[Congressional Record Volume 161, Number 89 (Thursday, June 4, 2015)]
[Senate]
[Pages S3766-S3767]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
OIL EXPORTS
Ms. MURKOWSKI. Mr. President, when we talk about national security
issues and the vulnerabilities we have as a nation, I can think of no
other area where we face such challenges and yet such opportunities
when it comes to our energy assets and how we can utilize our energy
policies at their intersection points with our national security
policies.
The inability of the United States to export oil is a vulnerability
to our nation. At a time when we have risen to be the world's top
producer of oil, our outdated 1970s-era ban on oil exports is causing
us to miss out on a significant economic- and security-related
benefits.
The good news is we can change this. It is within our power to change
this, and that is why I have come to the floor this afternoon.
Here is a fact: The United States is the only advanced Nation that
prohibits crude oil exports. We are the only one. Countries such as
Australia, Denmark, Norway, the United Kingdom, Canada, and even New
Zealand all allow for both imports and exports, just like the normal
trade in any other commodity. It is distinctly weird that we would
prohibit our own exports.
We are also in a position where our friends and our trading partners
are openly asking us for assistance. They are coming to us and saying:
Hey, can you help? We are your friends. We are your allies. You have
the resources.
The world has changed dramatically. We have new alliances. We have
new threats. We have new hopes. We have new fears. It is my own hope
that while the world may have changed, our Nation's role as a global
leader has not eroded. This is an area where we have an opportunity to
prove it has not eroded.
Our energy renaissance is a new thing, and sometimes it takes time to
understand the implications of new things, of changes, but here is
where we have been. We have already held about half a dozen hearings on
the topic of oil exports in the House and in the Senate since last
January. I introduced this subject last January 2014, and I said at
that time that 2014 was going to be the year of the report, where we
would seek out the experts, we would ask the think tanks to weigh in on
this issue, and so they did. The reports that came out were numerous,
they were considered, they were thoughtful, and they were all very
helpful. Reports came out of the Brookings Institution, Columbia
University, the Center for a New American Security--too many to even
list here. The individual experts who are in favor of allowing oil
exports are also quite impressive. These are people whom we look to for
leadership in a host of different areas.
There was a piece in the Wall Street Journal that I ask unanimous
consent be printed in the Record, penned by Leon Panetta and Stephen
Hadley, the Defense Secretary in the Obama administration and the
National Security Advisor in the Bush administration. They wrote a
piece that was entitled ``The Oil-Export Ban Harms National Security.''
It is well-founded, well-written, and to the point.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Wall Street Journal (Opinion) May 19, 2015]
The Oil-Export Ban Harms National Security
The U.S. is willfully denying itself a tool that could prove vital in
dealing with threats from Russia, Iran and others
(By Leon E. Panetta and Stephen J. Hadley)
The United States faces a startling array of global
security threats, demanding national resolve and the resolve
of our closest allies in Europe and Asia. Iran's moves to
become a regional hegemon, Russia's aggression in Ukraine,
and conflicts driven by Islamic terrorism throughout the
Middle East and North Africa are a few of the challenges
calling for steadfast commitment to American democratic
principles and military readiness. The pathway to achieving
U.S. goals also can be economic--as simple as ensuring that
allies and friends have access to secure supplies of energy.
Blocking access to these supplies is the ban on exporting
U.S. crude oil that was enacted, along with domestic price
controls, after the 1973 Arab oil embargo. The price controls
ended in 1981 but the export ban lives on, though America is
awash in oil.
The U.S. has broken free of its dependence on energy from
unstable sources. Only 27% of the petroleum consumed here
last year was imported, the lowest level in 30 years. Nearly
half of those imports came from Canada and Mexico. But our
friends and allies, particularly in Europe, do not enjoy the
same degree of independence. The moment has come for the U.S.
to deploy its oil and gas in support of its security
interests around the world.
Consider Iran. Multilateral sanctions, including a cap on
its oil exports, brought Tehran to the negotiating table.
Those sanctions would have proved hollow without the surge in
domestic U.S. crude oil production that displaced imports.
Much of that foreign oil in turn found a home in European
countries, which then reduced their imports of Iranian oil to
zero.
