A news hit for Colorado’s junior Sen. Cory Gardner from the trade journal Hellenic Shipping News, a story titled Oil Producers Face Skeptical Congress in Drive to End Export Ban:
Coming into this year, it seemed that the time was right to overturn a ban on exporting U.S. crude oil: Republicans controlled Congress, production was nearing an all-time high and gasoline was falling toward $2 a gallon.
Despite a lobbying push by drillers, and steep job losses in the oil fields, there’s been no significant effort in Congress to lift the 40-year-old ban. Even the Senate’s top advocate for the idea hasn’t proposed legislation…
The reason for the go-slow approach is wariness among lawmakers that they’d be blamed if gasoline prices climb after the ban is lifted. And the oil industry itself is split, with some refiners, who benefit from low prices, opposed to lifting the ban. Oil produced domestically is selling for about $9 less than the global benchmark.
Yesterday, the Senate Energy and Natural Resources Committee, on which Sen. Gardner serves, held a hearing on the subject of lifting the ban on crude oil exports. Going into the hearing, Gardner was reportedly “undecided” about whether to support lifting the ban, but his reported comments certainly indicate where he’s leaning:
Two members of the panel, Senator Joe Manchin, a West Virginia Democrat who often sides with Republicans on energy issues, and Senator Cory Gardner, a Colorado Republican, said they were still undecided on the issue.
Gardner said it may make sense to sense to send some of the light sweet crude produced from shale rock formations overseas, because U.S. refiners along the Gulf Coast can better handle heavier crudes. [Pols emphasis]
Sounds pretty supportive to us! And an energy industry press release after yesterday’s hearing praises Gardner’s “insightful question” that teed up the industry’s argument perfectly:
“Colorado Senator Cory Gardner asked an insightful question yesterday about what happens if we don’t lift the ban,” said Eberhart. “We will have a glut of crude with nowhere to go. Oil and gas companies will no longer have an incentive to keep producing, so we’ll start losing jobs. The current shale boom has helped create 1.7 million of them.”
Consumers are plowing their savings from cheap gasoline right back into the economy all around the country, helping boost economic growth. The full reasons for the current rock-bottom price of oil are more complicated than simply the “shale revolution,” most importantly the price war initiated by foreign oil producers intended to make North American shale production from “fracking” unprofitable. The industry wants a “price floor” to ensure their operations remain profitable, and the ability to export crude oil would raise prices at least by the difference between the American and global market price–and possibly much more, depending on what OPEC does.
And once the price of oil starts going up again as it surely will, American consumers would feel the pain even more. This is where politicians with the authority to decide these questions must face the hard reality of choosing between their oh-so friendly allies and donors in the energy industry…and the rest of the economy.
Gardner may pay lip service to being deliberative about this, but where he’ll land in the end is unfortunately a foregone conclusion.