Senate Panel OKs Crude Oil Export Bill With Dim Future

The Senate Banking committee approved a bill to lift a 40-year-old ban on crude oil exports Thursday, but a last-minute amendment altering the Iran nuclear agreement makes the bill veto-bait.

The committee was divided along partisan lines, 13-9. Sen. Heidi Heitkamp (D-N.D.), a co-sponsor of the bill, was the lone Democrat who did not dissent.

Repealing the 1970s legislation would pave the way for U.S. crude oil to be sold on international markets. The Senate bill allows for suspensions in cases of trade restrictions and national security concerns. It also gives the president limited authority to impose licensing requirements in certain emergencies and during supply shortages.

Chairman Sen. Richard Shelby (R-Ala.) told the committee that overturning the export ban as quickly as possible is critical. “If we keep the status quo, we risk curtailing the economic growth and job creation afforded by this industry,” he said.

But opponents say repealing the ban would lead to an increase in oil prices and be harmful to the environment. Committee ranking Democrat Sen. Sherrod Brown (D-Ohio) said the bill is a “step backward in our march toward greater energy independence.”

“A narrow plan that simply opens the gates to unlimited crude exports will not grow the clean energy economy we need, or lay the foundation for long-term effective action on climate change,” he said.

Sen. Elizabeth Warren (D-Mass.) delivered a scathing criticism of the research and motives behind the bill. “If the oil industry’s rosy projections turn out to be wrong, the bill has next to nothing in the way of environmental or economic protections,” she said. “The most obvious effect of lifting the crude oil export ban would be to produce enormous profits for a number of big oil companies.”

Opponents may be reassured by the fact that the bill’s prospects are very uncertain, largely thanks to a provision added during the committee vote.

The committee approved an amendment, proposed by Sen. Patrick Toomey (R-Pa.), which requires Iran to pay all outstanding court judgments to American victims of terrorism, before lifting oil export sanctions.

This is seen as a “poison pill” which could kill the bill. President Obama has already said he would veto similar legislation because it contradicts the Iran nuclear deal. On Wednesday, the White House reiterated that it did not support the bill. This, combined with the dearth of Democratic support, means it now looks like the bill is unworkable.

This is disappointing development for many Republican members. Up to this point, there had been hopes that the bill could be tied to the Toxic Substance Control Act reform bill, or TSCA, which could be on the Senate floor as early as next week. Earlier this month, Sen. John Hoeven (R-N.D.) said he was “pushing very hard” to pair the two bills, which he said were a “very good fit.”

There is growing momentum behind the bid to overturn the crude oil export ban, mostly among Republican ranks. Senate Majority Leader Mitch McConnell said earlier this month that he plans to negotiate with the White House for a way to lift the ban.

Bob Corker (R-Tenn.) was among the Senators who expressed his frustration with the Iran amendment Thursday. “I still think we’re advancing the ball but this bill isn’t going to be the vehicle,” Corker said.