Oil, gas industry urges lawmakers to lift crude exports ban

Fuel Fix – by Jennifer A. Dlouhy

WASHINGTON — The slumping oil prices that have prompted energy companies to lay down rigs and lay off workers hit domestic producers harder than their international counterparts because of the U.S. crude export ban, Pioneer Natural Resources CEO Scott Sheffield is expected to tell a House panel on Tuesday.

“Price cycles come with the territory, and we will navigate this downturn as we have in the past,” Sheffield says in prepared testimony filed with the House Energy and Power Subcommittee, ahead of a Tuesday afternoon hearing on “world energy markets.” “Producers of domestic oil are especially disadvantaged compared to foreign producers, however, because they cannot receive global prices.”  

Pioneer is just one of dozens of oil companies that are pressing the Obama administration and Congress to undo the 40-year-old ban on exporting raw, unprocessed crude. The trade restrictions do not extend to gasoline, diesel and other refined petroleum products, which can be freely exported.

While Tuesday afternoon’s hearing is not specifically focused on oil exports, it will provide a forum for the growing debate over whether the 1970s-era trade restrictions on selling crude overseas are outdated amid today’s surging domestic production.

Refiners who oppose loosening the ban insist it could give an unfair advantage to foreign competitors who do not have to comply with other laws, such as the Jones Act requirement to use U.S.-flagged crude tankers and other vessels when traveling between U.S. ports.

Graeme Burnett, a senior vice president for Delta Air Lines, which runs the Monroe Energy refinery in Trainer, Pa., is set to argue that undoing the ban would jeopardize both refineries and national security.

“Should Congress eliminate restrictions on crude oil exports, lawmakers risk not only hurting the U.S. consumer but also, and more importantly, endangering energy security,” he says in prepared testimony. “Energy security is not just about producing enough feedstock — that is, crude oil — for the nation’s needs, but also about maintaining the domestic capability to transform that feedstock into the products we consume here in America.”

Other witnesses include energy expert Amy Myers Jaffe, American Fuel and Petrochemical Manufacturers head Charles Drevna and Adam Sieminski, head of the government’s Energy Information Administration.

Oil interests were laying out their arguments hours before the hearing was set to begin. A coalition of oil industry trade groups, including the American Petroleum Institute and the Independent Petroleum Association of America, sent a letter to House energy panel leaders arguing that the United States should rewrite energy policy to match “an age of energy abundance.”

“The time has come to liberate America from the self-imposed and self-defeating constraints of the counter-productive oil export prohibition,” the groups say. “It is noteworthy that there is no ban on the export of refined petroleum products and indeed the US leads the world in the export of refined petroleum products.”

ConocoPhillips CEO Ryan Lance also made his case for oil exports during a speech at the Chamber of Commerce. “We shouldn’t put U.S. producers at a competitive disadvantage by limiting access to global markets,” he said.

http://fuelfix.com/blog/2015/03/03/oil-producers-make-pitch-to-congress/