By threatening to veto a bill greenlighting oil exports, President Obama last week sent a powerful message to Congress and to the American public: The administration is unlikely to sign off on any measures expanding fossil fuel production and sales, even if those measures carry economic benefits for the U.S. and national security benefits for key allies around the world.
The House on Friday passed a bill that would lift the nation’s 40-year-old ban on crude oil exports, a policy put in place at a time when global shortages and the Arab oil embargo of the 1970s forced the U.S. to guard its own supply. With U.S. oil-and-gas production at an all-time high, the ban, from an economic and energy standpoint, makes little sense, supporters of reversing the policy argue.
With Friday’s vote, the House has set up a showdown with Mr. Obama on energy, pitting the White House’s climate change agenda against the bipartisan position that expanding U.S. oil-and-gas production, and allowing American fuel to be sold overseas, will benefit the nation.
Mr. Obama made clear in his veto threat that the administration will not go along with any legislation that furthers U.S. reliance on fossil fuels, and that stand comes despite the fact that the federal government’s own data have shown ending the oil export ban could lower domestic gas prices.
In addition, ending the ban undoubtedly would drive up domestic oil-and-gas production, something the administration acknowledges is a good thing for the nation.
“Domestic oil production has grown in recent years, strengthening our economy, supporting new American jobs, and enhancing our energy security. The administration has taken important steps to support safe and responsible production growth,” the White House said in a statement of administration policy, the vehicle typically used to deliver a formal veto threat.
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But the statement also explained why, despite the benefits of increased production, the House bill never will get Mr. Obama’s support.
“Legislation to remove crude export restrictions is not needed at this time,” the White House said. “Rather, Congress should be focusing its efforts on supporting our transition to a low-carbon economy. It could do this through a variety of measures, including ending the billions of dollars a year in federal subsidies provided to oil companies and instead investing in wind, solar, energy efficiency, and other clean technologies to meet America’s energy needs.”
The issue of oil exports has, to some degree, divided the Democratic Party. The House measure passed by a vote of 261 to 159, with support from 26 Democrats. A handful of Democrats in the Senate also are among the strongest proponents of lifting the ban.
They, along with other supporters, point to a host of benefits, including federal data showing how allowing oil exports will help American consumers.
A report from the Energy Information Administration earlier this year said that ending the ban could lower gasoline prices across the country. Congressional Budget Office research makes the same case.
The Government Accountability Office also compiled research and interviewed stakeholders last year and reached the same conclusion.
“Estimates of the consumer fuel price implications ranged from a decrease of 1.5 to 13 cents per gallon,” the study said.
Because of those potential benefits, support for lifting the ban continues to grow. Top business groups, along with powerful lawmakers of both parties, are putting new pressure on the White House to reverse its position, despite how unlikely such a reversal seems right now.
“The crude oil export ban is now proactively working against our nation’s interests economically at home and strategically in aiding our allies overseas. We are now one step closer to overturning this outdated ban, and I will continue to work with my colleagues in the Senate to make this a reality,” Sen. James M. Inhofe, Oklahoma Republican and chairman of the Senate Committee on Environment and Public Works, said last week as the fight over exports moves to his chamber.
Oil-and-gas industry leaders long have highlighted the economic benefits of removing the ban, but they also are turning their attention to how a change in policy will aid America’s allies.
“Given the increased security threats facing the U.S. and our allies, it’s time to leverage our abundant energy resources here at home in support of our security interests around the world. Lifting the trade restrictions on oil exports would give America greater foreign policy influence, bolster our trade competitiveness and market access and would ensure our allies and trading partners have greater access to secure supplies of energy,” Barry Russell, president of the Independent Petroleum Association of America, said last week.
Supporters of the export ban were heartened by Mr. Obama’s veto threat and reject the notion that it’s only a matter of time until the policy is changed.
“Big oil is all hat and no cattle when it comes to their claims of momentum in the face of these facts. [Friday’s] vote was nothing more than another piece of meaningless political theater by a dysfunctional House of Representatives that routinely passes legislation with no hope of success,” said Karl Frisch, executive director of the group Allied Progress, a liberal advocacy group that’s been leading the fight against the House legislation.