U.S. Oil Export Ban Repeal Seeks Direction

U.S. senators who want to reverse the ban on oil exports are struggling to find wide legislation to attach their bill to, a sign that their effort to overturn the trade restriction could face difficulties.

Senator John Hoeven, a Republican of North Dakota, the top U.S. oil-producing state besides Texas, said on Tuesday a measure to repeal the legislation would likely have to be attached to a wider bill.

Adding the measure to a bill to renew a decades-old law regulating toxic chemicals would be a "good bet," Hoeven said at a National Journal panel, because that bill is popular with both Democrats and Republicans.

But Senator Tom Udall, a New Mexico Democrat and a co-author of the Toxic Substances Control act, wants his bill to move swiftly. Udall is discouraging lawmakers from adding amendments that are not germane to the control of toxics, his spokeswoman told Reuters.

Oil producers say the exports ban, passed by Congress 40 years ago after the Arab oil embargo, has to be lifted to keep the U.S. drilling boom alive. Opponents say the ban ensures jobs for refinery workers and ship builders and lifting it could be bad for the environment.

The full House of Representatives is likely to vote on a similar bill in coming weeks, with the chamber's energy panel expected to easily pass the bill this Thursday.

The White House said on Tuesday President Barack Obama, a Democrat, does not support the House bill advanced by Joe Barton, a Texas Republican.

Some proponents of ditching the ban have said that oil exports could be traded for provisions that environmentalists want, namely extensions of tax breaks for wind and solar power.

But Senator Ed Markey, a Massachusetts Democrat and a staunch opponent of reversing the ban, said such a deal would only make sense if the breaks were permanently extended for renewable energy sources, since a repeal of the export ban would also be permanent. And coal, natural gas and oil interests would not likely allow that to happen, he said.

"Those concessions ... as long as Republicans control both the House and Senate are pretty much non-existent," Markey said at the panel.

Hoeven said he believes every Senate Republican would vote for the legislation, meaning that about seven Democrats would be needed to secure passage. One Democrat, Heidi Heitkamp, also of North Dakota, is a staunch supporter of killing the export ban.

But it will be a fight to find several more Democrats, an analyst said. "Democrats aren't going to agree to lift the ban unless Republicans are in a deal-making mood, and there is little evidence this is the case," said Corey Boles an analyst at the Eurasia Group, a political risk research company, in a note to clients.

Later on Tuesday, a spokesman for Hoeven said the senator is looking at options other than the toxics bill, "but we need to see how the floor schedule works out and what makes the most sense."

A spokesman for Senator Lisa Murkowski, an Alaska Republican and sponsor of a bill to repeal the ban, had no comment about what legislation the measure could be attached to.

The Eurasia Group estimated there is only a 30 percent chance the ban would be lifted this year. Next year it would be even harder for Congress to pass a bill during an election year, Boles said.

Reporting by Timothy Gardner