A budget deal that’s heading for final action Friday includes a provision that could create international demand for American oil — and help make the case for building rail-to-ship export terminals on the West Coast.
The fiscal package includes a repeal of the 40-year-old ban on exporting domestically produced oil. The spending bill is seen as vital to avert another government shutdown and to keep many popular tax breaks and spending programs in place.
Sen. Jeff Merkley, D-Ore., said that could be a deal-breaker for him when the package is up for a Senate vote.
“I am strongly leaning towards voting against it to draw attention to this egregious provision,” Merkley said in an interview.
Oil train traffic from the Bakken region of North Dakota to refineries in Washington has increased in recent years. That traffic, which rolls through the Columbia River Gorge, could increase more if the Northwest's seven proposed rail-to-ship terminals are built. The largest is proposed in Vancouver, Washington.
Currently that petroleum could only be transported to U.S. refineries. But opponents say lifting the ban on exporting crude oil would be a game-changer for those proposed terminals.
“The dismantling of a 40-year-old national policy to support energy independence could trigger a tsunami of crude oil moved by train or pipeline, increasing the risks of local fires and spills,” said the Seattle-based think tank the Sightline Institute in a statement criticizing the impending congressional action.
U.S. Rep. Peter DeFazio, D-Ore., on Wednesday announced the Government Accountability Office will investigate the capacity of emergency responders to handle rail accidents involving oil trains.
Republicans in Congress called a lift of the crude oil export ban “a win.”
The ban was adopted in 1975. Back then, Americans faced rising prices and long lines at gas stations because of an embargo by foreign oil producers. The ban on U.S. oil exports was seen as a way to put the country on “the road to energy independence,” as President Ford said when he signed the Energy Policy and Conservation Act.
Merkley said lifting the oil export ban creates an incentive for more oil production in the U.S. and undermines the country’s credibility on climate change abroad.
Other lawmakers chose to focus on other elements in the spending package.
Sen. Maria Cantwell, D-Wash., sent out a press release touting the package’s tax credits for wind and solar, but said nothing about the lift of the crude oil export ban. Her office did not immediately respond to requests for comment.
“By extending the wind and solar tax credits, we continue to support investments in clean energy technology in the United States and 21st century job growth, while reducing our carbon footprint,” Cantwell's press release said.
The fiscal package would extend tax credits for biodiesel, solar and wind. The credits would receive five-year extensions, bridging the gap until the implementation of the Clean Power Plan in 2022 and will then phase down over a period of several years. Stock prices for Solar City, a leader in the solar industry, rose more than 30 percent Wednesday after the budget deal was announced.
The budget deal also would extends the Land and Water Conservation Fund, which some environmental groups in the Northwest had rallied behind when it was at risk of running out of money.
Eric de Place, Sightline’s policy director, said the renewable energy incentives do have some environmental benefit.
“But it’s inappropriate to think that they somehow offset giveaways to the oil industry, like dismantling the export ban,” he added.
Reporter Ashley Ahearn spoke with OPB All Things Considered host Kate Davidson about what lifting the ban on U.S. crude oil exports could mean for the Northwest.