The prospect of a nuclear agreement with Iran does not
permit the U.S. to stand still. Once world economic growth
increases the demand for oil, Iran is poised to ramp up its
exports rapidly to nations whose reduced Iranian imports were
critical to the sanctions' success, including Japan, South
Korea, Taiwan, Turkey, India and China. U.S. exports would
help those countries diversify their sources and avoid
returning to their former level of dependence on Iran.
More critically, if negotiations fail, or if Tehran fails
to comply with its commitments, the sanctions should snap
back into place, with an even tighter embargo on Iranian oil
exports. It will be much harder to insist that other
countries limit Iranian imports if the U.S. refuses to sell
them its oil.
There are other threats arising from global oil suppliers
that the U.S. cannot afford to ignore. Libya is racked by
civil war and attacks by the Islamic State. Venezuela's
mismanaged economy is near collapse.
Most ominous is Russia's energy stranglehold on Europe.
Fourteen NATO countries buy 15% or more of their oil from
Russia, with several countries in Eastern and Central Europe
exceeding 50%. Russia is the sole or predominant source of
natural gas for several European countries including Finland,
Slovakia, Bulgaria and the Baltic states. Europe as a whole
relies on Russia for more than a quarter of its natural gas.
This situation leaves Europe vulnerable to Kremlin
coercion. In January 2009, Russia cut off natural gas to
Ukraine, and several European countries completely lost their
gas supply. A recent EU ``stress test'' showed that a
prolonged Russian supply disruption would result in several
countries losing 60% of their gas supplies.
Further, revenue from sales to Europe provides Russia with
considerable financial resources to fund its aggression in
Ukraine. That conflict could conceivably spread through
Central Europe toward the Baltic states. So far, the trans-
Atlantic alliance has held firm, but the trajectory of this
conflict is unpredictable. The U.S. can provide friends and
allies with a stable alternative to threats of supply
disruption. This is a strategic imperative as well as a
matter of economic self-interest.
The domestic shale energy boom has supported an estimated
2.1 million U.S. jobs, according to a 2013 IHS study, but the
recent downturn in oil prices has led to massive cuts in
capital spending for exploration and production. Layoffs in
the oil patch have spread outward, notably to the steel
industry. Lifting the export ban would put some of these
workers back on the job and boost the U.S. economy.
Why, then, does the ban endure? Habit and myth have
something to do with it. U.S. energy policy remains rooted in
the scarcity mentality that took hold in the 1970s. Even now,
public perception has yet to catch up to the reality that
America has surpassed both Russia and Saudi Arabia as the
world's largest producer of liquid petroleum (exceeding 11
million barrels a day). The U.S. became the largest natural
gas producer in 2010, and the federal government will now
license exports of liquefied natural gas.
The fear that exporting U.S. oil would cause domestic
gasoline prices to rise is misplaced. The U.S. already
exports refined petroleum, including 875,000 barrels a day of
gasoline in December 2014. The result is that U.S. gasoline
prices approximate the world price. Several recent studies,
including by the Brookings Institution, Resources for the
Future and Rice University's Center for Energy Studies,
demonstrate that crude oil exports would actually put
downward pressure on U.S. gasoline prices, as more oil supply
hits the global market and lowers global prices.
Too often foreign-policy debates in America focus on issues
such as how much military power should be deployed to the
Middle East, whether the U.S. should provide arms to the
Ukrainians, or what tougher economic sanctions should be
imposed on Iran. Ignored is a powerful, nonlethal tool:
America's abundance of oil and natural gas. The U.S. remains
the great arsenal of democracy. It should also be the great
arsenal of energy.
Ms. MURKOWSKI. It said directly: We keep this ban in place, this
decades-
[[Page S3767]]
old ban. It hurts us as a nation. It harms us from a national security
perspective, not to mention the benefits that oil exports will provide
when it comes to increased production and increased jobs benefits to
our economy.
There are other folks out there who have also weighed in. Larry
Summers, formerly the Treasury Secretary for President Clinton and also
Director of the National Economic Council for President Obama, said
this about lifting the ban on oil exports: ``The merits are as clear as
the merits with respect to any significant public policy issue that I
have ever encountered.'' This is a guy many people looked to for
leadership in a host of different areas. The merits are as clear as the
merits with respect to any significant public policy issue he has
encountered.
