House Republicans want export ban reviewed

Energy landscape much different than in wake of Arab oil embargo, leaders say.

By Daniel J. Graeber
Rep. Fred Upton (R-MI) (L), pictured in 2008, says time is "ripe" to consider lifting restrictions on U.S. crude oil exports. Photo by Brian Kersey/UPI
Rep. Fred Upton (R-MI) (L), pictured in 2008, says time is "ripe" to consider lifting restrictions on U.S. crude oil exports. Photo by Brian Kersey/UPI | License Photo

WASHINGTON, Nov. 26 (UPI) -- With shale oil in abundance in the United States, "the time is now ripe" to consider easing the ban on crude oil exports, House Republican leaders said.

U.S. Reps. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee, and Ed Whitfield, R-Ky., said they've scheduled a hearing for Dec. 11 to examine whether a law from 1975 restricting crude oil exports is still good policy.


"Our energy landscape looks much different than it did 40 years ago, and the time is now ripe to revisit and consider whether some of the energy policies rooted in the past still make sense today," they said in a Tuesday statement.

U.S. crude oil production reached 9 million barrels per day for the week ending Nov. 15, an increase of about 14 percent from one year ago, according to the Energy Information Administration.

The increase in oil production is a direct result of activities in shale basins, notably the Eagle Ford and Bakken reserve areas in Texas and North Dakota, respectively.

Upton and Whitfield argue the reasons for the crude oil export restrictions are no longer valid in the shale era.


Arab members of the Organization of Petroleum Exporting Countries in the early 1970s placed an embargo on oil exports in response to U.S. policies on Israel. In response, the U.S. Congress passed the Energy Policy and Conservation Act of 1975 in an effort to reduce energy demand and increase domestic energy production.

It places restrictions on crude oil exports from domestic sources, but includes a clause where exports are permissible if it's "clearly necessary to protect the national interest."

Supporters of repealing the ban argue it would increase U.S. leverage overseas, while at the same time creating source of domestic economic stimulus through jobs and lower energy prices.

"We are now one of the world's greatest energy superpowers, but we need the right policies in place to take full advantage of this position," Upton and Whitfield argued.

Those in the refining sector, however, question the logic behind easing export restrictions.

Thomas O'Malley, executive chairman of refining company PBF Energy, said the "only logistical conclusion" to make if the ban were lifted is that oil prices will increase, refiners will reduce gasoline production in response and domestic prices for gasoline will increase.

As a result of the current increase in U.S. oil production and tepid demand, gasoline prices are at a historic low, which some argue is a source of economic stimulus in and of itself.


In a brief describing a new online tool to track oil imports, EIA said it was reviewing the consequence of a "possible relaxation" of crude oil export legislation.

There are no restrictions on petroleum products like gasoline. In early November, Australian company BHP Billiton said it concluded that condensate, an ultra-light grade of crude oil taken from the Eagle Ford shale play in Texas, was legally eligible for exports.

Latest Headlines