WASHINGTON, Dec. 17 (UPI) -- President Obama is expected to sign a bill that would lift a crude oil export ban because it's balanced by renewable energy incentives, a research note said.
After several legislative attempts, the U.S. Senate voted in favor of a $1.1 trillion omnibus spending bill that includes language that, with provisions, lifts a 40-year ban on the export of U.S. crude oil. U.S. Sen. John Hoeven, R-N.D., who has worked on several provisions to lift the ban, called the vote a triple win for the United States.
"It will create jobs and grow our economy," he said in a statement. "It will keep the price of gasoline lower at the pump for consumers because of more supply, and it will bolster national security through energy security."
The White House said in the past it would veto any legislative efforts to erase the ban, arguing concessions for limited exports of crude oil and refined products dubbed condensate were already approved by the Commerce Department. With government funding on the line, the White House said it opposed the latest efforts, but stopped short of reiterating its veto threat.
Michael Tran, a commodity strategist with RBC Capital Markets, said in a research note that, with the House expected to vote in favor of the spending package on Friday, a presidential signature is imminent.
"Though President Obama had previously spoken out against lifting the ban, we believe that he will sign the bill in part because of the renewable energy tax breaks included in the legislation," he said in the emailed note.
While making no direct mention of the crude oil export provision, the White House in a statement of administration policy said it supported the broad reach of the omnibus package.
"The agreement would extend tax incentives for investments in wind and solar energy, driving significant reductions in carbon pollution and other dangerous air pollutants and providing certainty for investments in clean energy," it read.
RBC said the immediate impact of lifting the ban will be muted. In terms of oil prices, U.S. crude oil will likely spike briefly once the legislation enters into force, but will settle down and continue to trade lower than the global benchmark Brent because of transport costs and infrastructure constraints.
In terms of exports themselves, the research note said not much is expected because the market is already oversupplied with crude oil. One of the larger potential buyers may be Venezuela, which needs lighter oils to mix with its heavier grades found offshore.
In November, Venezuela's president ordered a review of ties with Washington after uncovering allegations the United States was spying on employees at the state oil company.
White House spokesman Josh Earnest said the administration still opposes legislative efforts. The United States already exports around 4.3 million barrels per day in the form of refined petroleum products and has waivers in place to export 500,000 bpd of conventional crude oil.
"So the fact is, yes, this is a legislative action that would require the lifting of this ban," he said. "But the fact is there was already substantial petroleum products, both refined and unrefined, that were already being exported."