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Senate Report Calls for President Obama to Lift Crude Oil Export Ban

Senator Lisa Murkowski

Senator Lisa Murkowski, R-Ala., released a report on June 9 advocating for the end of the crude oil export ban. She is the chairperson of the Senate Committee on Energy and Natural Resources.

The report—titled “Rendering Vital Assistance: Allowing Oil Shipments to U.S. Allies“—called for President Barack Obama to end the ban as well as provide oil for allies, such as South Korea, Poland and Japan. As a result, these countries would not depend oil coming from Russia or Iran:

Many U.S. allies and trading partners are interested in purchasing American oil to diversify away from Russia, Iran and other problematic sources. Allowing such shipments would send a powerful signal of support and reliability at a time of heightened geopolitical tensions in much of the world. The mere option to purchase U.S. oil would enhance the energy security of countries such as Poland, Belgium, the Netherlands, India, Japan, and South Korea, even if physical shipments did not occur.

The crude oil export ban was first implemented on Dec. 22, 1975, through the Energy Policy and Conservation Act in response to the 1973 OPEC oil shock. Then-President Gerald Ford signed the legislation into law and said “the long debate over national energy policy” was over.

Currently, the U.S. provides an exemption to Canada over crude oil exports and operates an exchange program with Mexico. It additionally exports crude oil to Israel, as part of an agreement, in case the latter suffers from a shortage.

As noted in the report, “the Obama administration renewed the agreement following a bipartisan letter led by Senators Lisa Murkowski and Mark Warner, D-Va., sent in April 2015, encouraging the Department of State to expedite its renewal.”

Murkowski, after taking over as leader of the Senate energy committee, immediately vowed to lift the crude oil export ban. She introduced, on May 12, S.1312 in the Senate energy committee, which intends to end the ban.

At the CERAWeek conference this year, which brings together oil and gas industry leaders and government officials in Houston, Murkowski told an audience it was “time to lift America’s ban on domestic oil exports.” She referred to the P5+1-Iran negotiations as a reason why the ban would need to be repealed.

“We should not lift sanctions on Iranian oil while keeping sanctions on American oil. It makes no sense,” Murkowski said.

Moreover, Murkowski co-authored a piece with Senator John McCain, R-Ariz., and Senator Bob Corker, R-Tenn., for Foreign Policy where they argued allies of the U.S. need crude oil for security:

The benefits to global security of allowing oil shipments to our trading partners are obvious and indisputable. Our friends in Asia, eager to comply with Western sanctions against Iran, would have a new alternative source for their energy needs.

Senator Maria Cantwell, D-Wash., who also sits on the energy committee, was cautious about an end to the ban. Cantwell wanted to know what impact such a change would have for U.S. consumers:

The information we have thus far is inconclusive to how lifting the ban on oil exports may impact consumers – especially those in the Pacific Northwest, who experience some of the highest gasoline prices in the nation,

Jesse Coleman, a researcher for Greenpeace, told Firedoglake the recent oversupply was a reason why such calls to lift the crude oil export ban are happening.

“These oil companies are being caught, as the industry have been caught many times in the past, with a massive oversupply. So they want to overturn the oil export ban,” Coleman said.

Coleman additionally criticized the rhetoric used against Russia despite firms working with the country.

“They say it will stop Vladimir Putin and these companies are working with Russian companies,” Coleman said.

In early 2014, the President Obama signed a series of executive orders barring companies from working with Russia including oil. Although, ExxonMobil, in the same year, was able to work with the Russian government to drill in the Arctic. Still, most companies are unable to work with the Russian government due to sanctions.

The call to end the crude oil export ban is not new. The American Petroleum Institute, a trade association representing more than 600 U.S. oil and gas companies, advocates an end to the ban.

John Felmy, API’s chief economist, cited restrictions to fossil fuel growth as stopping the U.S. from growing as an “energy leader:

Unfortunately, there’s a limit to how much we can grow as an energy superpower if U.S. oil and natural gas producers aren’t able to access the global market. We have every reason to protect and accelerate America’s growth by lifting outdated export restrictions,

Even Secretary of Energy Ernest Moniz said, in December 2013, there were issues “that deserve some new analysis and examination in the context of what is now an energy world that is no longer like the 1970s.”

