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 It had become apparent to Senate Democratic Majority Leader Reid
that lifting the longstanding ban on U.S. oil exports was the
Republicans' top priority as the two sides tried to find common
ground. And while Reid knew scrapping the ban had little support
among his own colleagues, he also saw trading it as a chance for
Democrats to score some victories.
The Republicans saw freeing crude exports as "something they wanted
to do for the oil industry ... for me it was a way of trying to do
some other things," Reid told Reuters last week in his office in the
Capitol.
Reid, 76, was elected to the Senate in 1987 and will not seek
re-election in November. "I thought, well, maybe this is an
opportunity to do something good about things I've never been able
to accomplish."
Both Republicans and Democrats claimed victories in the $1.8
trillion budget passed by Congress and signed by President Barack
Obama on Friday. For Reid, that ranged from tax breaks for families
to billions of dollars in new spending for medical research.
But in agreeing to vote for a deal that killed the oil export ban,
the Democrats extracted unprecedented five-year extensions to
renewable energy tax credits that expired last year for wind, and
were due to expire in 2016 for solar.
The extensions provide Democrats and Obama ammunition in their
strategy to reduce carbon emissions and temper climate change.
Investors in renewables said they needed certainty about subsidies
if the sector was to secure a greater share of the energy market.
At the start of weeks of secretive budget talks among congressional
leaders, Senate Republican Leader Mitch McConnell told Reid that
lifting the 40-year-old ban, a relic Congress passed after the Arab
oil embargo led to panics over fuel supplies, was the prize he
wanted most.
McConnell wanted to lift the ban in an earlier transportation bill
but couldn't get enough Democratic support. And Obama opposed
freeing exports without winning a major concession that would offset
criticism that sending U.S. crude abroad conflicted with its agenda
to fight climate change.
But McConnell found a receptive, if unlikely, ally in Reid. The
Nevada native was sympathetic to plight of drillers dealing with a
glut of domestic crude choking the oil boom, and to the concerns of
fellow Senate Democrats, Heidi Heitkamp, from North Dakota and Joe
Manchin from West Virginia, who badly wanted the ban lifted.
That's where Reid's experience with renewable power entered the
equation. Nevada has the country's third-highest capacity of
installed solar power per capita, and Reid sponsors an annual clean
energy summit in Las Vegas. Last August, he toured a Tesla <TSLA.O>
battery plant that gets power from the Nevada sun.
Reid and House Democratic Leader Nancy Pelosi explained to
Republicans McConnell and House Speaker Paul Ryan what they would
have to win for oil exports.
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Ryan's willingness to negotiate was a major element in the unusually
cooperative tone that characterized this year's budget talks, Reid
said.
A tumult in global oil markets helped the political case for lifting
the ban. The domestic shale oil boom helped lead to a collapse in
global crude prices. Resulting low prices for gasoline evaporated a
major worry many Democrats had about exports: that they could be
blamed by voters one day if fuel prices at the pump spiked upward,
for whatever reason.
Reid didn't get everything he wanted. Many Democrats tried to insist
on permanent or at least 10-year extensions of the clean power tax
breaks.
But conservative oil magnates Charles and David Koch lobbied
Republicans against accepting the tax breaks.
And there were other budget items Reid and his colleagues were
forced to surrender. The compromise failed to get wide-ranging
support for Puerto Rico, which is wrestling with $72 billion in
debt.
But Reid did get a permanent extension for three major tax breaks
for families: a stronger earned income credit for the poor, a
childcare credit, and a college credit.
Democrats also got $2 billion for medical research at the National
Institutes of Health and research money for oceans and climate.
Those wins and others were enough for Pelosi to gloat that Democrats
walked away victorious. "Republicans wanted Big Oil so much that
they gave away the store," she told reporters last week.
For his part, Reid affected more subdued pleasure at what had been
accomplished.
"The things in that omnibus ... are really, really very important
for our country," he said, striking a consensual tone he hoped could
lead to cooperation next year over legislation on issues such as
parity in women's wages and protections for the middle class.
(Additional reporting by Richard Cowan and Susan Cornwell; Editing
by Kevin Drawbaugh, Bruce Wallace and Alan Crosby)
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