WASHINGTON: With the stroke of a pen, United States President Barack Obama has ended 40 years of US crude oil export limits by signing off on a repeal passed by Congress earlier in the day.
The restrictions lift immediately under a provision in the spending and tax package that the President signed into law. Congressional leaders earlier in the week reached an agreement to end the trade restrictions, established during US oil shortages in the 1970s, as part of a grand bargain that includes tax breaks for renewable-energy companies and refiners.
“I don’t doubt you’ll see some exports next year,” ConocoPhillips chief executive officer Ryan Lance said in a telephone interview after the Senate vote. “We’re pretty excited about it, but we’ve also got to get the infrastructure” in place.
Repeal of the crude-export restrictions reverses four decades of a policy that has defined the nation’s relations with the rest of the world. Without the trade limits, the US — now the world’s largest oil and gas producer — is free to export its crude, as it already does with refined products including gasoline. The US Senate passed the bill with a vote of 65-33 after the House approved the measure 316-113 hours earlier.
Oil producers including ConocoPhillips and Continental Resources had lobbied in favour of repeal, which American Petroleum Institute president Jack Gerard described in a statement as ‘a historic moment in our energy renaissance’.
While the law allows these and other producers to ship their crude abroad, it may also lure investment to the US from foreign oil companies that want to be able to export oil for consumption in their home countries, according to Scot Anderson, global head of the energy natural resources group at law firm Hogan Lovells in Denver.
“I would suspect that it would make foreign direct investment into the US energy market more attractive,” he said in an interview. The firm represents producers, refiners and midstream companies.
Some independent refiners, such as PBF Energy, said they may be harmed by an end to the crude-export restrictions. The spending bill contains a tax deduction for those refiners to help blunt any potential negative impact on them. House Democratic leader Nancy Pelosi of California said that when Congress returns from its recess in January, she may seek to provide additional assistance to some mid-Atlantic refiners who could be excluded from the tax benefit. “That’s some unfinished business that we have to do,” she said at a press conference after Friday’s vote.
