Climate

The Oil Industry Is About To Get A Big Gift From Congress

CREDIT: AP Photo/Paul Sakuma

U.S. refineries say they will take a hit if the oil export ban is lifted.

When Congress emerges on the other side of the annual scrum of budget-building, the oil and gas industry is poised to pick up a major win. The decades-old oil export ban — which was developed to protect American consumers and support energy independence — is unlikely to survive into the new year.

The ban is expected to be lifted in a rider attached to the omnibus spending bill — which is stuffed annually with environmental cuts and attacks that can’t otherwise get passed — due Friday. Environmentalists and consumer advocates have largely come down against lifting the ban, which they say will increase fossil fuel extraction in the United States and raise oil prices for American consumers.

“This will certainly lead to more drilling,” Radha Adhar, a federal policy representative for the Sierra Club, told ThinkProgress. Oil Change International, an anti-fossil-fuel group, estimated that lifting the ban will result in 476,000 more barrels per day by 2020. The American Petroleum Institute (API), which is pushing for a lift to the ban, came up with 500,000. In a political landscape where different interests can come up with very different estimates, it is telling that the two groups converged closely.

According to a report from the Center for American Progress, repealing the ban would result in an additional 515 million metric tons of carbon pollution each year — roughly equal to 108 million more passenger cars or 135 coal-fired power plants. The increase in extraction — primarily expected to come from fracking — will be accompanied by an increase in transportation from the oil fields to the coast, which means more pipelines and more oil trains, which pose additional environmental threats.

And the increased production won’t make the United States any more energy independent. In fact, American oil refineries are expected to take a hit, as much of the oil will be shipped overseas. Overseas refineries are cheaper — and less-regulated — than American ones. Rory Houseman, a spokesman for United Steelworkers, told ThinkProgress that domestic refineries need the export ban to stay competitive while still complying with clear air regulations. “One of the reasons they have been able to afford [clean air regulations] is the oil export ban,” Houseman said in October.

Whether it is due to the knowledge that the United States will have less dependable access to oil — or fears that exposing U.S. oil to the global market will push up consumer prices — the American public is not in favor of lifting the ban. A poll by the Center for American Progress last year found that 80 percent of Americans don’t think Congress should allow oil exports.

But that’s not to say that there are no winners if the ban gets lifted.

“Big Oil is going to get $22 billion in profits because of this. Twenty-two billion. It’s absolutely crazy,” Adhar said. “These people are destroying our democracy — they are behind every environmental attack we have to defend against, and the idea of giving them more power is untenable, I think, especially when it comes at the expense of consumers and the environment.”

The federal Energy Information Administration estimates that by 2025, the oil industry will make $170 billion from the ban’s repeal.

A bill to repeal the ban passed in the House earlier this fall and is now in committee in the Senate.

Some major think tanks and economic studies have suggested that lifting the oil export ban would have negligible environmental impacts and positive economic ones. A scathing post by experts at the Brookings Institution called into question analysis to the contrary and defended the oil industry’s environmental record.

“In terms of environmental impacts, Congress should be aware that oil producers in the United States have a long history in petroleum development and extensive experience complying with U.S. environmental requirements,” they write.

The authors found significant economic benefits from lifting the ban and disagreed that the ban had a meaningful climate impact. “If Congress truly wants to address climate change, then it should adopt appropriate climate policies that address emissions across sectors,” they write.

Meanwhile, a report released today by the Public Accountability Initiative (PAI) specifically tied the lead author of the Brookings’ study to the oil industry.

Overall, the PAI report found that of the think tanks that have pushed for a repeal of the ban, every one that discloses its funders had donations from ExxonMobil, Chevron, ConocoPhillips, and Shell.

“These think tanks’ push seems to be one part of a multifaceted effort by oil industry lobbying groups to repeal the ban,” Robert Galbraith, a research analyst at PAI, said in an emailed statement to ThinkProgress.