API President and CEO Jack Gerard joined members of Congress and others at a Capitol Hill press conference calling for an end to the United States’ 1970s-era ban on the export of domestic crude oil. Gerard:
“We’ve come to the point where we have a limitation on our ability to continue to grow this renaissance, to create good-paying jobs, to help stimulate the domestic economy. Today, there are few public policy changes that would bring as much economic value to our domestic economy than lifting the ban on crude exports.”
Texas Democratic Rep. Henry Cuellar said other Democrats will support legislation to end the export ban:
“I think we are going to get there. Once we get this on the floor, you’re going to see that we’re going to get more support from the Democratic side. … I’ll continue working with my friends across the aisle to make sure that this outdated ban on oil exports is lifted.”
The economic case for lifting the ban is compelling, reflected in a wave of studies by a variety of organizations that have found exports would broadly benefit the U.S. economy, help stimulate domestic oil production – especially in a low-price market cycle – lower costs for consumers and strengthen America’s ability to help its allies around the world.
It’s important now to build political momentum for lifting the export ban – hence the Capitol Hill press conference. There are challenges, reflected in Energy Secretary Ernest Moniz’s recent assertion that the case for lifting the ban needs to be clearer for the public. U.S. Sen. Lisa Murkowski, chairman of the Senate’s Energy and Natural Resources Committee and an oil exports supporter, said some lawmakers remain fearful that exports will be blamed for higher pump prices, resulting in political retribution.
Certainly, the public conversation needs to address misperceptions that may overshadow economic data and analysis. ConocoPhillips Chairman and CEO Ryan Lance touches on a number of relevant points in this recent Q&A post.
As the studies show, fears the exports will lead to higher prices at the pump are unfounded. Studies estimate gasoline prices could decline 1.7 cents to 4.5 cents per gallon to up to 12 cents per gallon. This would result as exported U.S. crudes put downward pressure on the global cost of crude. At the same time, exports would help stimulate more domestic production as crudes that currently are barred from leaving the country are allowed to reach the global market.
Ultimately, as Gerard noted above, the benefits of exporting a valuable American commodity must be recognized – by policymakers and all Americans. As Lance mentions, crude oil should be traded on the global market like any other commodity.
Strategic analysis also must be considered. Murkowski says the export ban amounts to a “sanctions regime against ourselves.” And that’s what it is when the United States shutters in domestic crude while other nations supply the global market – even as the U.S. considers the prospect of more Iranian oil reaching the market. “We shouldn’t lift sanctions on Iranian oil while we are keeping sanctions on American oil,” Murkowski said. “It makes no sense.”
U.S. crude oil exports makes sense. The export ban is a relic of the past, of the era of U.S. energy scarcity. Export policy needs to reflect the new era of U.S. energy abundance, to boost domestic production, lift our economy and benefit consumers.
By Mark Green
Originally posted May 1, 2015
Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America’s oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry.
