The calls to lift the 40-year-old ban that keeps U.S. companies from exporting crude oil have grown louder, but it appears the Obama administration may not be that interested in repealing it.
And that may mean lifting the ban — described by a former administration official as a decision that is “clear” and “easy” — may not happen until President Obama leaves office in January 2017.
“In a situation where we still import 7 million barrels of crude oil per day, I don’t think an overly compelling argument has been made on the basis of pragmatic economics,” U.S. Energy Secretary Ernest Moniz said while attending an energy conference in Houston in April.
“It sounds like (the Obama administration is) starting from a position of maintaining the status quo, rather than looking for a reason to change things,” said Sam Margolin, lead analyst for refining and marketing at Cowen and Company, an investment banking firm based in New York City.
The ban can be lifted by the executive branch, but it can also be repealed by congressional action, which tells Margolin the political clock is ticking.
“We think the export ban has a better chance to be repealed in 2015 than 2016 because 2016 will be an election year,” Margolin said at the Platts Rockies and Oil and Gas Conference in Denver last week. “We see continued paralysis on this issue.”
U.S. oil producers are pushing hard on Capitol Hill to repeal the ban, but even some of the ban's harshest critics acknowledge the Obama administration appears to be tapping the brakes.