Oil industry wins big victory as House OKs crude exports

WASHINGTON — The House passed legislation authorizing widespread crude exports on Friday, delivering a major victory to energy companies lobbying for the freedom to sell oil around the world.

But their success may be short-lived, because getting the trade policy change through the House was actually the easy part. The real test is in the narrowly divided Senate, where stand-alone export legislation is unlikely to advance and supporters are mulling an array of strategies — and potential deals — to advance their cause some other way.

Related: Five options for getting crude export bill to president’s desk

In the 261-159 House vote Friday, 26 Democrats joined 235 Republicans to support the legislation, which would undo 40-year-old trade restrictions that block most raw, unprocessed U.S. crude from being sold outside the country. Nine Democrats abstained. Six Republicans voted no, including some with home-state refining interests: Michael Fitzpatrick of Pennsylvania, Walter Jones of North Carolina, Frank LoBiondo of New Jersey, Patrick Meehan of Pennsylvania, Tom Rice of South Carolina, and Chris Smith of New Jersey.

Oil producers that have been aggressively lobbying for the change and their allies on Capitol Hill had hoped to line up even more Democratic support, in hopes of building a veto-proof majority, bolstering the bill’s bipartisan credibility and boosting pressure on the Senate to act.

But a White House veto threat earlier this week stiffened the resolve of some Democrats who were under intense pressure to vote “aye.” And at least two previously supportive Democrats — Texans Gene Green and Eddie Bernice Johnson — said they wanted more safeguards before such a dramatic rewrite of U.S. oil trade policy.

Read more: Green presses for safeguards in oil export bill

Bill sponsor Joe Barton, R-Ennis, insisted that some of the “no” votes came from lawmakers who were “very close” to supporting the legislation and ultimately could be persuaded to back exports if needed to override President Barack Obama’s threatened veto. A two-thirds majority — or 290 votes in the House — are required to override a presidential veto.

“We didn’t get the veto override votes but we got close enough to it that we can be optimistic,” Barton said. “The vote today gives us reason for optimism because 60 percent of the House was in support of this” and that’s the same margin needed in the Senate.

Oil export advocates cast the trade restrictions as a relic of the 1970s — when an OPEC crude embargo prompted gasoline lines and rationing in the United States — and said it doesn’t mesh with today’s surging domestic production.

Barton insisted that exporting crude would deliver big economic and national security benefits to the entire country.

“It’s not Big Oil” that benefits, he said, “it’s everybody in this country.”

But opponents said unfettered U.S. crude exports would come at the expense of some domestic refineries that can buy discounted American oil today.

The longstanding oil trade restrictions apply to raw, unprocessed crude — not the gasoline, diesel and other petroleum products that refineries churn out and sell globally.

Some Democrats opposed to wider oil exports stressed that current policy still allows some U.S. crude to be sold to foreign buyers. For instance, there are exceptions for oil shipments to Canada and some crude extracted in California and Alaska.

Rep. Kathy Castor, D-Fla., said the legislation would “eviscerate” a “smart policy” that has governed foreign sales of an important commodity.

“It’s not a ban,” said Rep. Kathy Castor, D-Fla. Current policy “allows and promotes oil exports to strategically important allies, to places in the national interest . . . but now Big Oil wants free rein to ship natural resources to countries not in our national interest.”

A last-minute controversy over maritime spending proposed in the bill may have siphoned off some Republican support.

The provision would authorize $500 million in additional federal dollars to go to the Maritime Security Program, which pays a stipend to U.S. flag ships willing to be used by the Defense Department in an emergency.

Conservative groups objected to the measure — slipped in by Republican leaders in a bid to win over some Democrats supportive of the maritime sector and its unionized workforce.

An amendment by Rep. Justin Amash, R-Mich., to strip out the provision was rejected, with 306 lawmakers voting to keep the maritime security language in place.

Oil industry leaders were celebrating the House vote Friday, which follows nearly two years of lobbying for crude exports.

“Today’s vote shows that bipartisan momentum is stronger than ever,” said Jack Gerard, president of the American Petroleum Institute. “We are eager to see this bill taken up in the Senate, where members of two committees have already endorsed efforts to lift the 1970s-era ban on crude exports.”

The legislation faces an uncertain future in the Senate, where Republican leaders may be less than eager to bring up polarizing bill without confidence they can secure 60 votes to beat back any filibusters and pass the measure, much less the 67 they would need to override a presidential veto.

That has supporters mulling an array of other options, including embedding oil exports in unrelated must-pass legislation to fund the government or highway spending around the country.

Other proposed deals include axing some oil industry tax breaks and expanding renewable energy incentives.

Rep. Earl Blumenauer, D-Ore., made a pitch for a comprehensive approach Friday.

“What we could do is provide a benefit to the large oil companies as part of a larger package that would help everybody,” he said.”Let’s put together a package that speaks to alternative energy, that speaks to conservation, that speaks to a long-term strategy that is a win win.”

Under one recently floated possibility, crude exports could be tethered to a reauthorization of the Land and Water Conservation Fund, a 50-year-old program funded by offshore oil and gas revenue that is the main source of money for land acquisition by four federal agencies. The program, which expired in September, provides matching grants to help states build outdoor recreational facilities and buy new lands and waters for recreation.

Related: Conservationists push White House to postpone Gulf drilling auction

Some oil export advocates are wary of cutting any deals on the legislation — particularly compromises that renew renewable energy tax credits — because a new president could lift the trade restrictions without help from Congress. Several Republican presidential candidates support crude exports.

Some of the proposed compromises could siphon off Republican support for the export bill — a risk highlighted by the controversial addition of maritime security language to the House measure this week.

“A good, strong bipartisan vote in the House for lifting the export restrictions should now not be diluted by anyone agreeing to a smorgasbord of unrelated energy provisions being advanced by our friends on the political left,” said Stephen Brown, vice president of governmental affairs for San Antonio-based refiner Tesoro. “That would be the quickest way to take support for the legislation to active opposition.”

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