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Trade – Energy and Opportunity

Global trade and investment regimes are of critical importance. Free trade provides opportunities for business growth and expansion; increases the range of oil, natural gas, and other petroleum products available to consumers; enhances market‐based production globally; and contributes to global energy cooperation. API believes these ends can only be achieved by eliminating impediments imposed on international oil and natural gas producers, fostering a pro‐export environment, and maintaining a level playing field among industry sectors by reducing trade barriers that distort the market and raise costs to consumers.

One benefit of the renaissance in U.S. energy production is the new capability to export American oil and natural gas – the mere discussion of which reflects the recent sea change in the U.S. energy outlook. Today, thanks to surging domestic output, exporting oil and gas not only is possible, it’s happening, with clear benefits for the economy, domestic production and America’s allies abroad.

The United States started freely trading crude oil in January 2016, following congressional legislation to end a 1970s-era ban on exports. The early results are promising. The U.S. Energy Information Administration (EIA) reported that the number of countries buying American crude in 2016 had increased sharply over 2015 and 2014 (when major restrictions on exports were in effect).  Further, significant domestic fuel cost increases predicted by some opponents of lifting the export ban haven’t materialized – which is what most major studies projected.

The situation with LNG exports is a little different, because they weren’t banned as crude exports were. Rather, declining domestic production of previous decades was pushing the U.S. toward importing large volumes of natural gas to meet needs here at home. The shale energy revolution changed that, now there’s an LNG export opportunity, one that an ICF study projects could contribute up to 452,000 jobs nationwide, while adding up to $73.6 billion annually to GDP through 2035. Beyond the job and economic benefits, exporting U.S. LNG will help allies overseas – especially those seeking more options in terms of LNG supply – in particular, countries in Central and Eastern Europe.

With new crude exports and growing capacity to export LNG, the United States is just now discovering its potential as a global energy supplier. It’s time to complete the equation by expediting federal approvals for LNG export facilities so that the U.S. can be fully competitive with other suppliers around the world.

RelatedNews Releases | Testimony and SpeechesBlog Posts | LNG Exports


API Supports Free Trade

Global trade and investment regimes are of critical importance. Free trade provides opportunities for business growth and expansion; increases the range of oil, natural gas, and other petroleum products available to consumers; enhances market‐based production globally; and contributes to global energy cooperation. API believes these ends can only be achieved by eliminating impediments imposed on international oil and natural gas producers, fostering a pro‐export environment, and maintaining a level playing field among industry sectors by reducing trade barriers that distort the market and raise costs to consumers.


North American Energy

Today’s highly integrated and interdependent North American energy markets (oil, natural gas, electricity) benefit the United States by expanding the size of our energy markets which create economies of scale that attract private investment, lower capital costs, and reduce energy costs for consumers. Energy system integration enhances U.S. energy security by enabling North American energy independence and by providing export markets for the U.S. as the world’s largest producer of oil and natural gas.


Energy Benefits of NAFTA

North American energy markets are highly integrated and interdependent (see API backgrounder North American Energy). The North American Free Trade Agreement (NAFTA) has played a critical role supporting and growing North American energy integration, interdependence and energy security by eliminating tariffs for crude oil, gasoline, kerosene-type jet fuel and other refined products, and for energy-intensive manufactured goods. NAFTA also has liberalized energy trade, provided investment protection and served as the foundation for recent access to Mexico’s hydrocarbon reserves.

Energy Benefits of NAFTA


API: NAFTA Must Include Investor-State Dispute Settlement (ISDS)

Strong Investment Protections, including ISDS, promote US interests and enforce fair trade and investment practices by US trade partners. The investment chapter of US free trade agreements (FTAs) such as NAFTA contains a core commitment by the host country to accord investors of the other FTA countries a basic standard of protection that includes non-discrimination, fair and equitable treatment and limits and rules for expropriation. This commitment to a basic standard of protection is backed up by a commitment to ISDS, which allows investors to seek a remedy for alleged violations of that standard in a neutral forum.

API: NAFTA Must Include Investor-State Dispute Settlement (ISDS)


API Ranking Shows States Compete Among Top Energy Producing Nations

Many individual U.S. states now rival the world’s major energy producing countries, according to a ranking published by API. Each with a natural gas output above 3 billion cubic feet per day, eight U.S. states would rank among the world’s top 30 gas producing countries, exceeding nations like Venezuela and Oman in 2012, the most recent year for which consistent international data is available. The rapid growth in shale production, unlocked by hydraulic fracturing and horizontal drilling, has helped the United States to take the top spot among global producers. Among oil producing nations, two U.S. states – Texas and North Dakota -- would rank among the top 20 nations in the world. Four additional states make the top 35.

API's press release


API Policy Positions on the Transatlantic Trade and Investment Partnership (TTIP)

Energy is an important component of transatlantic trade. API believes energy‐related World Trade Organization (WTO) and market access principles should be fully addressed in the Transatlantic Trade and Investment Partnership (TTIP). API advocates for a TTIP that removes barriers, promotes market‐oriented policies and creates genuine opportunities for commercial growth and job creation.

The below papers represent the policy positions on TTIP of the 700+ member companies of API and the International Association of Oil & Gas Producers (IOGP).

API-OGP Position Paper on TTIP – 2014

API-IOGP Position Paper on TTIP Energy Issues – 2015


API Supports Duty Drawback

API advocates that trade agreements continue to include duty drawback provisions for U.S. manufacturers to obtain a refund (or “drawback”) of duties, taxes and fees that were paid on imported goods used in that manufacturing effort. The drawback of Federal duties, taxes and fees helps U.S. manufacturers, retailers and distributors compete in the global marketplace by reducing the distribution and production costs of U.S. exports.

API Duty Drawback Position Paper

For more information on U.S. crude oil exports see here, and on LNG exports, see here.