The US House of Representatives has passed legislation on Friday (9 October 2015) that seeks to lift the ban on US crude oil exports. The measure passed by a vote of 261-159.
The bill introduced by Texas republican Joe Barton (pictured) seeks to overturn a 40-year-old ban on exports, which proponents of the bill say would create jobs and lower gasoline prices. An IHS study from earlier this year said that lifting the ban could add nearly 400,000 jobs, and generate US$86 billion more per year in GDP on average from 2016-2030.
“This is not an oil patch issue. This is an American issue,” Barton said following the bill’s passage in the House. “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.”
The Obama administration has opposed lifting the ban. In September, press secretary Josh Earnest said: “[The administration] wouldn’t support legislation like the one that’s been put forward by Republicans.” It is likely that if the bill were to pass the senate, Obama would veto.
US Senator for Alaska, Lisa Murkowski, also applauded the bill’s passing. “House approval of legislation to lift the ban on crude oil exports is great news. It sends a strong signal that Congress will lead where the administration has failed. It is unfortunate that the White House wants to ignore broad bipartisan support for increasing exports of American energy to our friends and allies,” Murkowski said. “It defies logic that this administration wants to lift sanctions on Iran while keeping de facto sanctions in place on the United States.”
Industry associations have also cheered the bill’s passing.
The IADC (International Association of Drilling Contractors) said the bill would bolster growth for domestically produced oil and facilitate job creation.
“Today’s vote to repeal the outdated ban on exporting crude oil is a win for the US economy, particularly due to the huge implications for the creation of new jobs. From the perspective of the drilling contractor community, this is an enormous benefit to our members,” said Stephen Colville, IADC President and CEO. “According to recent studies, lifting the ban would result in an average of 124,000 new jobs in the supply chain, contributing to 394,000 jobs in the greater economy through 2030. Particularly during a time of market uncertainty in the oil and gas industry, these job numbers are big, and meaningful. Combined with the expected addition of $26 billion to the GDP per year from the crude oil supply chain, these numbers clearly provided a deeply compelling case for the US House to vote to lift the ban, and we support their efforts.”
API (American Petroleum Institute) President and CEO Jack Gerard praised efforts to pass the bill.
"Today's vote starts us down the path to a new era of energy security, saving consumers billions and creating jobs across the country," Gerard said. "American producers would be able to compete on a level playing field with countries like Iran and Russia, providing security to our allies and accelerating the energy revolution that has revitalized our economy.
"Study after study has confirmed the jobs, fuel savings, and economic growth that free trade in oil could bring to US consumers and workers. As the US Energy Information Administration reported, lifting the ban could increase the value of US crude and incentivize domestic production, which puts downward pressure on global oil prices and the prices that consumers pay for fuel.
"Lawmakers are ready to harness those benefits, and today's vote shows that bipartisan momentum is stronger than ever. We are eager to see this bill taken up in the Senate, where members of two committees have already endorsed efforts to lift the 1970s-era ban on crude exports. The time to act is now,” he concluded.
Back in April, Ryan Lance, chairman and chief executive of ConocoPhillips – one company rallying for the export ban to be lifted – said at CERAWeek in Houston that the US should be allowed to export.
“We’ve shifted the oil market’s center to North America,” he said at the time. As a result, the US should be allowed to export light oil and import heavy oil to balance the nation’s energy needs while serving the needed product slate of US refineries.