U.S. Refiners Oppose Linking Subsidies to Repeal of Oil Export Ban

Source: By Timothy Gardner, Reuters • Posted: Wednesday, October 21, 2015

WASHINGTON — The top U.S. oil refiner industry group told Senate Majority Leader Mitch McConnell on Tuesday it opposes any subsidies for renewable energy or other interests that would be potentially included in a package to lift the ban on most exports of domestic oil.

“I respectfully ask that you oppose any effort to provide subsidies, impose new mandates, or layer on more energy taxes to facilitate lifting the crude oil export ban,” Chet Thompson, the head of the American Fuel & Petrochemical Manufacturers, wrote in a letter to Senator Mitch McConnell, a Kentucky Republican.

The AFPM does not oppose lifting the ban, but believes Congress should lift other “market distorting policies” such as the renewable fuel standard that requires the blending of ethanol and biodiesel into gasoline, and the Jones Act which requires cargo between domestic ports to be transported by U.S.-built and -flagged ships, said the letter, a copy of which was obtained by Reuters.

The letter shows the difficulty of reaching a deal in the Senate on lifting the trade restriction. A bill to lift the ban passed in the House, but the White House has threatened to veto it.

Backers of repealing the 40-year-old ban on U.S. crude oil exports in the Senate need at least six Democratic senators order for a bill to pass. At the moment, they only have one who has voted for legislation in a committee, Senator Heidi Heitkamp, from oil-producing North Dakota.

Some backers have said that including sweeteners in the legislation, such as a permanent tax breaks for wind and solar power, could help win more Democratic support.