Key House Republican backs oil export debate

An oil tanker, right, cruises past a new liquefied natural gas tanker at the Cheniere terminal in Cameron Parish, La. (Michael Stravato/The New York Times)
An oil tanker, right, cruises past a new liquefied natural gas tanker at the Cheniere terminal in Cameron Parish, La. (Michael Stravato/The New York Times)

WASHINGTON — Because exporting U.S. oil could help create jobs inside the country it’s time for Congress to consider lifting a decades-old ban on those foreign sales, a key House Republican said Tuesday.

“The energy sector has been the nation’s most significant jobs creator in recent years, but with the drop in oil prices as many as 100,000 energy industry positions have been lost,” noted Rep. Fred Upton, R-Mich., the chairman of the House Energy and Commerce Committee. “The case for creating more jobs by expanding the market for American oil is a key reason why oil exports should be on this committee’s agenda this year.”

Upton’s remarks, delivered at the start of a hearing on domestic energy infrastructure, fell short of a full-throated call for crude exports but still marked the chairman’s strongest comments to date on the issue.

Export advocates siezed on Upton’s remarks as evidence of growing momentum to undo the 40-year-old trade restrictions.

“We have a real chance on this,” said Rep. Joe Barton, R-Ennis, adding that he is “gaining cosponsors every day” on his leading bill to allow crude exports. “This is something that has legs.”

Upton’s view is especially significant because he has taken a deliberative path in studying the issue and because his committee plays a key role in the debate over oil exports. Upton said he would work with Barton and other House members “to ensure that we get the policy right.”

“It’s time that Congress considered revising the ban on crude oil exports,” Upton added.

Related story: Lawmaker suggests grand bargain to allow oil exports

Oil export advocates have advanced several arguments for selling more U.S. crude overseas, chiefly stressing that it would give the United States more power to help energy-hungry allies around the globe. They have argued that exporting discounted U.S. oil could lower the higher international crude price, causing a dip in gasoline prices that are pegged to it.

And in recent months, they have seized on the low crude price and layoffs throughout the oil and gas industry to leverage the issue. Oil producers eager for exports insist that if foreign oil sales give a bump to domestic crude prices, that could drive new upstream investment and production, helping stabilize — or even reverse — those job losses.

Related story: More oilfield jobs lost despite rebound in crude prices

During a Republican Study Committee panel discussion on the issue Tuesday, Pioneer Natural Resources CEO Scott Sheffield insisted that even a small boost to domestic crude prices would put now-idled rigs back to work.

There’s “a sense of urgency” around the issue, Sheffield said, noting the effects of lower oil prices are rippling throughout the industry’s long supply chain.

Upton suggested that he found the economics of the issue particularly compelling, referencing reports from government agencies, academics and think tanks that have concluded increased oil exports would reduce gasoline prices.

“Economic and foreign policy experts across the political spectrum believe that expanding the markets for American oil would be a net jobs creator at home while enhancing our geopolitical influence abroad,” Upton said. “Oil exports can be a win for the American people and a win for our allies.”

Export backers are up against strong political headwinds. Some lawmakers are wary of backing oil exports for fear voters will hold them accountable for any future increase in gasoline prices — no matter what caused the jump.

Rep. Bill Flores, R-Texas, stressed the importance of “getting the politics right.”

“The missing item is how do we convince the American people and some of our colleagues this is the right thing to do,” Flores said.

Some Obama administration officials have been wary too. Under questioning from Barton Tuesday, Energy Secretary Ernest Moniz noted that despite a surge in domestic oil product United States still imports foreign oil — about 7 million barrels per day. That, Moniz has suggested, is a reason to be skeptical of greater U.S. oil trade.

Read more: Energy chief says there’s no compelling case for oil exports yet

Jay Hauck, executive director of Consumers and Refiners United For Domestic Energy, a coalition of refiners fighting exports, argued the United States’ status as an oil importer is a potent reason to oppose a policy change.

“The chairman and the committee recognize the importance of energy independence, but the American people are confused that some policymakers advocate exporting this precious natural resource while at the same time importing enormous quantities of foreign crude to meet domestic demand,” Hauck said.