[Updated] Senate Committee Lifts Crude Export Ban

oil tanker

Published Jul 30, 2015 7:03 PM by The Maritime Executive

The U.S. Senate Energy Committee narrowly passed a bill to lift a 40-year old ban on the export of crude oil, but the measure faces an uphill battle in getting passed by the full Senate.

The bill to allow the United States to export oil and boost state revenue-sharing for offshore oil and gas drilling passed along party lines by a vote of 12-10.

It was the second significant step in two days for advocates of lifting the ban: Republican House Speaker John Boehner announced his support on Wednesday for repealing the law.

But Congressional Democrats remain reluctant to reverse the ban, citing, among other things, a fear it would lead to higher gas prices. Democratic support is seen as crucial to getting President Barack Obama to sign any legislation permitting crude exports.

Senate Energy Committee Chair Lisa Murkowski, a Republican senator from Alaska, has been a long-time advocate for lifting the ban, which she said was outdated due to the U.S. drilling boom that has propelled the country to vie with Russia and Saudi Arabia as the world's biggest oil producer.

In addition to unlocking crude oil exports, Murkowski's bill would speed up exports of liquefied natural gas and ensure that states that have offshore oil and gas development get their share of federal revenues.

Combining the revenues measure with repeal of the exports ban was an attempt by Murkowski to gain more Democratic votes.

Murkowski and Democratic Senator Mark Warner, of Virginia, released a report on Wednesday called "Empowering America: How the energy abundance can strengthen U.S. global leadership" that recommending lifting the ban, to allow the drilling boom to be an asset in foreign policy. 

It was the first public endorsement of the lifting of the ban by Warner, who is not on the energy committee. But Murkowski will need to win many more Democrats for the bill to have a chance of advancing.

The bill will move to the Senate floor for wider debate after the August break.

Industry groups welcomed the bill's passage and said it would be a boon to the U.S. economy and national security.

"Free trade in energy will allow America to harness the full economic opportunities created by our energy revolution," said the American Petroleum Institute's top lobbyist, Louis Finkel.

“The National Ocean Industries Association applauds the Senate Energy and Natural Resources Committee for passing the OPENS Act, which will strengthen America’s energy and national security, improve our national economy and benefit consumers across the country,” says NOIA President Randall Luthi.  

“Over 85 percent of our federal offshore acreage is off limits to oil and natural gas development. Opening access to these areas will result in hundreds of thousands of new American jobs, billions of dollars in new private investment and millions more barrels per day of oil and natural gas production, not to mention new revenue to the government. 

“Oil and natural gas are not just reliable and affordable sources of energy today, but are also predicted to still provide about 80 percent of the energy the world needs through 2040.  We could be a source of that energy, not only for the U.S., but for our allies around the world.”

The Senate energy committee also voted 18-4 to back a broader energy bill, which supports workforce training in the energy sector and streamlines permitting for natural gas pipelines.