WASHINGTON (Reuters) - The top Republican on the Senate Energy Committee on Tuesday urged an end to a decades-old U.S. ban on exporting crude oil, saying it will disrupt supply and discourage U.S. production rather than keep domestic gasoline prices stable.
Lisa Murkowski of Alaska, at an event at the Brookings Institute in Washington, professed her support for easing restrictions on crude oil exports as the United States reaches record levels of production.
Murkowski, whose state is alone among U.S. states because it can already export crude oil, released a report aimed at triggering debate among lawmakers over whether the United States should ease the restrictions.
While the United States can export crude oil products such as gasoline and diesel, the Mineral Leasing Act of 1920 and the Outer Continental Shelf Leasing Act require a presidential waiver to sell most unrefined crude oil abroad. This effectively bars exports for now.
“To the extent that the crude oil export ban contributes to supply disruptions and decelerating oil production (which affects employment), then the American consumer will suffer the consequences,” Murkowski said.
She said the administration should be able to use its authority to lift the existing ban on crude oil because it many not be possible to economically refine the glut of light sweet crude oil being produced, and this could qualify for a waiver.
As the debate gains momentum, some oil refining companies are coming out against unfettered crude exports.
“Valero does not support changes to the nation’s crude oil export policy,” said Bill Day, a spokesman for Valero Energy Corp. “It makes more sense to keep crude oil here in the U.S., where it can be refined into value-added products for domestic and export use.”
Murkowski told reporters that if the export policy is changed refiners “are going to have to deal with it ... My interest is not to protect the refineries’ bottom line.”
“We can do more to increase refining capacity. We have seen those adjustments or reconfiguration within our refineries to accommodate LTO (light tight oil) but I do think we get to a point where it is this mismatch, where we are not able to gain alignment,” she said.
The senator does not plan to launch comprehensive legislation on the topic - in part because 2014, an election year, might not yield much action in Congress - but did not rule out a “small, targeted bill to move the ball forward.”
She added that if the White House disagrees and chooses to maintain the ban, “then the Senate should update the law to reflect 21st-century conditions.”
Asked on Tuesday if the White House has a view on the issue, spokesman Jay Carney declined to comment.
The issue of whether the United States should export crude oil is shaping up to be among the biggest energy debates of 2014.
U.S. Energy Secretary Ernest Moniz raised eyebrows last month when he said this and other energy policies, crafted during an era of scarcity, should be revisited.
Recent editorials in the Washington Post and Wall Street Journal, among others, have called for an end to the ban.
The American Petroleum Institute, a lobbying group for the oil industry, renewed its call for lifting the ban at an event on Tuesday.
“What we should also look it is how we bring more of this vast domestic supply to the global marketplace. The free market is the best factor to determine price and supply and demand equations. The worst thing for the government to do today is to distort the marketplace,” said API President Jack Gerard.
U.S. policy “should not be bound by past practices or the visions of the Arab oil embargo in the 1970s,” he said. “It’s a new day.”
Murkowski does not yet have plans to introduce legislation to lift the ban or to hold specific hearings on it but wants to win over other senators with facts, spokesman Robert Dillon said.
Murkowski’s Democratic counterpart on the Senate Energy Committee, Ron Wyden, is due to leave his post to take over the reins of the Senate Finance Committee.
Louisiana’s Mary Landrieu, senator for a state that is a major energy hub, is expected to take Wyden’s place and could be more receptive to discussions on boosting exports.
Landrieu recently told the National Journal that she “would support lifting the (crude oil export) ban if the scientific data shows we should. And I think that is what the data is showing.”
At least some Democratic senators, though, have already expressed opposition to any relaxation of the crude oil export ban, including Robert Menendez of New Jersey and Ed Markey of Massachusetts.
The Center for American Progress, a progressive think-tank, blasted Murkowski’s comments on Tuesday, saying advocates for exports assume domestic production will grow endlessly.
“We are a long way from true energy security, and we should retain this domestically produced, strategic commodity until then. Allowing oil exports now would be like celebrating a victory at half time,” said Daniel Weiss, director of climate strategy at CAP.
John Podesta, co-founder of CAP and a former White House Chief of Staff under Bill Clinton, recently started work as an Obama adviser and is expected to focus on energy and environmental issues.
Reporting by Valerie Volcovici, additional reporting by Selam Gebrekidan in New York, editing by Ros Krasny and Chizu Nomiyama