There’s a narrative of inevitability that supporters of ending US restrictions on crude exports are touting these days. It goes like this:
There’s a narrative of inevitability that supporters of ending US restrictions on crude exports are touting these days. It goes like this:
A string of events is steadily building momentum for the end of the ban. Last year, the US Department of Commerce began allowing the export of lightly processed condensate, providing an outlet for millions of barrels of Eagle Ford crude since. Next, the Obama administration allowed for crude swaps between the US and Mexico, another step toward opening the taps. And now, this week, a Department of Energy study says exports would boost US production and possibly lower gasoline prices.
But expectations that the tide is turning and an end to export restrictions is near may not be such a sure thing.
Both permitting the export of lightly processed condensate and allowing the light-for-heavy crude swap with Mexico were done under processes that have long been part of the existing crude restrictions. Before now, companies simply never applied to export using those provisions because the economics did not make sense.
The two decisions may have provided a relief valve to the pressure for ending the export ban, giving a number of companies new markets for the lighter crudes that have made up the majority of the US production boom.
And when allowing for the light/heavy crude swap with Mexico, the administration made sure to simultaneously reject similar swap requests with other countries, making it clear companies should not get any creative ideas about stretching the rules.
Even if the impending end to Congress’ summer break has whipped up enthusiasm for ending the ban, the prospects are still daunting when it comes to vote counting. Export proponents would need to get 60 votes in the Senate to avoid a filibuster and get a bill through the Senate. They would need 67 votes in the Senate to override a veto. To avoid the filibuster Republicans will need the support of at least six Democrats. Senators Joe Manchin (D-West Virginia) and Heidi Heitkamp (D-North Dakota) support lifting the export restrictions, but finding the four remaining votes will be more challenging.
One possible route to lifting the ban comes from Senate minority leader Harry Reid (D-Nevada), who last month began floating the possibility of a compromise deal that could include an extension of federal tax credits for wind and solar energy. But such a compromise would be a hard swallow.
"Republicans that took that deal would have to be furiously drunk," Republican strategist and energy lobbyist Michael McKenna said. "For Republicans to be in favor of these is essentially being in favor of the president's carbon rule."
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