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White House threatens to veto oil export bill

From The San Antonio Express-News

The Obama administration on Wednesday threatened to veto legislation that would allow energy companies to freely sell U.S. crude around the world.

The measure, teed up for House floor debate and votes later this week, is a top priority for oil companies fighting to dismantle a 40-year-old prohibition on exporting most U.S. crude.

But in a formal “statement of administration policy,” the White House’s Office of Management said “legislation to remove crude export restrictions is not needed at this time.”

If President Barack Obama were presented with the legislation, “his senior advisers would recommend that he veto the bill,” the OMB said.

“Congress should be focusing its efforts on supporting our transition to a low-carbon economy,” the office said. “It could do this through a variety of measures, including ending the billions of dollars a year in federal subsidies provided to oil companies and instead investing in wind, solar, energy efficiency and other clean technologies to meet America’s energy needs.”

The White House’s opposition was expected, after press secretary Josh Earnest told reporters in September that the Obama administration could not support the legislation that would effectively remove the Commerce Department’s role in vetting proposed crude exports. But it was not clear how aggressively the White House would oppose the export bill.

The White House’s statement against the export bill could stiffen the resolve of some Democrats — including lawmakers from Texas — who were leaning toward a “no” vote but facing intense pressure to support liberalized crude trade.

The longstanding export ban blocks most U.S. crude from being sold to foreign buyers, with exceptions for some oil extracted in Alaska and California as well as shipments to Canada (though those transactions still require government licenses).

The Commerce Department’s Bureau of Industry and Security can approve licenses for proposed oil exports if it determines they are “consistent with the national interest.” Some U.S. crude — such as oil extracted from the outer continental shelf or carried through pipelines crossing federal land — can only be exported with a presidential finding they are in the national interest.

The House bill, sponsored by Rep. Joe Barton, R-Ennis, would effectively do away with those requirements by blocking any government official from imposing or enforcing any restriction on crude exports.

The measure would still allow the president to block exports amid “any unusual and extraordinary threat to the national security, foreign policy or economy of the United States.” The president also would have the power to halt those foreign oil sales amid times of short supply or for national security and foreign policy reasons.

That presidential backstop was created by Rep. Gene Green, D-Houston, who won its adoption when the exports bill was considered by the House Energy and Commerce Committee last month.

U.S. oil producers have been aggressively lobbying for the freedom to sell their crude around the globe, arguing that the trade restrictions unnaturally constrain domestic production and suppress the price they can fetch for the commodity.

Some domestic refiners, such as Valero Energy Corp., have been fighting to preserve the current policy, which only applies to raw, unprocessed crude and not petroleum products such as the gasoline, diesel and jet fuel they sell to buyers worldwide.

Barton’s bill has 16 Democratic cosponsors but is largely championed by Republicans in the House, who argue that oil exports could boost domestic crude production and the jobs tied to the activity.

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