The US Senate on Thursday defeated a proposal to ban exports of crudecarried by the proposed Keystone XL pipeline and any petroleum productsrefined from that Canadian oil.
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Senators voted 64-34 against the amendment offered by Senator Ron Wyden,Democrat-Oregon. It fell far short of the 60 votes needed to pass.
Senator John Hoeven, Republican-North Dakota, said Wyden's measure wasdesigned to kill the project. He said banning exports would jeopardize jobsin the US refining sector and made little economic sense.
"The reality is there are refined products that we don't even use inthis country," Hoeven said on the Senate floor. "There isn't the demand or wecan't use them. So now if the refineries can't sell those products, they'vegot to recoup that revenue stream, don't they?"
Gasoline prices would go up even further, Hoeven said.
Hoeven has his own Keystone XL amendment up for vote Thursday as part ofa major highway bill. That measure would give Congressjurisdiction over TransCanada's controversial Alberta-to-Texas pipeline.
President Barack Obama rejected an application for the 1,700-mileproject in January. TransCanada plans to go forward with a southern sectionfrom Oklahoma to Texas and said it would reapply for a permit to cross theUS-Canada border within weeks.
Wyden's failed ban would have given the president four grounds forallowing exports: national security reasons, after a natural or manmadedisaster, if he finds that exports "will not diminish the total quantity orquality of petroleum available in the United States," or if he finds thatexports serve the national interest.
Wyden said Keystone XL supporters have made domestic energy security thecenterpiece of their fight for the pipeline's approval. He said he proposedbanning exports to hold them to those claims.
GULF COAST REFINERS' ADVANTAGE OVER NORTHERN TIER CITED
"Contrary to the assertion by the pipeline backers, more supply fromCanada does not automatically mean more US supply and lower prices to for USconsumers, especially when the evidence indicates that that supply is goingto be hard-wired by the pipeline to world prices and world markets once itreaches the Gulf of Mexico," he said.
Wyden added that Keystone XL would exaggerate the advantage Gulf Coastrefineries have over those in the Northeast and Midwest, leading to higherprices for gasoline and heating oil in those regions.
"You're going to see this energy used in the export market," he said."That might be good for the Chinese. But the evidence indicates it wouldproduce higher prices for Americans."
Charlie Drevna, president of the American Fuel & PetrochemicalManufacturers, urged House lawmakers Wednesday to avoid tinkering withexports. He called Gulf Coast refineries the most efficient, complex andcompetitive in the world, leaving them poised to benefit from Keystone XL'snew supplies.
Like Hoeven, Drevna warned that such restrictions would raise gasolineprices.
"If artificial and counterproductive restrictions were to be placed onthese exports, American refineries would be forced to produce less gasolinefor American consumers, because the physical properties of crude oil requireus to manufacture, on average, one gallon of diesel for every two gallons ofgasoline that we produce," he said. "It would be absurd and make no economicor business sense to produce products that cannot be sold."
Tyson Slocum, director of consumer rights group Public Citizen's energyprogram, called the pipeline irrelevant in debates about gasoline prices anddomestic energy security.
"The pipeline is designed to import Canadian crude, refine it, thenexport the US-refined gasoline and diesel for sale to other countries, apass-through that would do nothing for American consumers," Slocum said.
--Meghan Gordon, email@example.com