NEW YORK: U.S. oil industry lobbyists and Congressional supporters of lifting the U.S. ban on oil exports hope they can gain more support as lawmakers debate whether to approve the Obama administration’s nuclear deal with Iran, which would result in more Iranian oil on world markets.
Supporters of lifting the 40-year-old ban argue that U.S. oil producers should be able to export if Iranian producers are allowed to under an international agreement easing sanctions on Iran in exchange for limits on its nuclear development program.
The argument is giving the U.S. oil export push momentum, advocates say. Surprise comments made last week by two senior Democrats suggesting room for compromise on opening domestic oil exports raised hopes that some senators who have yet to take a position could eventually back such legislation.
U.S. oil producers and lawmakers from producing states have been pushing for Congress to lift the ban on U.S. exports enacted during oil shortages of the 1970s. Lifting the ban is opposed by refiners who benefit from it, and some consumer groups who worry about higher fuel prices.
Senate Minority Leader Harry Reid told Politico last week he has not decided about whether to support lifting the ban on U.S. exports, but said lawmakers “have to work out some sort of compromise.”
Senator Bob Menendez, a vocal opponent of lifting the ban, acknowledged the possibility of limited exports during his speech rejecting the Iran deal. He said the U.S. should consider opening some exports to allied countries “struggling with supply” if the Iran nuclear deal is blocked and that country’s oil remains off the market.
“After pushing to lift the ban for more than a year, it’s encouraging to see such progress,” said Senator Heidi Heitkamp, a Democrat from North Dakota, a major oil producing state.
She said while support for lifting the ban had already been growing, the focus on the Iran deal puts into stark relief why “it doesn’t make any sense to weigh lifting sanctions on Iran while we keep them imposed on ourselves.”
The House of Representatives is expected to vote this fall on its version of a bill lifting the crude export ban.
The path forward in the Senate is more complicated. Republican Senator Lisa Murkowski of Alaska and Heitkamp have been trying to find time for debate in a crowded Senate schedule and build support from Democrats wary of crossing the interests of independent refinery workers. Their industry has profited from the crude export ban because they have access to domestic crude and are allowed to export refined products.
Murkowski and Heitkamp failed in an attempt in May to add an export amendment to a Senate bill to review any deal with Iran over its nuclear program.
George Baker, executive director of PACE, a lobby group representing oil producers, said the issue has gathered support beyond the oil patch states faster than the industry expected. He said more states are concerned U.S. energy companies will be at a disadvantage if Iran can access world oil markets and theirs cannot.
But some groups worry the entanglement of the Iran deal and the crude export debate will be detrimental to U.S. consumers.
Allied Progress, a grassroots group, launched an ad in Menendez’ home-state of New Jersey accusing him on shifting his stance. Loosening the ban on U.S. exports would increase gasoline prices, it said.
“This isn’t a bargaining chip for a game of congressional legislative poker,” said Allied Progress head Karl Frisch.
A Menendez spokeswoman said he still does not support lifting the ban and was only referring to export exemptions allowed under U.S. law.
