The legislation (HR 702) also includes a provision to increase funding for the 60 ships in the Maritime Security Program from $3 million to $5 million.
The U.S. House of Representatives approved a bill to allow crude oil exports from the U.S. Friday by a vote of 261-159. If passed, the legislation would also increase funding for the ships in the Maritime Security Program from approximately $3 million to $5 million per ship.
According to the legislation (HR 702), “The United States has enjoyed a renaissance in energy production, establishing the United States as the world’s leading oil producer.
“By authorizing crude oil exports, the Congress can spur domestic energy production, create and preserve jobs, help maintain and strengthen our independent shipping fleet that is essential to national defense, and generate State and Federal revenues.”
The legislation was supported by group such as the American Petroleum Institute, which contends “additional crude oil exports could help increase supplies, put downward pressure on the prices at the pump and create more jobs right here at home. Access to customers abroad could drive significant new investment in U.S. production, helping to strengthen our energy security. Now that the U.S. is poised to become the world’s largest oil producer, the economic case for exports is clear.”
“America has steadily increased its crude oil production over the past decade, and in 2015, the country is projected to produce over 85 percent more crude oil than it did in 2008. The United States is currently the world’s largest oil producer, including crude oil as well as liquids separated from natural gas,” said API, citing research from Bank of America.
The bill also contains a provision to increase funding to the Maritime Security Program that provides a stipend to 60 U.S.-flag ships. Groups such as the Heritage Foundation have said there was a need for further justification of an increase in the MSP stipend, which helps offset the higher cost of operating ships unde the U.S. flag with U.S. crews.
In an article published last week in the The Hill newspaper, the presidents of four maritime union leaders – Marshall Ainley, of the Marine Engineers’ Beneficial Association, Paul Doell of the American Maritime Officers, Donald Marcus of the International Organization of Masters, Mates & Pilots, and Michael Sacco of the Seafarers International Union – said allowing U.S. crude oil exports and authorizing increased funding for the MSP, “will keep our nation secure, grow our economy and help our global allies and trading partners across the world.”
They said a “2006 report by the National Defense Transportation Association – Military Sealift Committee found that it would cost $13 billion for the government to replicate the vessel capacity provided by MSP. The U.S. Transportation Command estimated it would cost an additional $52 billion to replicate the global intermodal systems made available to the DOD by MSP contractors. “
Congressman John Garamendi, D-Calif., ranking member of the Coast Guard and Maritime Transportation Subcommittee and a supporter of the U.S. merchant marine, voted against the bill, while expressing support for the MSP provision. He was opposed to allowing to allow unfettered foreign exports of American domestic crude oil, saying it presented a “shocking break from precedent by not requiring the crude oil to be transported on U.S.-flag vessels.”
“With this bill, the oil companies win and the American people lose,” said Garamendi. “Selling American crude overseas will create big profits for the oil industry, which wasn’t willing to cut into its projected $29 billion in additional earnings to ensure our U.S. Merchant Marine would also be allowed to flourish. What’s more, the bill would harm American jobs in the domestic refining industry, and could even raise prices for gasoline and jet fuel here at home.”
Garamendi outlined amendments for the bill that would have required the use of American ships and mariners, protected domestic refining jobs, and safeguarded everyday Americans against higher fuel prices, but said these amendments were not taken up because of strong opposition from the oil industry.
House passes bill to allow crude oil exports from U.S.
