Policy: Environment & Energy

Sen. Lisa Murkowski wants to end ban on crude oil exports

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Sen. Lisa Murkowski, R-Ak., called for ending the federal ban on crude oil exports Tuesday, saying that current regulations were designed in an era of "scarcity" and that maintaining them would stifle domestic production.

"The current system is inefficient and may lead to supply disruptions that we can ill afford," she said during a speech at the Brookings Institution. "Lifting the ban will send a strong signal to the energy markets that as a nation we're serious, we are serious as a country, about our emerging role as a major hydrocarbon producer."

The comments come as debate is heating up over the four-decade-old export ban, as repeal advocates argue the U.S. should ship some of its booming production abroad.

The oil industry has begun pushing to end the ban, noting that the International Energy Agency has predicted U.S. will become the world's top oil producer by next year. And Energy Secretary Ernest Moniz said last month that the policy could use another look.

But supporters of the ban say the U.S. would be dealing away long-sought freedom from relying on less-friendly nations for oil, and some have raised concerns about the impact on domestic gas prices. Some refineries also might take a hit, as export of refined petroleum products, which is allowed, is thriving.

Murkowski, the top Republican on the Senate Energy and Natural Resources Committee, said she believes the Obama administration has the authority to lift the ban on crude oil and condensate — a byproduct from producing natural gas — though she left open an option for advancing legislation.

The administration could end the ban in one of two ways: President Obama can rule doing so is in the national interest; or the Commerce Department, which oversees crude oil exports, can determine that domestically produced crude cannot be reasonably marketed in the U.S.

Murkowski argued that Commerce can do that now because U.S. refineries are not equipped to process the light, sweet crude that's a product of the shale energy boom, saying "there will come a time ... when we will have an unsustainable glut of this light crude."

"I do think we get to a point where it is this mismatch," she said. "We're not able to gain alignment because we cannot continue with the retrofit of these refineries. We've got to be honest with our ability to bring new refineries online."

The American Petroleum Institute, which also wants to end the ban, has said much of the same, calling refinery upgrades financially unrealistic.

While Murkowski said the administration holds the key to policy changes, she also noted that the slow pace of Energy Department approvals for liquefied natural gas facilities, which she said must quicken, has created some uncertainty among investors.

With that in mind, she said she might work "on two fronts" — one of prodding the administration, the other through legislation.

Still, Murkowkski noted that Congress already is in "full campaign season," which she said would present obstacles to passing bills.

"When that happens, it's just more difficult to advance legislation," she said. "I'm trying to be practical about where we are."

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