Koch Industries Blasts Swapping Oil Exports for Renewable Credit

  • Top lobbyist warns against renewing production tax credit
  • Limited opportunities for Congress to allow exports this year

Koch Industries Inc.’s top lobbyist is warning against extending renewable-power tax incentives in exchange for lifting the longstanding ban on exporting U.S. crude.

"We do not support trading a good free market policy for more corporate welfare," Phillip Ellender, the president of Koch Companies Public Sector, said in a letter to members of Congress. "We hope Congress will still consider lifting the crude export ban on its own merits," Ellender added, "not by burdening society with continuing subsidies."

The missive comes as U.S. oil producers look for avenues to advance crude exports on Capitol Hill, including folding the trade-policy change into an omnibus spending bill or tying it to an extension of the production-tax credit for wind and other renewables that expired last year. The tax trade-off idea has been floated by Senators Martin Heinrich, a New Mexico Democrat, Angus King, an independent from Maine, and Cory Gardner, a Colorado Republican. Representative Joe Barton, a Texas Republican, is also advancing exports as an amendment to a broad energy bill set to be considered by the House next week.

Wichita, Kansas-based Koch Industries’ refining arm, Flint Hills Resources, benefits from the existing ban, which blocks foreign sales of most raw, unprocessed crude but doesn’t limit exports of gasoline, diesel and other refined petroleum products. But Koch has been lobbying Congress to lift the 40-year-old ban, with Ellender insisting the change would "grow our economy, benefit American consumers and support our allies abroad."

Top Priority

The issue is a top priority for U.S. oil producers such as Anadarko Petroleum Corp., ConocoPhillips Co., and Pioneer Natural Resources Co., which say the restrictions constrain domestic crude prices and production.

Louis, Finkel, executive vice president of government affairs for the American Petroleum Institute said the trade group is pushing hard to secure oil exports this year, with an eye on getting the policy change through the narrowly divided Senate. "We’re looking for a vehicle to put this on between now and the end of the year," Finkel said in an interview. "We’re agnostic about what the vehicle is; that is for the wisdom of congressional leadership to determine."

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