A key House panel on Thursday approved legislation to end the 40-year federal ban on exports of US crude oil, and the bill is expected to win further approval in the House and Senate before being passed on to the White House.
The House [1]Subcommittee on Energy and Power approved by a voice vote [2]HR-702, which revokes the crude export ban provision in the 1975 [3]Energy Policy and Conservation Act.
That 1975 statute and its ban on crude exports came in the wake of the 1973 Arab-Israeli War and the Arab oil-producing nations' boycott on selling crude to the US.
Advocates of HR-702 argued that as the US is now among the top oil-producing nations in the world, the export ban no longer makes sense.
In addition to revoking the 1975 statutory ban on crude exports, the bill provides that "no official of the federal government shall impose or enforce any restriction on the export of crude oil".
HR-702 also orders the Department of Energy to conduct on study on whether the US Strategic Petroleum Reserve ([4]SPR) is still a valid precaution and, if so, what its size and composition should be.
The SPR also was a legislative child of the Arab oil embargo, being established to provide a buffer against any future oil embargo. The SPR holds about 700m bbl of crude.
The American Petroleum Institute ([5]API) was quick to welcome the subcommittee's vote of approval, with vice president Louis Finkel saying that an end to the ban "will put downward pressure on fuel costs, create US jobs and improve our ability to compete with other suppliers, like Iran and Russia".
Finkel noted that with Iran seemingly poised to resume exporting its crude oil supplies, "this bill puts US producers on a level playing field".
The Institute for Policy Innovation ([6]IPI), a free-market think tank in Irving, Texas, also welcomed the subcommittee vote, noting that President Barack Obama's pending nuclear deal with Iran will allow that country to resume crude exports "while the US remains in an export freeze".
HR-702 now awaits a vote by the full House Energy and Commerce Committee, although approval there is virtually assured. If approved, the bill would be up for a full House floor vote.
A similar bill was approved by the Senate Energy and Natural Resources Committee in late July, and that measure now awaits a full Senate floor vote.
Assuming that both the Senate and House approve legislation ending the ban on crude exports, the measure would need Obama's signature to become law.
Sources say that several key advisors close to Obama have expressed support for ending the ban, suggesting that the president would approve the bill once it gets to his desk.
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