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Energy Tomorrow Blog

Crude Oil Exports, Imports and Fig Leaves

analysis  energy exports  crude oil  oil production  economic benefits 

Mark Green

Mark Green
Posted September 18, 2015

First, they said it was about protecting consumers. Opponents of lifting the U.S. ban on crude oil exports claimed that allowing domestic crude to reach the global market would negatively impact Americans at the gas pump. But every major economic study looking at the issue has blown away that fig leaf.

The studies – from Brookings Energy Security Initiative to IHS to the U.S. Energy Information Administration (EIA) – estimate that U.S. oil exports would put downward pressure on U.S. gasoline prices, benefiting American consumers.

There have been other fig leaves.

Exports opponents say America shouldn’t export crude as long as our country is an oil importer. They also say the U.S. should isolate its crude from the global marketplace for national security reasons and that for those reasons oil should be treated differently than other U.S. commodities that are freely traded. These, too, have been blown away by the facts and sound economic analysis.

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Live Event: Impacts of the Crude Oil Exports Ban

analysis  energy exports  crude oil  economic benefits  production  american petroleum institute  Jack Gerard 

Mark Green

Mark Green
Posted September 15, 2015

Join us Tuesday morning for a live event from Washington, D.C., that will explore the impacts of America’s crude oil exports ban on our economy, national security, foreign policy, the environment, consumers and more.

The event, hosted by National Journal and sponsored by API, is scheduled to begin at 8:45 a.m. API President and CEO Jack Gerard will introduce the event, followed by remarks from U.S. Sens. Heidi Heitkamp and John Hoeven, both of North Dakota, and Ed Markey of Massachusetts. 

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Momentum for Crude Oil Exports

analysis  energy exports  crude oil  congress  american petroleum institute  domestic oil production 

Mark Green

Mark Green
Posted September 8, 2015

It looks like last week’s U.S. Energy Information Administration (EIA) report pointing out the benefits of exporting domestic crude oil is pushing Washington policymakers closer to ending the 1970s-era ban on exports. McClatcheyDC reports:

Momentum is growing to lift the 40-year ban on exporting U.S. oil to foreign nations, with a federal report concluding that doing so wouldn’t raise gasoline prices. Congress could vote on proposals when it returns from its summer vacation after Labor Day. Rep. Joe Barton, R-Texas, said he has “green lights” from the House Republican leadership, and is confident the House will pass a bill on ending the ban this fall. “It is up to this Congress to examine the issue and move towards a better policy that reflects the reality of America today, not the America of 1975,” Barton said in an email.

It may be that EIA’s report marks “critical mass” in terms of how much research backing crude exports is needed to move the needle in Washington – saying, as a number of previous studies projected – that exporting U.S. oil won’t negatively affect consumers and will spur domestic production. EIA’s report addresses the White House’s chief concern, about the impact of a policy change on U.S. energy prices. And this week an important House subcommittee is scheduled to vote on legislation that would lift the export ban.  

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EIA and Crude Oil Exports

analysis  energy exports  crude oil  eia  economic benefits  oil production  american petroleum institute 

Mark Green

Mark Green
Posted September 1, 2015

Some quick points from the new crude oil exports study from the U.S. Energy Information Administration (EIA):

First, like a series of other studies before it, EIA’s study finds that lifting America’s 1970s-era ban on exporting domestic crude oil would not negatively affect U.S. consumers. EIA says:

Petroleum product prices in the United States, including gasoline prices, would be either unchanged or slightly reduced by the removal of current restrictions on crude oil exports.

EIA projects that ending the export ban – which would allow shut-in domestic crude to access global crude oil markets – would spur more domestic production. Then the global supply/demand would become “looser,” putting downward pressure on global crude prices, resulting in “lower petroleum product prices for U.S. consumers.

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History, Crude Oil Exports and Seizing the Moment

analysis  energy exports  crude oil  oil and natural gas production  trade  access 

Mark Green

Mark Green
Posted August 27, 2015

For as long as most younger Americans can recall, the United States has been barred from exporting crude oil – a self-inflicted sanction that’s at odds with our historical role as a global leader in both free trade and oil production. For them, that’s the way it has always been – the U.S. unilaterally excluding itself from the world’s most important energy marketplace.

Yet, history, economics and security imperatives all argue that it shouldn’t stay that way. Rather, U.S. oil exports policy should be restored to its former posture, to realign policy with this reality: America’s shale energy revolution, the most recent in a series of world-changing energy events, affords the U.S. a great opportunity, and that the U.S. should pursue every means possible to harness that revolution’s benefits – including resuming the export of domestic crude.

To start, policymakers must acknowledge a couple of things: First, that maintaining the oil export ban that was imposed after the 1973 embargo is hurting U.S. competitiveness in the global economy and limiting the benefits that could and should accrue to an energy superpower.

