WHEELING, W.Va. — Before U.S. shale drilling grinds to a halt amid lower oil and natural gas prices, Sen. Joe Manchin, D-W.Va., and other lawmakers hope to boost domestic fracking by exporting crude to foreign countries for the first time since the 1970s.
Introduced Tuesday with oil trading at around $58 per barrel on the New York Mercantile Exchange, the bipartisan American Crude Oil Export Equality Act would increase domestic drilling to help meet global demand, supporters believe.
“Lifting the ban on oil exports will also improve our national security interests by reducing our trade deficits, neutralizing countries like Iran that extract the same types of oil as the U.S., expanding our competitive edge in a global marketplace, and providing a stable source of energy to our allies so that they will no longer be dependent on undemocratic regimes,” Manchin said.
“This bill provides triggers to stop exports if gas prices increase or if our economy is adversely affected,” he continued. “It is encouraging that we are introducing this bipartisan bill that will bring us one step closer to achieving energy independence and an all-of-the-above domestic energy approach.”
On May 7, the the Obama administration’s Department of Energy granted final approval for Dominion Energy to export liquefied natural gas from the $3.8 billion Cove Point site in Maryland, a move industry leaders believe will open a new market for natural gas. Now, Manchin, along with Sens. Heidi Heitkamp, D-N.D., Lisa Murkowski, R-Alaska, and Bob Corker, R-Tenn., hope to see oil going abroad as well.
Heitkamp’s home state of North Dakota is home to the Bakken Shale oil rush, which has created thousands of jobs and billions of dollars in economic development, while Murkowski’s state also features significant levels of oil and natural gas extraction.
“To build a strong future for our country, we need policies that help our country prosper, not policies that are four decades old and in dire need of updates,” Heitkamp said. “But we can change that.”
According to the senators, the oil export ban dates to the 1970s, an era when gasoline shortages – caused by OPEC imposing an embargo on oil sales to the U.S. – led to skyrocketing prices and long lines at service stations. They believe the law is “antiquated” and compromises America’s ability to grow its economy. They cite studies showing that lifting the ban and allowing access to the global markets would probably lower domestic gasoline prices.
“America’s energy landscape has gone through significant changes in the past 40 years. Unfortunately, our energy policies have not all kept up with the times,” Murkowski said. “The current ban on exporting domestic crude oil makes us less competitive as a nation and restricts our economic activity.”
The new bill seeks to reinforce the need to lift the oil export ban by going line-by-line through federal laws already on the books to strike any mention of or reference to the prohibitions on crude oil exports. It also would clearly define the extent of the president’s authority on limiting future crude oil exports.
“We’re now at a point where we can take advantage of economic and strategic benefits from lifting an outdated ban that will expand markets for American oil products overseas,” Corker said. “Boosting global supply should help support reduced and more consistent prices for consumers and give our allies more choices when purchasing oil.”
Louis Finkel, executive vice president of the Washington, D.C.-based American Petroleum Institute, said the legislation can help the U.S. become a “energy superpower.”
“Study after study shows that lifting outdated limits on crude exports will allow America to create more jobs, cut the trade deficit, grow the economy, and put downward pressure on fuel costs,” he said. “The benefits are clear, and we applaud Sens. Heitkamp, Murkowski, Manchin and Corker for working collaboratively to lift trade restrictions that have far outlasted any reasonable justification.”
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