The House of Representatives voted Friday to reverse a 40-year-old ban on oil exports, giving major oil companies a political victory at a time when they are suffering from lower oil prices and falling profits.
The House vote of 261-159 included 26 Democrats in favor of the legislation. But even though the legislation has gained momentum in recent weeks, it continues to face a major challenge in the Senate, as well as the threat of a White House veto.
Still, the House vote makes it more likely that the export ban, which was enacted in the 1970s when the U.S. economy was threatened by international oil embargoes and falling domestic production, will become an important issue in the presidential election campaign.
Jack N. Gerard, chief executive of the American Petroleum Institute, praised the bill as a job creator.
“American producers would be able to compete on a level playing field with countries like Iran and Russia, providing security to our allies and accelerating the energy revolution that has revitalized our economy,” he said.
Opponents say lifting the export ban could raise gasoline prices, an assertion contested by many energy experts and economists, since increased U.S. supplies on world markets could bring global prices down at least a bit. Others, including Energy Secretary Ernest Moniz, say the immediate impact of lifting of ban would be limited since the global oil markets are glutted.
“Every American household is saving $700 or more this year from lower fuel prices because refiners are passing on savings to U.S. consumers,” said Jay Hauck, executive director the Crude Coalition, a lobbying group led by several refiners who profit from the low price of domestic oil, which is their principal raw material.
The Obama administration has been tinkering with the ban, and it recently gave oil companies temporary permission to export a limited amount of oil to Mexico. The administration has also allowed the export of a limited amount of extra-light oil, which comes out of the shale fields of Texas and several other states.
The Obama administration has been reluctant to lift the export ban entirely, in part because environmentalists say it would encourage more petroleum development and hydraulic fracturing at a time when the nation should be moving away from fossil fuels to curb climate change.
The debate has been spurred by nearly a doubling of domestic oil production over the last five years, reducing imports and expanding inventory reserves across the country. But production is now suddenly dropping, and oil producers have been forced to cut tens of thousands of jobs.