President Obama gave the oil industry and Republicans a gift when he agreed to lift sanctions on Iran as part of its deal over its nuclear program — a new line of attack for ending the 40-year-old ban on crude oil exports.
Republicans have increasingly said that ending restrictions on Iran's oil sector, effectively allowing it to resume exporting to the global market, is unfair when the United States prohibits domestic producers from selling abroad. House Speaker John Boehner became the latest to support lifting the ban Wednesday, referring to Iran in the process.
"If the administration wants to lift the ban for Iran, certainly the United States should not be the only country left in the world with such a ban in place," the Ohio Republican said at a Capitol Hill press conference.
With the window for legislative action closing as the calendar flips to 2016, a presidential election year that will stop contentious policy battles, proponents of ending the ban needed something extra to push the issue closer to a vote.
More Republicans have been warming to the idea, and Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski, R-Alaska, is angling for a fall vote. She plans to mark up her bill to end the ban and expand offshore drilling before the Senate adjourns next week.
The Iran deal presented an opportunity, industry officials said. Many saw it as a way to bring skeptical Republicans and Democrats on board.
"I think that right now, when I say our plan — it's not like there's any coordinated plan but I think everyone gets the importance for Murkowski ... that we have to exploit the Iran thing as much as possible," Dave Banks, a former Capitol Hill aide who is now executive vice president with free-market group American Council for Capital Formation, told the Washington Examiner.
Until Iran became an issue, export supporters had tried making the case that U.S. production was stalled because a glut at refineries was depressing oil prices, in turn discouraging new drilling. Exporting crude would eliminate that problem, allowing producers to fetch higher prices. In turn, they said, gasoline prices would fall as more global supplies bring down international oil prices, and therefore the price of gasoline, which is traded globally. For many Americans, though, that's hard logic to follow.
But opponents, including independent refiners and some Democrats, say the Iran argument is bogus, not to mention the idea that exports would lower gasoline prices. Detractors, who note that the U.S. still imports about one-third of the oil it consumes, say what Iran does has no bearing on U.S. oil companies and that those making a connection between the two are being politically opportunistic.
"That to me is not the real issue. It's a sound bite," June DeHart, a lobbyist with Manatt, Phelps & Phillips who is representing refining companies opposed to ending the ban, told the Examiner. "Sen. Murkowski knows the Iran deal is a flash point for many members, so she wants to link them and create a fairness argument."
Not all Republicans are on board. House Energy and Commerce Chairman Fred Upton, R-Mich., hasn't endorsed ending the ban, though he recently has spoken favorably about it. And Sen. John Hoeven, R-N.D., told the Examiner last week that a few in his caucus are still "maybes." Some GOP lawmakers are skittish that voters would sack them if gasoline prices rose following a repeal of the ban.
The oil industry and it congressional allies, though, believe the Iran factor can push the foreign policy-minded Republicans and even a few Democrats that eventual Senate passage would require toward supporting oil exports.
"That may tip some Dems over to the right side of this," Kyle Isakower, vice president of regulatory and economic policy with the American Petroleum Institute.
Several lobbyists and oil and refining companies met Thursday with House Republicans including Majority Whip Steve Scalise of Louisiana, Joe Barton of Texas, Kevin Cramer of North Dakota and Democrats Collin Peterson of Minnesota and Henry Cuellar of Texas to press for action.
Scalise on Monday dispatched his team to get a head count on the idea of lifting the ban. Setting that groundwork indicates a fall vote, the timing suggests that lawmakers might use the August recess to address the issue with hesitant constituents, Cramer told the Examiner.
Barton, who is sponsoring a bill with 110 cosponsors, 13 of whom are Democrats, told the Examiner that a "supermajority" of Republicans support scrapping the policy. When asked what big issues came up in the conversations, Barton said the first thing was, "We're about to let the Iranians export oil again. So if you're going to let the Iranians, why not let the Americans?"
Export ban opponents note they have work to do, especially among Democrats. Cuellar told the Examiner that he is focusing on centrist Democrats and ones from oil-producing regions. Peterson, the ranking member on the House Agriculture Committee, is working his cohorts from rural districts. The Iran issue keeps emerging in those talks, Cuellar said.
"I think there's a couple more that might be able to sign up hopefully, maybe, today," Cuellar said of Democrats.
Cramer said the count was "very strong," but noted that there are still "some pockets of uncertainty," such as in districts with more refineries than oil producers.
Refineries would be among the most hurt by lifting the ban. They have enjoyed a windfall during the domestic drilling boom because supply gluts have depressed crude prices that they use as an input for petroleum products they make, like gasoline, which don't face export restrictions.
Independent refineries have resisted an end to the ban. They released a study this week through the CRUDE Coalition that said lifting the ban would raise gasoline prices. It was cited by Sen. Robert Menendez, a New Jersey Democrat, whose state is host to a number of refineries, in a Senate Banking Committee hearing on the export ban.
Menendez, like many other Democrats, opposes lifting the ban for fear of a gasoline price spike. Usually more hawkish than his caucus colleagues, Menendez also refuted the idea that ending the restrictions provided geopolitical benefits.
"I oppose lifting the ban, but if you told me that as a national security opportunity, that we could help our national security — let's say that we wanted to keep the sanctions on Iran — and Japan and South Korea and our allies needed our oil, that we could direct it to them, that might be an opportunity to consider. But that's not the marketplace as it is right now," Menendez said at the hearing.