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U.S. crude oil export debate all but over

White House policy statement makes position on oil export legislation clear.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Oct. 8, 2015 at 9:16 AM
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WASHINGTON, Oct. 8 (UPI) -- Threat of a presidential veto on a House measure to lift the U.S. ban on crude oil exports suggests the effort is dead in the water, a refinery group said.

The White House issued a statement of administration policy in response to House resolution 702, a measure sponsored by Rep. Joe Barton, R-Texas, that would remove restrictions on the export of crude oil produced in the United States.

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Rather than focus its efforts on an industry already thriving in terms of historical development, the White House said Congress should instead focus its efforts on the transition to a low-carbon economy.

"If the president were presented with H.R. 702, his senior advisers would recommend that he veto the bill," the policy statement read.

There was no statement on the veto threat from Barton. In July, the Texas congressman said that, because crude oil production is high, refineries are running near full capacity and storage facilities were flush with U.S. oil, lifting the ban was a "simple issue" for him to support.

U.S. Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee, said the veto threat runs in contrast to the administration's support for an "all-of-the-above energy policy."

"Study-after-study has shown that lifting the ban on crude oil would lower prices at the pump, support the creation of an average of 394,000 jobs and generate hundreds of millions of dollars in economic benefits," he said.

At a time when low oil prices are hurting U.S. energy producers, a report from the Congressional Budget Office finds authorizing U.S. crude oil exports under Barton's bill would increase the price of U.S. crude oil by around $2.50 per barrel during a period ending in 2025. The nonpartisan Congressional Research Service, however, found some overseas refineries aren't designed to handle the lighter oils from the United States.

White House spokesman Josh Earnest said in the past legislative efforts to lift the ban were moot because those decisions rest with the Commerce Department, which already sanctioned some exports of an ultra-light form of oil called condensates.

Condensates processed in a certain way do not met the federal definition of crude oil. U.S. Energy Secretary Moniz told a Senate committee U.S. exports of non-crude petroleum products of 3.8 million barrels per day last year represented a nearly four-fold increase over the last decade.

Jay Hauck, executive director of the Consumers and Refiners United for Domestic Energy, or CRUDE, coalition, said in response to email questions the U.S. debate over crude oil export policy was over.

"The White House issued a strongly-worded veto threat," he said. "This creates major headwinds for crude export legislation."

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