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Ship Owners Get Sweetener in Push to Pass Oil Export Bill

October 7, 2015

Oil companies including Chevron Corp., Encana Corp., and Continental Resources Inc.have for more than a year been urging Congress to lift the ban. They argue that allowing oil exports would eliminate market distortions, create jobs and stimulate more U.S. petroleum production, which has increased 80% since 2008 and has helped drive down the global price of oil to half what it was in summer 2014.

Some refineries with business primarily in the U.S. and consumer groups oppose oil exports, saying they would raise gasoline prices for U.S. drivers. Congress first put the ban in place after the 1970s Arab oil embargo that sent gas prices skyrocketing.

"The maritime provision makes it even more of a bipartisan bill," said Rep. Marc Veasey,(D., Texas), one of the original co-sponsors who cites the backing of shipping labor unions in urging his colleagues to support the measure. Mr. Veasey said he doesn't think the Heritage Action opposition "will hurt the bill at all."

If the military calls on the ships for use in wartime or other emergencies, the U.S. government must pay to use the ships, just like any other business customer. The rates differ depending on what the ships are used for, according to James Caponiti, president of the American Maritime Congress, a trade association that represents roughly 20 shipping companies.