Analysis: Chances fading for US crude exports

OREANDA-NEWS. November 19, 2015. Republican lawmakers are facing diminishing hopes for repealing the 40-year-old restrictions on crude exports before election year politics in 2016 make it hard to pass substantive legislation.

A must-pass omnibus spending bill needed to avoid a US government shutdown on 11 December offers the best legislative vehicle for the Republican-controlled Congress to lift the export restrictions this year. But an insistence by Democrats that they will fight allowing crude exports unless it is paired with policies that support renewable energy lessen the odds for that effort to succeed.

Senator Cory Gardner (R-Colorado) today said moving crude exports in the spending bill would be "a little more difficult to achieve" unless Republicans reach a deal with Democrats on a renewable energy package. Coal and nuclear groups would heavily oppose that deal, and there has been no indication that lawmakers are trying to negotiate such a package.

US oil producers have been lobbying heavily this year to lift export restrictions so they can sell crude at higher global prices. They hoped crude exports had a good chance of moving in a \\$325bn highway bill, but the US House declined to do so in the bill that passed this month. The US Senate also declined to address crude exports in a separate highway bill.

Republican and Democratic leaders in Congress will meet tomorrow in conference to negotiate a compromise highway bill. Senator John Hoeven (R-North Dakota) today said he will try to get crude exports into the bill through this process, but Democrats would fight such a measure. President Barack Obama's administration had opposed legislation to lift export restrictions.

That leaves the omnibus spending bill as one of the few remaining legislative vehicles this year for crude exports. But beyond the renewable energy issue, there could be reluctance to including a politically charged issue such crude exports because Republicans may have to rely on Democratic votes to get enough votes to keep the government operational.

"Leadership will likely have its hand full with the omnibus, so why add something like exports, which just complicates matters even more?" said Crude Coalition executive director Jay Hauck. The refinery-backed group has been lobbying to retain crude export restrictions.

Republican lawmakers and US oil producers are not giving up hope that Congress can approve crude exports this year. Senator Lisa Murkowski (R-Alaska) and representative Joe Barton (R-Texas) are continuing to push the measure. Oil groups say they are optimistic those efforts can succeed this year.

"For us waiting is not an option," said Producers for American Crude Oil Exports executive director George Baker, who has been lobbying to lift export restrictions. "There are probably a quarter of a million Americans out of work because of cutbacks in the drilling of new wells."

Even if Congress declines to take up crude exports this year, Republicans could still try to push through the measure in 2016 or in 2017, when they hope a Republican will take control of the White House.