Texans in Congress Taking the Lead in Bid to End Crude Oil Export Ban

Three members of the Texas congressional delegation have high hopes that after 40 years, the federal government will eliminate a ban on American crude oil on the international market.

U.S. Reps. Henry Cuellar, D-Laredo, Joe Barton, R-Ennis, and Michael McCaul, R-Austin.
U.S. Reps. Henry Cuellar, D-Laredo, Joe Barton, R-Ennis, and Michael McCaul, R-Austin.  Bob Daemmrich / Jennifer Whitney

WASHINGTON — A bipartisan trio in the Texas congressional delegation is leading the charge to eliminate a 40-year-old ban on putting American crude oil on the international market.

It’s a push that pits some oil producers against refineries — two large Texas industries. But the members leading the bid to repeal the law — which allows American companies to export refined petroleum products like gasoline or diesel, but not crude oil — say the change is needed because the U.S. is in a new era of energy production. 

“We are still operating under some outdated laws on the books that just don’t make sense anymore because of the new technology that we have,” U.S. Rep. Henry Cuellar, D-Laredo, said last week at a news conference in Washington.

U.S. Rep. Michael McCaul, R-Austin, introduced legislation in early January to do away with the export ban. A month later, U.S. Rep. Joe Barton, R-Ennis, followed suit with his own bill. And Cuellar has been the point man in drawing Democratic votes in support of the legislation.

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Proponents of the ban say a repeal could cause energy prices to increase and have a negative environmental impact. But advocates for the repeal argue that geopolitics and oil economics have changed since the policy was enacted in the mid-1970s.

The U.S. produced far less oil then, and the 1973 Arab oil embargo caused global oil prices to skyrocket. In 1975, President Gerald Ford signed the Energy Policy and Conservation Act, which banned crude oil exports with few exceptions – an effort to keep oil here and protect against price shocks.

There are countering studies on the potential impact of the issue. The Brookings Institution, a left-of-center think tank, projected in September that a repeal could increase the country's GDP by $550 billion to $1.8 trillion over the next 25 years. But it also states that lifting the repeal could hurt refineries in some regions and that "these issues are serious for those companies involved and will entail real economic costs which should not be underestimated." 

Some politicians say the repeal is a means to further undermine the Russian economy, amid President Vladimir Putin’s saber rattling.

Eleven members of the Texas delegation either sponsored or co-sponsored Barton’s bill, and state government officials are similarly calling for a repeal. Both of Texas' U.S. Republican senators, John Cornyn and Ted Cruzsupport doing away with the export ban. 

But the most pivotal advocate for the legislation is not from Texas – she is newly installed Senate Energy and Natural Resources Chairwoman Lisa Murkowski, an Alaska Republican, who took the gavel in January and said that it’s premature to determine the fate of the proposal.

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“Will oil exports be in our broader bill?” she asked at an energy industry conference in Houston last month. “It’s too early to know, just yet.”

“But it is time to lift America’s ban on domestic oil exports, which is why I am actively turning to legislation on that topic this year,” she said.

House Republican leadership is not overtly behind removing the export ban. The fear, several Hill staffers working on the issue say, is that Republicans have no appetite to see an export ban repeal tacked onto, and possibly endanger, a larger energy package.

And so the marching orders to the GOP proponents are to recruit votes from the Democratic minority. 

Which is where Cuellar comes in. 

Cuellar, a conservative Democrat, is often the favorite across-the-aisle partner for legislation among Texas Republicans.

His legislative role is to whip Democrats to the vote, and he won an early victory when U.S. Rep. Eddie Bernice Johnson, D-Dallas, signed on as a co-sponsor to Barton's bill.

As for the timing, proponents hope the legislation could hit the House floor by the summer. Other advocates say they would be happy to see it passed into law by the end of the year.

House and Senate Democrats who are skeptical of a repeal are far less rosy about the speed at which legislation could move, particularly if oil prices begin to climb.

And then there is the Obama administration. 

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House GOP staffers say they see encouraging smoke signals coming out of the executive branch.

It’s a strikingly different dynamic from the Keystone XL pipeline debate. Republican staffers concede their bosses are taking the carrot — versus the stick – approach with President Obama to avoid the “political food fight” that the Keystone pipeline became, according to a staffer for a Republican member of the Texas delegation.

Still, major obstacles are probably coming.

In order to pass it into law, Murkowski will probably have to secure 60 votes to overcome a potential filibuster in the Senate. Such a move is exactly how environmentalists aim to upend the legislation.

“It’s been really interesting to watch their rhetoric,” said Zach Drennen, the spokesman for the League of Conservation Voters. "They’ve gone from ‘Oh, we need to drill this oil so we can have energy independence’ to ‘Oh, we need to drill this oil so we can ship it overseas.'”

Athan Manuel, a lobbyist for the Sierra Club, echoed the comments, arguing that lifting the ban would be tantamount to “exporting climate change” and repealing the ban "makes the rest of the world more dependent on fossil fuels." 

Many key members in the Houston area and on the East Coast also represent the competing interest group in the debate: refineries.

But lines have not hardened within the Congress. Capitol Hill staffers on both sides of the issue say there are plenty of members who are not educated on the export ban well enough yet to be hard yeas or nays.

Weighing on members’ political calculations is the fact that oil is at the lowest prices in years. Most economists expect gas prices to go up at some point in the future.

And so for the officeholder, the risk is to cast a vote on something that constituents believe will raise gas prices, whether or not the price increase is tied to the issue at hand. 

Jim Malewitz contributed to this report.