Congress to abolish crude export restrictions, oil refiners to receive $3 a barrel tax break

The US Congress is pushing a tax break for oil refiners as a compromise to finally allow unrestricted crude-oil exports.

According to The Wall Street Journal, the bill could potentially end the long-time ban on U.S. oil exports, which has been around for forty years. This raises the political stakes of the oil industry as global oil prices are getting pummelled to the ground.

However, the proposed bill could double up the benefits that the oil industry will receive just when world leaders have pledged support to curb carbon pollution from fossil fuel. In a statement published from Bloomberg Business News, Sierra Club's Beyond Dirty Fuels Campaign director, Lena Moffitt, said "This would be a major giveaway to the oil industry at the same time the rest of the world is working diligently to forge a deal to combat climate change. We need to be moving away from, and not underwriting, fossil fuels."

Delaware Democratic Senator Tom Carper has proposed a tax credit of up to $3 a barrel for independent refiners if Republican-riddled Congress abolishes the forty-year-old restrictions. He said negotiations are being done to make sure "the unintended consequences to dozens of refineries across the country are avoided."

"The idea is that if the oil export ban is going to be lifted, we want to be sure there's no collateral damage to refiners in this country," he said.

The Hill reports that Democrats are viewing the ban as a bargaining chip and are demanding plenty in return since lifting the ban has been one of the priorities of the Republicans for over a year.

"It's an act of desperation on their part, they want it so desperately," said California Democratic House Minority Leader Nancy Pelosi.

Tax credits are a principal aspect for federal tax policy discussions. The tax credit for wind energy has expired just last year and solar energy's is due to expire before 2016 ends. The Democrats are demanding the renewal of tax credits for both for at least five years in exchange for allowing oil exports.