An end to the ban on U.S. crude oil exports appears increasingly likely to be included in the sweeping fiscal deal being negotiated this week in Congress.
Lifting the decades-old export ban has been a top energy priority for Republicans for more than a year, and the GOP is eyeing the must-pass government funding and tax policy bills as prime places to address the issue.
Leaders in both parties and both chambers have been working on the bills, and Democrats, viewing the ban as a valuable bargaining chip, are demanding plenty in return.
“It’s an act of desperation on their part, they want it so desperately,” said House Minority Leader Nancy Pelosi (D-Calif.), saying she could see a scenario in which she would support lifting the ban.
At the top of their wish list is the extension of federal tax credits for renewable energy generation. But, signaling that might not be enough to satisfy Democratic demands, lawmakers have put forth additional trade-offs they want in exchange for lifting the ban.
“It clearly is an item that [Senate Majority Leader Mitch] McConnell and Republicans are salivating over,” Senate Minority Whip Dick Durbin (D-Ill.) told The Huffington Post. “It would be a windfall to the industry. We don’t know how much some have estimated — $20 [billion], $30 billion a year in profits if they are allowed to do this.”
While lawmakers wouldn’t discuss the specifics of what’s being negotiated, they said talks have largely centered on how long the renewed tax incentives for wind and solar power would last.
Some Democrats’ requests are stout: Sen. Ed Markey (D-Mass.), a liberal who has opposed expanded oil exports, said 10 years should be the minimum under discussion. Others, though, have discussed two or five years.
Republicans have publicly balked at the demands. Senate Majority Whip John Cornyn (R-Texas) told The Hill that Democrats are asking too much, and haven’t brought down their requests by enough.
Sen. Tom Carper (D-Del.), meanwhile, is throwing another proposal into the mix with his idea that certain oil refiners — who are likely to see reduced profits if oil exports are allowed and domestic prices increase as a result — should get tax credits in the deal.
“There are negotiations to make sure that the unintended consequences to dozens of refineries across the country are avoided,” he said. “The idea is that if the oil export ban is going to be lifted, we want to be sure there’s no collateral damage to refiners in this country.”
Cornyn said Carper “upped the ante” with that idea, and that he has “serious concerns” about it.
Congress’s top appropriators were tight-lipped about the negotiations Thursday. Democrats, with the help of the White House, sent an offer to the Republicans late Wednesday, and Rep. Hal Rogers (R-Ky.), chairman of the House Appropriations Committee, said he was reviewing it.
Sen. Barbara Mikulski (Md.), top Democrat on the Appropriations Committee, called the GOP’s latest offer and its oil exports provision “lavish.”
“We made a counteroffer to their overreach,” she said. Asked what Democrats would trade for oil exports, she said only “a lot.”
Rep. Nita Lowey (D-N.Y.), Mikulski’s House counterpart, said she’d be willing to accept oil exports only if “everything that’s bad, all the poison pills” were taken out of the spending bill, including restrictions on Syrian refugees and on financial regulations.
Rep. Kevin Cramer (R-N.D.), a top support of oil exports, said he’s confident that the ban will be lifted, either through the spending bill or the tax bill, but he admitted that Republicans would pay a hefty price for it.
“From everything I’ve heard, it’s going to be a high price, and we’ll swallow it if we need to, I guess,” he said.
The White House, while generally opposed to lifting the export ban, wouldn’t say Thursday whether it would veto a spending or tax package that included the measure.
“I know there is some suggestion that it may be added to the omnibus [government spending bill] and I’ve been pretty rigorous about not walking through all the things that are going to lead to a veto or not of the overall omnibus,” White House press secretary Josh Earnest said.
“I’ve said that we’d take a look at what Republicans put forward. But our position on that particular policy proposal hasn’t changed.”
Some opposition on the left remains entrenched. Markey and other liberals have said they’re not willing to back lifting the ban unless Republicans are willing to yield on major expansions of clean energy tax credits, something the GOP hasn’t so far been interested in doing.
Green groups also say that no exchange should be good enough to lift the export ban, considering the global warming they say would accompany it.
“To be clear, there is no conceivable ‘deal’ that would be sufficient for our organizations to withdraw our objections to lifting the crude export ban,” 18 groups wrote in a letter this week.
“Specifically, suggestions that include extending clean energy tax incentives in exchange for lifting the ban are particularly untenable. Continued investment in renewable electricity must not come at the cost of the very climate gains we hope to achieve from their expansion.”
The tax credits themselves are a principal aspect of the discussions over federal tax policy. The wind energy tax credit expired last year, and the credit for solar energy is due to expire at the end of 2016.
While many lawmakers have looked to phase them out quickly, the incentives remain popular among most Democrats, and some Republicans are willing to keep them on the books, raising the prospects that they could trade the tax credits for oil exports.
Export supporters are increasingly hopeful that lawmakers will get the 40-year-old ban lifted as part of a spending deal. Rep. Bill Flores (R-Texas), who has backed the measure in the House, said this is “absolutely” the best shot they’ve had at ending the ban.
“I’m pushing to keep it in,” he said. “We’ll just have to see if it’s going to make it or not. I think it will. It’s bipartisan. It makes sense.”
Jordan Fabian contributed.