Cuellar: House Will Pass Bill Lifting Crude Export Ban

A Texas Democrat says he believes the U.S. House will pass legislation lifting the country’s 40-year-old ban on most crude oil exports — even amid a frenzy of activity in the upcoming session.

“The House is going to pass it,” U.S. Rep. Henry Cuellar, of Laredo, said Wednesday in an interview.

Cuellar, among the handful of Texans in Congress actively pushing to overturn the ban, acknowledged that looming debates on the Iran deal, abortion and the highway bill — plus efforts to avert a government shutdown — could limit attention to the issue. Nevertheless, the Democrat said he feels confident that at least the House can hash out a deal. 

“I think this one has some momentum. I’ve talked to [Chairman of the House Energy and Commerce Committee] Fred Upton,” he said. "It’s a matter of whether it’s a single-shot bill, or whether it’s going to be tied into something. I think it’s going to be tied up to something."

As it stands, American companies may export refined petroleum products such as gasoline or diesel fuel, but most crude oil pumped here is stuck at home.

The policy dates back to the mid-1970s, when the United States produced far less oil, and the 1973 Arab oil embargo caused global oil prices to skyrocket. In 1975, President Gerald Ford signed the Energy Policy and Conservation Act banning crude oil exports with few exceptions in an effort to keep oil here and protect against price shocks.

Since then, the nation — led by Texas — has become the world’s top oil producer, largely due to technological advances like hydraulic fracturing that allow operators to tap resources once considered unreachable. That production surge is filling the country’s pipelines and storage tanks, driving down U.S. prices and slowing drilling across the country. It has also revived a long-running debate about whether Congress should repeal the policy.

An even international playing field, proponents of lifting the ban argue, would ease the hardship on Texas oil producers. But ban advocates argue its repeal would raise energy prices for consumers and have a negative environmental impact. And some refiners are lobbying for the status quo, which effectively gives them a discount on crude oil for their refineries.

The fight is also regional, pitting the economic interests of beleaguered Texas oil producers against Americans in other states where lifting the ban could mean higher energy prices, particularly in the Northeast where consumers use heating oil. 

Some opponents of lifting the ban fear rising gasoline prices at the pump, though a series of recent reports have cast doubt on that likelihood. The federal Energy Information Administration concluded that prices at the pump are more closely linked to global crude prices than the value of U.S. oil, and an agency report this week said those prices would slightly decline or be untouched in an era of U.S. crude exports. Meanwhile, the report said, oil production here would rise.

Cuellar said he’s made a deal with U.S. Rep. Joe Barton, R-Ennis, who has been leading the push to lift the ban: Barton will rally Republican votes, while the Democrat patrols his side of the aisle.

Cuellar said some Democrats clearly fear political fallout if gasoline prices rose in a new era of exports — even if experts say otherwise.

“A lot of folks haven’t really paid attention to this issue,” he told The Texas Tribune. They’re “worried if gasoline prices go up, we’re going to get hit with a 30-second spot” of negative political advertisements. 

Cuellar said he was less confident that legislation could wriggle through the Senate, but said recent comments by Senate Minority Leader Harry Reid — who told Politico he “sees room for a compromise on the effort" — were reason for optimism.

At the end of the session, Cuellar said, proponents would “look at what train is moving” and add ban repeal legislation to that.

Abby Livingston contributed to this report.