US bill would ban export of some refined oil products

Thu Mar 29, 2012 2:29pm EDT

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* Bill would ban oil product exports from new leases

* Will likely have trouble gaining support from Republicans

* EIA said exports not driving rising gasoline prices

By Ayesha Rascoe

WASHINGTON, March 29 (Reuters) - U.S. Democrats on Thursday unveiled a bill that would ban the export of refined fuels derived from oil produced on federal lands, the latest legislative volley in response to surging fuel prices.

The legislation would only affect new federal oil and gas leases, but it was introduced just as the United States becomes a net exporter of gasoline and refined fuels, the first time in decades.

"The oil below taxpayer-owned lands belongs to the American people, and should stay here in America to help American consumers and strengthen our national security," said Congressman Edward Markey, one of three Democrats sponsoring the bill in the House of Representatives and an outspoken critic of the oil and gas industry.

Any measure banning energy exports will likely have a hard time gaining traction in the Republican-controlled House, however, where Republicans traditionally support open markets and have touted energy exports as positive for the U.S. economy.

The bill would allow some exceptions, including presidential waivers for national interest or if the fuel was necessary to fulfill North American trade agreements.

The debate over the future of U.S. energy policy has intensified in recent weeks, as each political party tries to shield itself from voter backlash over expensive gasoline.

Republicans have accused the Obama administration of raising gasoline prices by hampering domestic oil production, while Democrats have pressed for ending tax breaks for oil companies and investing in clean energy.

Concern about U.S. fuel exports comes as unconventional oil and gas production transform the nation's energy landscape and U.S. gasoline demand weakens.

The United States was a net exporter of petroleum products at the end of 2011, the first time since at least 1949, according to the Energy Information Administration.

Still, the EIA said in a report earlier this month that exports were not driving up gasoline prices.

Gasoline exports from the United States climbed to more than 500,000 barrels per day in 2011, up 57 percent from a year earlier and 266 percent increase compared to 2007, the EIA said.

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