Recently, a report by Bank of America-Merrill Lynch Global Research found a “surprising amount of support” from Congress to remove the export ban. In fact, the authors of the report believe there is a 50 percent chance the ban will be repealed in the next two years.

Jared Margolis, staff attorney at the Center for Biological Diversity, told Firedoglake, if such a law was passed, calls for more trains and pipelines to carry the crude oil would increase.

“There’s going to be a push for more crude oil trains, certainly. There’s going to be a push for more pipelines,” Margolis said.

A major concern, in regards to trains, is use of “bomb trains,” which can explode because of numerous factors including the volatility of the crude oil.

While crude oil is transported mostly through pipelines, trains are becoming a more cheaper, popular option. The New York Times highlighted last year how such “a business was nearly nonexistent” six years ago.

In recent years, there have been more accidents involving such trains and Margolis said it will grow if the crude oil export ban is lifted.

“[You’ll have] increased rail traffic and, as a result of that, you’ll have more rail accidents,” Margolis said.

Murkowski, in all of her speeches, reports and writings on crude oil, does not address the impacts of oil-by-trains. Although, in the Foreign Policy article, she noted, along with McCain and Corker, “any environmental impact [because of crude oil production] would also be negligible, as American oil is produced under some of the strictest safeguards on the planet.”

Coleman said to Firedoglake the amount of land sacrificed for crude oil was “mind-blowing.”

“You don’t have to look after 2010 with the BP oil spill to be aware of crude oil spills. That’s just one instance,” Coleman said.

BP released a report last week showing how the U.S. replacing Russia as the world leader in oil and gas exploration. Most of this is light, sweet crude oil.

Margolis authored a report in early February on the environmental consequences of oil trains and the lack of serious government effort to regulate “bomb trains.”

“Economics drives regulations a lot of time. The concern is that these agencies tend to be captured a lot of times,” Margolis said.

The report by Margolis also cites risks associated with light crude oil produced in Bakken region of North Dakota, where it is “generally more explosive, more toxic and can penetrate soils more quickly and deeply than traditional crude.”

As Margolis stressed, all fossil fuels like crude oil are best left alone because of climate change.

“From top of the bottom, these are what we call extreme fossil fuels. If we want to prevent climate change, we need to keep this stuff in the ground,” Margolis said.

Image from United States Congress and as such is in the public domain.

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Brandon Jordan

Brandon Jordan

Brandon Jordan is a freelance journalist in Queens, NY and written for publications such as The Nation, In These Times, Truthout and more.

  • dubinsky

    not a good idea for the US…but probably good politics for an Alaskan pol to raise the question of export.

  • bsbafflesbrains

    Do other freight trains derail like oil trains? Can’t remember a story about a corn or wheat train derailing. No smoke so no media?

  • http://Smilejamaicakrcl.com Bobbylon

    Emperor Peace Prize’s energy policy: Oil of the above

  • bsbafflesbrains

    Japan needs our oil to run the pumps cooling the damaged reactors at Fukushima. Our fearful leader loves Nuclear as well. Isn’t there a solar power lobby by now that could “contribute” to his Energy Policy decisions?

  • Coach Bill

    I doubt the average American would be in favor of exporting oil in light of how much we are still importing.

    http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_epc0_im0_mbbl_m.htm

  • dubinsky

    there isn’t a rabid anti-corn or anti-wheat faction running around and providing an eager audience any such stories

  • AshenLight

    Exactly. We produce about 9 million barrels per day and consume about 19 million; opening up exports may help enhance the profits of the most profitable industry in the history of the world, but you have to do some serious contortions to even suggest how this benefits the average American.

  • bsbafflesbrains

    I drive by thousands of acres of Avocado trees to get to a super market that sells avocados from Mexico. Same for tomatoes. Rich people buy the best and the rest of us get the second quality. Guess that goes for oil as well. I remember when shipping costs dictated a market rather than trade agreements and tax avoidance schemes.

