The Oil Exports Conversation
Posted December 7, 2015
It’s good that Congress appears to be talking seriously about ending the United States’ four-decades-old ban on crude oil exports. Reports say Democrats and Republicans are discussing a deal that would include lifting the export ban – though it’s unclear what a specific deal would look like. “We need to have a conversation” about oil exports, Senate Minority Whip Dick Durbin told Politico. “We need to have a fair negotiation.”
Of course, we’ve been having a conversation about the merits of lifting the exports ban for some time. And it starts with this: Every major study on the issue has found that exporting U.S. crude oil would be good for America and Americans. The benefits range from those to consumers, to the economy, to American security to domestic energy production. According to the research, ending the outdated ban would positively impact all of the above.
Let’s start with consumers. Exporting domestic crude would add to global supply, putting downward pressure on crude prices and ultimately U.S. gasoline prices, the studies say. The benefit to consumers would range from a penny per gallon, according to the U.S. Energy Information Administration’s analysis, to up to 12 cents per gallon, according to a Brookings/NERA study. A summary:
Lifting the exports ban would spur domestic oil production. It would allow U.S. oil to compete fairly with crude from other countries, instead of the current situation where large volumes of domestic light crude that are landlocked inside the U.S. – mismatched for the domestic refining sector and unable to access the world market – trade at a discounted price compared to the global price, which is a disincentive to production.
According to an ICF International study, lifting the crude export ban could result in increased domestic production of up to 500,000 barrels per day by 2020 (which is in line with EIA’s estimate of an additional 470,000 barrels per day). This increased domestic output would spur economic growth, creating up to 300,000 jobs in 2020, ICF says, as well as an increase in U.S. GDP of $38.1 billion.
The conversation in Congress also should focus on the way lifting the exports ban would help make America and the world more secure. The United States is the world’s leading producer of oil and natural gas, and allowing U.S. oil to reach the global market would help stabilize and diversify world supply. The export of U.S. crude would benefit American friends overseas, a number of whom have called for an end to the ban. Michele Flournoy, President Obama’s former undersecretary of defense for policy, to members of Congress this summer:
“[A]llowing U.S. oil exports would enhance the energy security of key U.S. partners, from Poland to India to Japan. Indeed, our closest allies in Europe and Northeast Asia would welcome – and have asked for – the unrestricted export of U.S. crude oil. … Enabling U.S. oil exports would strengthen our geopolitical influence, leadership and leverage with allies and adversaries alike.”
These are the conversations on ending the crude oil export ban that should occur among members of Congress. In a bipartisan vote in October, the U.S. House passed legislation to end the ban, so it’s the Senate’s turn to act. The White House threatens to veto such legislation, but we wonder if it would follow through if the Senate also backed ending the ban with a strong bipartisan vote.
Given the benefits to American consumers, the economy, energy production and our foreign policy, conversations between senators should be about advancing U.S. interests and lifting the ban.
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and four grandchildren.
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