Murkowski Pushes To Lift Crude Oil Exports Ban

A campaign by Senator Lisa Murkowski to lift the decades-old ban on crude oil exports got its first hearing in Washington today. It’s been 25 years since Congress has formally considered the ban it adopted during the Arab oil embargo, but the recent energy boom in the Lower 48 is triggering new debates.

Download Audio

To some people it still sounds crazy. Why consider selling American crude overseas when the U.S. still imports 40 percent of its oil from other countries? And then there’s the question of the impact on consumer prices.

Chairman of the Senate Energy Committee, Ron Wyden of Oregon, says that’s his focus.

“American families and American business deserve to know what exports would mean for their specific needs when they fill up at the pump or get their delivery of heating oil,” Wyden said.

The witnesses at the hearing spoke from their own economic corners. Harold Hamm, CEO of Continental Resources, the largest leaseholder in North Dakota’s Bakken play, says the ban gives undue advantage to U.S. refineries. They can sell their fuel overseas, but as he put it, producers
like him are stuck being their milk cows.  A Delta Airlines executive, on the other hand, says allowing crude exports will force the price up to whatever OPEC wants it to be, and American consumers will have to pay more for airline tickets and everything else.

An academic from the University of California-Davis, says it’s not so simple. Amy Myers Jaffe says the export ban is only for crude, so U.S. petroleum is already affecting the world market, in the refined products we export.

“So what we’re really discussing is: Who gets to profit from the exports?” Jaffe said.

With the ban in place, it’s the refiners. Without the ban, producers get in on it. Jaffe notes another market wrinkle: the Bakken boom produces light oil, but refineries are set up to process particular grades, so she says America will always have to import heavy crude.

“Because there’s just going to be some refineries that already exist on Gulf Coast that have certain configurations and there’s just only so much light crude they can put through the system,” Jaffe said.

Murkowski says it’s good for policymakers to ask questions and ponder the issue. She figures it will take a lot more dialogue before Congress members and their constituents feel comfortable with lifting the ban. But she also says we’re running out of time.

“We get to a point where we have a mismatch between what we are producing domestically and the capacity within our refineries,” Murkowski said.

Murkowski says without exports, we may reach that point of oversupply in just two years. After the hearing, Murkowski said Alaskans have a special reason to be concerned, because North Slope oil may have to compete for West Coast refinery space.

“I think as Alaskans, we need to appreciate, we have enjoyed higher prices for our crude because it has been in high demand particularly in California, but if California is now going to be able to meet this demand because of oil from other parts of the Lower 48 – that price is going
to go down (and) our margins are going to be less for Alaska,” Murkowski said.

She says she plans to eventually draft an export bill and press her case to the Administration.

SHARE
Previous articleDOT Works To Dig Out Richardson Highway
Next articleUnalaska Copes With Shell’s Decision Not To Drill

Liz Ruskin covers Alaska’s congressional delegation, federal agency decisions that shape life in the 49th state, money in politics and elections. She has deep roots in Alaska and this is her third stint in Washington, a city she has grown to love.

She was born in Anchorage and is a West High graduate. She studied political science at the University of Washington and has an M.A. in journalism from the University of Missouri in Columbia. During graduate school, she moved to Washington to intern as a D.C. correspondent. But for her first real journalism job, she moved back to Alaska to work at the Homer News. She was there for three years before taking a job at the Anchorage Daily News. Over the course of nine years in Anchorage, she covered City Hall, courts, state politics, and Native and rural affairs.

Then, in April 2001, she moved back to Washington to work in McClatchy Newspaper’s D.C. bureau as a correspondent for the Anchorage paper. She stayed in the position for five years.

She took a year off for a journalism fellowship at the University of Colorado in Boulder, then freelanced for several years from the U.K. and Japan, in print and radio.

When a vacancy occurred in APRN’s one-person Washington bureau, she jumped at the opportunity. Liz has been APRN’s Washington, D.C. correspondent since October 2013.

lruskin (at) alaskapublic (dot) org  | About Liz