commerce Department recently used this authority to allow limited exports and swaps with Canada and Mexico. H.R. 702 would allow unlimited exports regardless of whether they are in the national security interests of the United States or not,” she said.

Also speaking out against the crude oil export bill was a democrat Frank Pallone, the U.S. Representative for New Jersey’s 6th congressional district, who said that the H.R. 702 was a poorly crafted bill that needlessly and recklessly swept away 40 years of critical energy protection from national security, U.S. economy, consumers and the environment.

Pallone said that the bill was a blunt object that didn’t only undermine current protective authorities related to crude oil, but it also prohibited any federal official from taking any action at any time if that action was needed.

“The bill does nothing to preserve any environment or safety statutes or regulations, and it doesn’t even preserve the defense production act to ensure national energy security in the face of a threat,” he added.

“The president already has the authority to ease or even remove restrictions on crude oil exports and the Obama Administration has taken major steps to exercise that authority by approving crude oil swap with Mexico,” Pallone said.

Another speaker against the bill, democrat Representative Lois Capps from California, said: “Today, the House is voting yet again to guarantee billions more in profits for oil companies rather than focusing on helping hard-working American families.”