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 In testimony submitted ahead of a Senate energy committee hearing
on U.S. crude export policy, the Pentagon's former undersecretary of
defense for policy, Michele Flournoy, argues "policymakers in the
United States should embrace these various benefits to our allies
and ourselves and liberalize our crude export rules.
"Market conditions merit such a step and security dividends will not
be fully realized without it,” said Flournoy, co-founder of the
Center for a New American Security.
A host of economic and geopolitical factors, from plummeting oil
prices, near-capacity storage facilities and sanctions against Iran
and Russia, are forcing both sides of the debate to address
strategic questions.
"Members of Congress are starting to focus on this issue in a big
way," said George Baker, executive director of Producers for
American Crude Exports - a group representing independent companies
demanding an end to the export ban.
He said the possibility of using oil exports to address policy on
Iran or Russia is now invoked in his discussions on Capitol Hill or
with the Obama administration.
 "The notion of selling oil into the international market comes up
frequently," Baker said.
On the other hand, oil refiners keen to prevent producers from
sending crude overseas counter that market realities limit the
strategic benefits of exports.
"The case that the U.S. can enhance its geopolitical stance is
incredibly overstated," said Jay Hauck, executive director of
Consumers and Refiners United for Domestic Energy, a lobby group for
east coast and Texas refiners.
CRUDE argues that, instead of bolstering America's global standing,
they expect most U.S. crude oil to be exported to China, rather than
European allies.
"I think we have consumers on our side and a lot of business sectors
who have benefited from lower oil prices," he said. "We keep
reminding Congress of that."
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Most observers see the push for changes to the decades-old ban as a
long game, with Congress continuing to debate the issue in hearings
and lawmakers floating bills to test the appetite for change.
The ban on unprocessed crude was introduced following the 1973 oil
shock, although U.S. laws currently allow exports of refined
products such as gasoline and diesel.
Some argue that strategic factors should not override other
concerns.
The American Fuel & Petrochemical Manufacturers, a trade group that
supports lifting the ban, said "a decision should not be made in a
vacuum," but as part broader reform of energy and shipping policies.
Some major oil companies want Congress or the administration to act
on exports immediately.
“We’ve got to gain some traction this year. Certainly as we go into
an election year, it becomes harder,” said Ryan Lance, chief
executive of ConocoPhillips, in Washington last week.
Lance will testify at Thursday's hearing.
(Reporting By Valerie Volcovici; additional reporting by Timothy
Gardner; Editing by Bruce Wallace)
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