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EPA – Messing With Success on Methane

analysis  methane  epa  regulation  natural gas production  ozone  renewable fuel standard  Jack Gerard 

Mark Green

Mark Green
Posted August 18, 2015

So, the EPA looked at declining methane emissions …

Down 79 percent from hydraulically fractured wells since 2005; down 38 percent from natural gas production overall from 2005 to 2013; and emissions down – while natural gas production soared ... 

... and decided new methane regulations were the thing to do anyway.

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Oil Exports, Iran and U.S. Global Competitiveness

analysis  energy exports  crude oil  economic growth  domestic oil production  gasoline prices  Jack Gerard 

Mark Green

Mark Green
Posted August 14, 2015

We’ve put up a number of posts recently that argue for lifting the United States’ decades-old ban on exporting domestic crude oil – citing sound economic, trade and security reasons. Underlying them all is this: As an energy superpower, America will see more benefits here at home, be more secure and help make the world safer if U.S. crude is allowed to trade freely in the global marketplace.

Now, there is a compelling, market reason for urgency in ending the export ban – a self-sanctioning relic of the 1970s that hinders U.S. global competitiveness while impeding domestic energy development and economic growth. That would be the impacts on global crude markets if/when Iran resumes exporting oil under the proposed nuclear agreement the White House is advancing.

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Energy Exports: Putting U.S. in the Driver’s Seat on Trade

analysis  energy exports  trade  crude oil  liquefied natural gas  lng  economic growth  oil and natural gas production  american petroleum institute 

Mark Green

Mark Green
Posted August 11, 2015

The U.S. Commerce Department’s recent mid-year trade report illustrates how surging domestic oil and natural gas production is helping our economy – and strongly suggests what increased domestic output could do if U.S. crude oil and liquefied natural gas (LNG) had unhindered access to global markets.

According to Commerce, the U.S. trade deficit among petroleum and petroleum products fell 56.1 percent the first six months of this year compared to the first six months of 2014 (exhibit 9). That growth helped hold the total U.S. year-over-year trade balance steady, even as the trade deficit in non-petroleum products increased 23.1 percent. API Chief Economist John Felmy:

“Despite a very competitive global market, the U.S. energy revolution continues to push our trade balance in a positive direction. Oil imports remain on the decline, and strong exports of petroleum and refined products are creating new opportunities for America to bring wealth and jobs back to U.S. shores.”

For that trend to continue, though, the United States must pursue energy trading opportunities with the same vigor it pursues trade in other areas. A 1970s-era ban on crude oil exports should be lifted, and LNG export projects should be approved by the government so that domestic producers have every chance to access global markets.

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Compelling Economics Support Oil Exports

analysis  energy exports  crude oil  domestic production  economic growth 

Mark Green

Mark Green
Posted August 4, 2015

Something we hear frequently (and too often from people who should know better), is that as long as the United States is an oil importer it shouldn’t export domestic crude. It sounds logical and certainly makes for a good headline. But the idea ignores reality and sound economic analysis.

A quick skim of government data on U.S. trade shows that goods imported into the United States are often goods that also are exported from the United States. The fact is that oil is traded globally, and the ebbs and flows of global supply affect us here in the U.S. Bruce Everett, who teaches oil market economics at Tufts University, explained in a recent article for Politico:

… it’s certainly true that the US will still require imported oil for the foreseeable future to meet our needs.  But the implication here is that exporting US crude oil would increase our import needs and therefore undermine national security. And that’s not how the oil market works. The US has an open economy, and American consumers pay world prices for oil – just as they do for wheat, corn, copper, gold and other internationally traded commodities.  Crude oil is sold in a single, integrated global market.  If the world oil price spikes, the US will suffer, along with everyone else, to the extent we rely on the global market for imports.  But exporting some domestically produced oil would not affect this equation.

Energy isolationism isn’t in the United States’ best interest – economically or from a security standpoint. While some argue that shutting in U.S. crude oil is better for America, that kind of faulty thinking ignores the way free markets work – and can work to America’s benefit if we lift the ban on exporting domestic crude.

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Action Item: U.S. Oil Exports

analysis  crude oil  energy exports  global markets  domestic production 

Mark Green

Mark Green
Posted July 14, 2015

A potential nuclear deal with Iran that would permit the Iranians to resume exporting crude oil to global markets – short-term and long-term – underscores questions about our own oil export policies. Here are two: What are the implications of Iranian crude oil exports for U.S. production? And: When will our government lift de facto sanctions against the export of U.S. oil?

Bloomberg reports that Iran’s oil minister says the country can increase exports by 500,000 barrels a day as soon as economic sanctions are lifted, then an additional 500,000 barrels a day in the following six months. Richard Nephew of Columbia University’s Center on Global Energy Policy is less optimistic about that kind of ramp-up. The U.S. Energy Information Administration (EIA) has said Iran could reach 700,000 barrels per day by the end of 2016.

The point is, if there’s a nuclear deal that lifts economic sanctions against Iran, Iranian oil will be getting to market.

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