  • Brandon Jordan

    If I remember correctly from my interview with Jared Margolis, these crude oil trains also include other staples like you mentioned.

  • Jared Margolis

    They do derail, but not nearly as often, and the number of derailments of trains carrying other products has actually gone down, while the number of oil train derailments have risen. This is due to both the increase in oil train traffic, but also to the excessive weight of oil trains. There are very few liquid commodities moved by large unit trains (i.e. 100 cars or more), but this has been the norm for crude. These massive trains impart higher than usual forces on track infrastructure, are harder to stop with current brake systems, and the sloshing of the liquids can cause swaying of the cars, all of which increase the potential for derailments. Both the DOT and the Transportation Safety Board of Canada have acknowledged that the excessive weight of oil trains is a cause of derailments, yet the new tank car rules fail to adequately address this. I have a petition before the Pipeline and Hazardous Materials Safety Administration asking for a weight limit for these trains, but this has been ignored by the regulators.

  • bsbafflesbrains

    Thanks so much. This seems bizarre but expected in a way. Why would Oil Companies want to save money on safety? Is it because they don’t have to pay for the real risk with insurance?

  • Brandon Jordan

    To reinforce Coleman’s point on companies working with Russia, ExxonMobil CEO Rex Tillerson two years ago in Russia:

    President of Russia Vladimir Putin: Good afternoon, friends and colleagues,

    I am very happy to welcome you to the St Petersburg International Economic Forum. Without a doubt, energy has always been one of the key strategic sectors in the world economy and very much remains so today.

    The first steps in this direction are already being taken. Rosneft and ExxonMobil have created a research and development centre for Arctic technologies. I will take this opportunity to also congratulate the winners of the Global Energy Prize awarded today. This year, it was awarded to Japanese scientist Akira Yoshino and Russian researcher Vladimir Fortov. I must note that basic research in the field of energy is what lays the foundation for the future of energy security in our nation and the world overall.

    Today, several new documents were signed at this forum on partnerships between Rosneft and international oil and gas companies ExxonMobil, Statoil and Eni (I am happy to see our old friends here today and to greet them), as well as an agreement on technological partnership with General Electric and agreements on the principles of supplying LNG.

    This is basically a new era in cooperation the essence of which, as regards our interaction with strategic partners, is to move away from just importing raw materials to establishing full-fledged cooperation in production and technology.

    from: http://louisproyect.org/2015/06/15/is-it-really-1914-all-over-again/

  • mulp

    Mexico is the number one global supplier of avocados and I suppose you are buying the grade 2 or 3 avocados from Mexico because they are cheaper and you don’t want to pay the higher price for number 1s. And Mexico exports far more number 1s than California does. And the ones that are not suitable for export to Asia get exported to the US for you to buy, denying Mexicans any at all.

    The California growers are sending the rejects and excess to food banks.

  • mulp

    Exporting oil and gas will ideally make them more expensive in the US and drive more switching to electric vehicles and electric heat pumps to heat buildings.

    Higher oil and gas prices are needed, and ideally that would be done with a high carbon tax in the US. If gasoline and heating oil costs $10 per gallon in the US because of a carbon tax, tax dodgers will stop burning fossil fuels by building wind and solar and batteries and electric vehicles and heating systems. The US oil production would be exported to drive down oil prices in the Persian Gulf and Africa and defund dictators who spend oil profits buying weapons and funding terrorism.

    Cheap gasoline is bad for American workers because it kills jobs.

    And no, a high carbon tax will not pay for anything because smart people will stop burning fossil fuels and not pay any tax so there will be the tax revenue only from the idiots who don’t dodge the taxes by switching to electric, or algae oil.

  • AshenLight

    I think it’s more that oil trains get more opposition because they tend to explode when they derail (hence the term “bomb trains”). To my knowledge, nothing like Lac-Mégantic has ever happened from a wheat train derailment.