[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producer of oil, our outdated 1970s-era ban on oil exports is causing 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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