What Iran deal could mean for US ban on oil exports

A bipartisan effort to lift the 40-year-old ban on US crude exports could see more momentum following the nuclear agreement with Iran.

Steven Senne/AP Photo/File
Yosef Wolday fills his car with fuel at a gasoline station, in Brookline, Mass. in this April 29, 2014 photo. The recently announced Iran nuclear agreement could have long-lasting effects on the global oil market – and has provided an opening for or bipartisan efforts to end a 40-year ban on most US oil exports.

In the wake of a historic agreement with Iran, a bipartisan push to lift the decades-old ban on US oil exports may be gaining traction in Congress.

Crude oil prices tumbled after Iran and six world powers, including the United States, announced a deal Tuesday that would curb Tehran’s nuclear program in exchange for an easing of US and EU economic sanctions on Iran.

The shift in the world market, along with a recent surge in domestic energy production, has provided an opening for bipartisan efforts to end a 40-year ban on most US oil exports, in “a quest that’s become a cause célèbre among energy-state legislators from Texas to North Dakota,” Jared Gilmour wrote for The Christian Science Monitor.

Opponents of the 1975 oil exports ban have portrayed it as a relic of a bygone era, created in response to the 1970s energy crisis. Today, the US is competing with Russia and Saudi Arabia as the world’s top energy producer, and advocates, both in Washington and in the oil and gas industry say ending the ban could help boost US production.

In May, Senate Energy Committee Chair Lisa Murkowski (R) of Alaska and Sen. Heidi Heitkamp (D) of North Dakota introduced a bill to lift the ban, with Sen. Heitkamp – the bill’s only Democratic co-sponsor – calling the restriction “as outdated as the typewriters on which the policy was written.”

“It’s past time for an upgrade,” she said in a statement.

According to industry projections, allowing US producers to sell oil on the global market could lead to tens of thousands of jobs and billions of dollars in additional GDP. The Iran deal could reinforce that argument, experts say.

“What this means in terms of foreign policy may actually provide additional incentives. Especially if, as we see, the oil price will come down a bit,” Jamie Webster, senior director at the energy analysis giant IHS, told Politico ahead of Tuesday’s agreement.

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Indeed, Sen. Murkowski in late June issued a statement on the nuclear pact that pointed to the irony of allowing Iran access to markets that the US does not have. “Any deal that lifts sanctions on Iranian oil will disadvantage American companies unless we lift the antiquated ban on our own oil exports,” she said.

Still, not everyone is convinced that lifting the ban is either necessary or desirable.

Environmentalists argue it would encourage more US oil extraction, including fracking, which they say endangers local environments and increases greenhouse gas emissions.

Others say that although the US is producing more energy than ever before, it has not yet achieved energy independence. Exporting oil would result in billions of barrels more annually from other countries and would pose a greater national security risk, Jay Hauck, executive director of the CRUDE coalition, told Fox News on Friday.

“Pro-ban supports would like to make it cut and dry, but it’s a very complicated issue,” Mr. Hauck said. “It’s an onion, and you have to peel away the layers.”

Still others wonder what real effects lifting the ban on crude exports would have on “the notoriously unpredictable world market,” the Monitor’s Mr. Gilmour wrote, as well as on US gasoline prices.

Nonetheless, Rep. Kevin Cramer (R) of North Dakota, who is co-sponsoring bills by Texas Republican Reps. Joe Barton and Mike McCaul that seek to lift the ban and that combined have about 10 Democratic co-sponsors, said he feels positive about the push to end restrictions.

“I’m optimistic about our efforts,” he told Fox News. “We have bipartisan support and a broad understanding of the issue among members.”

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