In a move considered unthinkable a few months ago, congressional leaders have agreed to lift the nation’s 40-year-old ban on exporting oil, a historic action that reflects political and economic shifts driven by a boom in U.S. oil drilling.
The Wall Street Journal reports the measure allowing oil exports is at the center of a deal that Republican leaders announced late Tuesday on spending and tax legislation. However, Democrats haven’t confirmed the agreement. Both the House and Senate still must pass it and President Barack Obama must sign it into law.
The deal would lift the ban, a priority for Republicans and the oil industry, and at the same time adopt environmental and renewable measures that Democrats sought. These measures include extending wind and solar tax credits, reauthorizing for three years a conservation fund and excluding any measures that block major Obama administration environmental regulations, according to a GOP aide.
President Barack Obama had threatened to veto separate legislation lifting the export ban, but the White House isn’t expected to oppose the overall spending bill simply because it includes the measure, according to congressional aides.
By design or not, the agreement hands the oil industry a long-sought victory within days of a major international climate deal that is aimed at sharply reducing emissions from oil and other fuels, a deal opposed by the industry and one that will arguably require its cooperation.
More than a dozen independent oil companies, including Continental Resources and ConocoPhillips, have been lobbying Congress to lift the ban on oil exports for nearly two years, arguing that unfettered oil exports would eliminate market distortions, stimulate the U.S. economy and boost national security.
Some U.S. refineries oppose oil exports, saying their business would be hit if crude oil is shipped overseas to be refined and warning that higher costs might be passed along to consumers. The U.S. government doesn’t limit exports of refined petroleum products, and those exports have more than doubled since 2007.
Congress moved to ban oil exports under most circumstances following a 1973 Arab oil embargo that sent domestic gasoline prices skyrocketing.
The Wall Street Journal has the full story. (Subscription may be required)
