Democrats ask for price impact analysis of U.S. oil exports

By:  Reuters – Ayesha Rascoe
Source: Reuters

The U.S. public deserves to know how lifting the country's decades-old ban on crude oil exports would affect gasoline prices, two Democratic U.S. Senators said on Thursday, calling for a "comprehensive analysis" of the issue.

Senator Ron Wyden, the Chairman of the Senate Energy Committee, and Senator Maria Cantwell, from Washington state, asked the Energy Information Administration for details about how allowing unlimited oil exports would impact domestic energy supplies and costs.

Burgeoning oil production has ignited a debate over whether the United States' government should ease its 40-year prohibition on shipping U.S. crude overseas.

"It's important that everyone has the facts before such a major a decision is made," Wyden said in a statement.

Oil producers and business groups have pressed for a change in the policy, largely crafted in the aftermath of the OPEC oil embargo of the 1970s. Federal regulations allow exports of refined products, but effectively ban all but a handful of specific crude oil shipments.

Permitting more crude oil exports would help address the mismatch between soaring output of light, sweet crude from the nation's shale formations and U.S. Gulf coast refineries, better suited to process heavier crudes, oil producers argue.

Some groups have raised concerns that lifting the ban would lead to higher domestic gasoline prices.

Wyden and Cantwell asked EIA, the independent statistics arm of the Energy Department, to analyze the effects of oil exports on both refiners, who purchase crude oil, and consumers, who purchase refined products like gasoline and diesel.

The lawmakers also asked the agency to study how crude destined for export would be transported, specifically questioning the likelihood of more oil train traffic in the Pacific Northwest region that they represent.

As attention on crude oil exports intensifies, some lawmakers have been hesitant to stake out a position on the issue, which could alienate voters if they feel pinched by expensive fuel costs.

Usually united on energy matters, the Republican caucus has yet to reach a consensus.

Congressman Joe Barton, a Texas Republican and former head of the House Energy and Commerce committee, told reporters on Thursday that he could "argue on either side of the debate" right now.

At a breakfast sponsored by Politico, Barton said he understood the economic argument against the ban. But he added: "a lot of the environmentalists are going to fight us tooth and nail if we try and end the ban. Is it really worth having that fight?"

Alaska Senator Lisa Murkowski, the top Republican on the Senate Energy Committee, has urged President Obama to lift the ban, saying it would create jobs and boost the economy. She does not plan to introduce legislation to lift the ban in the immediate future, but is willing to consider taking such action if Obama does not act, a spokesman said in January.