WASHINGTON Jan 30 The decision whether to
eliminate a 40-year-old ban on most U.S. crude oil exports
should hinge on whether it would lead to higher domestic retail
gasoline prices, Ron Wyden, chairman of the Senate Energy
Committee, said on Thursday.
The panel held its first hearing in 25 years on whether the
restrictions should be lifted, responding to a strong push by
oil producers and business groups who are seeking to change the
policy as domestic energy production soars.
Wyden said he feared that the impact of a policy change on
consumers would be drowned out by "a number of influential
voices" that want to export oil.
The think-tank Center for American Progress, which has close
ties with the White House, said in a paper this week that
domestic gasoline prices would rise if the export ban was
"I just want to hammer home the point this morning that for
me, the litmus test is how middle class families will be
affected by changing our country's policy on oil exports," said
Wyden, an Oregon Democrat.
Lisa Murkowski of Alaska, the energy panel's top Republican,
said lifting the ban was "about production and jobs."
Maintaining the ban would sooner or later depress U.S. oil
production, she warned.
While the United States can export crude oil products such
as gasoline and diesel, current laws require a presidential
waiver to sell most unrefined crude oil abroad. This effectively
bars most exports for now.
Harold Hamm, chief executive of Continental Resources
, the largest leaseholder in North Dakota's Bakken oil
region, said the current "energy renaissance" in the United
States was threatened by "outdated" policies.
The policy of holding U.S. crude oil back from global
markets distorts the global supply of refined oil, which "sends
the wrong message to our trading partners," Hamm said.
"By imposing trade restrictions on a single segment of the
energy industry, namely domestically produced crude, our
government is arbitrarily subsidizing some U.S. refineries -
many of which are foreign-owned - by giving them the ability to
source American oil at prices well below the world market
price," he said.
Meanwhile, refined products from the United States are
allowed to enter "higher-priced international markets," Hamm
AIRLINE URGES CAUTION
But Graeme Burnett, senior vice president at Delta Airlines
, urged senators to resist calls to lift the ban, saying
it would force U.S. crude out of a competitive domestic market
to a less competitive global market.
"OPEC would reduce supply to maintain high global prices.
The United States' use of homegrown oil would diminish and
prices here at home would rise to match the higher global price
for a barrel of crude," said Burnett, who manages fuel supplies
for the largest U.S. airline.
Delta owns Pennsylvania-based Monroe Energy, an oil
refiner. Burnett said East Coast refiners are particularly at
risk if the crude ban is lifted, since they would face higher
Senators asked witnesses whether a glut of U.S. crude oil
was inevitable, given rising production, and would outpace
domestic refining capacity.
Hamm and Amy Myers Jaffe, executive director of UC Davis'
Institute of Transportation Studies, said this was on the
OPPOSITION FROM AFAR
Although senators like Murkowski have staked out their
positions, others, like Wyden and Tim Scott, a South Carolina
Republican, said they want to better understand a possible range
Meanwhile, two Democratic senators not on the energy panel
sent a letter on Thursday to President Barack Obama, urging him
not to change the current law.
"Now is not the time to reverse these policies that protect
American consumers and America's economic and national
security," wrote Senators Edward Markey of Massachusetts and
Robert Menendez of New Jersey.