Tom Donilon, formerly the National Security Advisor to President
Obama, has said that allowing exports ``will increase diversity of
supply, increase competition, reduce volatility and lower prices in
global markets.''
The questions we needed to ask about oil exports have been asked, and
answered favorably. Independent experts have studied what would happen
if we lift the ban and almost universally encouraged us to move forward
to lift this outdated, outmoded policy.
This is not a partisan issue. My colleague from North Dakota is on
the floor today. We have introduced bipartisan legislation to remove
this ban. This is something which is simply in the best interest of the
United States, both in terms of our economic strength and in terms of
our national security.
I am here today to tell our colleagues, to repeat and remind our
colleagues that the time to legislate on oil exports is now. I think
the bill we have in front of us, the National Defense Authorization Act
being led by our friend and colleague from Arizona, is the perfect
vehicle on which to advance this. Therefore, I ask unanimous consent to
call up and make pending my amendment No. 1594, related to crude oil
exports.
Mr. President, I withhold the request to make this amendment pending
at this point in time, but if I may proceed to speak to three quick
components to the amendment.
The first requires the Department of Energy to assess the impact that
lifting sanctions on Iran would have on global oil markets. We would
likely see higher Iranian oil exports, even as American producers are
prohibited from accessing global markets. So our friends in Japan,
India, South Korea, and elsewhere would continue importing from Iran,
in part because they cannot get the crude oil from us. They cannot
import from us. That situation is simply unacceptable. We would be
lifting sanctions on Iranian oil while maintaining them on American
oil.
I have made this point and I have repeated it before: Leaving in
place the oil export ban on U.S. producers while at the same time
sanctions are relieved on Iranian producers effectively sanctions U.S.
oil production.
There was an article in Reuters this week that revealed that India is
now importing record volumes of oil directly from Iran. Another from
May showed record oil exports out of Iraq to global markets. Yet
another shows the highest volumes of oil exports from Saudi Arabia in
10 years. So the fact is that we are simply not competing.
The second component of my amendment says that 30 days after
completion of this report, all U.S. crude oil may be exported on the
same basis as the regulations and law currently allow for exports of
petroleum products. Today, we can export gasoline, we can export
diesel, we can export jet fuel--really, any refined product we can
export without a license--but we cannot export crude oil. It does not
make sense, and it is high time we resolve that inconsistency.
The third component of my amendment preserves the authorities of the
President to block exports during emergencies, during a national
security crisis, and so forth.
So what we have done is we have borrowed language on these
authorities directly from the legislation from 20 years ago that
authorized oil exports from Alaska's North Slope, which was a measure
that passed the Senate on a bipartisan vote, 74 to 25, and was signed
into law by President Clinton. What we had over 20 years ago was an
overwhelmingly favorable vote well before this American energy
renaissance began.
I find the whole idea that oil exports would still be prohibited a
little mind-boggling. The Commerce Department keeps a list of
commodities that are in short supply. They call this the short supply
controls. Historically, these controls were generally not blanket
prohibitions; they were on items such as aluminum, copper, iron and
steel scrap, diamond bort and powder, nickel selenium, and the polio
vaccine--not blanket prohibitions, just bits of them. Only three items
remain on the short supply controls list. One of them--you guessed it--
is crude oil, the second is western red cedar, and the third is horse
for slaughter. There is also a small caveat here that prohibits exports
from the Naval Petroleum Reserves, but, really, the list is pretty
short. There are three things: crude oil, western cedar trees, and
horse for slaughter. Clearly our policy needs to be modernized.
We see many parts of the world in a state of unrest. Many parts of
the world are seemingly on fire. America and American energy need to be
ready to render vital assistance to our friends who are counting on us
to demonstrate that global leadership. This is our chance, and I look
forward to further discussion on the floor as we move this NDAA measure
forward.
I encourage colleagues to look at this amendment, look at the merits
of the reports that have gone down in the past year, and look to
updating this very outdated policy that is holding us back as a nation.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Kansas.
Mr. ROBERTS. Mr. President, I thank the Senator from Alaska for her
remarks. Please count me in. It is very timely and extremely important.
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