WASHINGTON, June 9, 2015 - Senate Energy Committee Chair Lisa Murkowski, R-Alaska, opened her fourth and final hearing on comprehensive energy legislation Tuesday by promising that ending the 1970s ban on U.S. crude oil exports will create “more jobs, more revenues, more production, more security, and more diplomatic leverage on the international stage.”

To back up her point, Murkowski released a Senate Energy Committee staff report on “Rendering Vital Assistance: Allowing Oil Shipments to U.S. Allies.” The 20-page report concludes that:

  • “. . . full statutory repeal of U.S. oil export restrictions remains the most effective way of allowing domestic producers to access global markets.”
  • “Many U.S. allies and trading partners are interested in purchasing American oil to diversify away from Russia, Iran, and other problematic sources.”
  • “Allowing such shipments would send a powerful signal of support and reliability at a time of heightened geopolitical tensions in much of the world.”
  • “The mere option to purchase U.S. oil would enhance the energy security of countries such as Poland, Belgium, the Netherlands, India, Japan, and South Korea, even if physical shipments did not occur.”

Murkowski also delivered a strong pitch for approving her proposed legislation, S. 1312, the Energy Supply and Distribution Act of 2015, to remove the ban on crude oil exports. House Agriculture Committee Chairman Mike Conaway, R-Texas, has introduced matching legislation in the House, H.R. 2369. The two bills would end the export ban in order to “promote the efficient exploration, production, storage, supply, and distribution of energy resources.”

Murkowski explained that ending the outdated U.S. ban would benefit all states, not just Alaska and other oil producing states. Karen Harbert,president and CEO of the Institute for 21st Century Energy, agreed. She pointed out that as part of the nationwide supply chain, “every state has an equity in getting this done and benefiting from the jobs, the revenue, and the investment.”

In contrast to Murkowski’s focus on boosting U.S. oil and natural gas production and exports, Committee Ranking Member Maria Cantwell, D-Wash., focused instead on the need to increase federal funding for Department of Energy (DOE) research programs – and the need to strengthen rather than weaken the ability of federal energy market regulators “to protect consumers from market manipulation.” She warned that some unnamed House members “would actually roll back important consumer protections.”

Cantwell called for tripling federal funding for energy research. She pointed out that “the federal commitment to energy research development and deployment (RD&D) is less than one-half of 1 percent of what consumers in this nation spend in energy costs.”

Cantwell charged that just when the U.S. needs to increase research to keep up with other countries and to diversify U.S. energy sources, “The House recently passed a version of the America COMPETES legislation that would actually cut ARPA-E(Advanced Research Projects Agency-Energy) research funding in half.” She warned that “our colleagues in the House seem intent on rolling back the clock, in a way that seriously undermines our nation’s long-term competitiveness.”

Another call to greatly increase federal research funding came from Norman Augustine, a Bipartisan Policy Center board member, co-chair of the American Energy Innovation Council, former undersecretary of the Army, and former Lockheed Martin CEO.

“Private companies cannot capture the full economy-wide value of new knowledge and thus systematically underinvest in research and development relative to the benefits it produces,” he told the committee. “Public investment has been critical to generating the discoveries and inventions that form the basis of previous disruptive energy sources, be that commercial nuclear power, jet engines, shale gas, or solar photovoltaic technology.”

Augustine warned that “Markets will undoubtedly drive innovation, but U.S. businesses will only win the global, increasingly competitive race for energy technology leadership when supported by public innovation investments.” He said the shortfall in federal research spending in recent years means that “America now ranks 29th among developed nations in the fraction of research that is governmentally funded” and that within five years China may “surpass the U.S. in research funding as both a fraction of GDP and in absolute terms.”

Augustine said “I’m not a fan of heavy government involvement in the free enterprise system.” But singling out key research proposals from the 42 bills which the Energy Committee considered in its hearing this week, Augustine supported S. 784, S. 1033, S. 1187, S. 1229 and S. 1259 which would boost research efforts.

Pointing to past successes for Department of Energy federal research including 3D seismics, horizontal drilling and hydraulic fracking, Augustine said a renewed commitment to federal research programs is needed when “China is about to pass us in both research intensity and the value of research and we spend more on potato chips in this country than we spend on clean energy research.”

Augustine concluded that rather than continue to starve research programs, “we could triple what we invest in energy research and it would barely show in the overall federal budget.”

Department of Energy (DOE) Under Secretary for Science and Energy Lynn Orr testified that DOE research is focused on achieving “a low carbon future” and on “reducing U.S. reliance on oil, saving American families and businesses money, creating jobs, and reducing pollution.” He said “The need for action is urgent as the impacts of climate change threaten our economy, environment and national security,” and that DOE wants “to ensure that the low carbon technologies of today and tomorrow are invented and manufactured in America.”

Sen. Al Franken, D-Minn., pointed to the benefits enjoyed today as a result of federal investments in developing hydraulic fracturing, or fracking. He said today’s challenge is to focus on new “game-changing technologies.” He said his bill being considered by the committee, S. 1256, the Advancing Grid Storage Act, is aimed at developing energy storage to support renewable sources like wind and solar “to give utility customers more control over their energy use.” Orr added that storage could become “a very important contributor to a stable grid.”

In contrast with Franken’s pitch for renewables, Sen. Cory Gardner, R-Colo., called for rolling back federal regulations to allow greater production from fracking and Sen. Steve Daines, R-Mont., called for more use of coal.

Manhattan Institute for Policy Research Senior Fellow Mark Mills testified that coal remains the cheapest way to generate electricity and that DOE should focus not on renewable energy but on unleashing “the other 95 percent” that current fracking technology leaves in the ground.

Tuesday marked the fourth and final hearing on legislative proposals for possible consideration as part of Murkowski’s broad energy bill that will pull together legislative proposals under four general titles – efficiency, infrastructure, supply, and accountability.




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