The People of America's Oil and Natural Gas Indusry

Momentum for Crude Oil Exports

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.  

To be sure, some in Congress need more convincing. Still others may not be convincible. Sen. Ed Markey of Massachusetts told McClatcheyDC that lifting the ban would threaten national security and could lead to higher energy prices – despite the weight of scholarship to the contrary from the likes of Brookings, Columbia University, the Government Accountability Office and others.

Meanwhile, voices around the country are joining the chorus calling for lifting the oil export ban. Some of the recent newspaper editorial offerings:

Boston HeraldThe federal government’s experts have affirmed that the 40-year-old prohibition on exporting crude oil has little or no effect on gasoline prices. Congress should bite the bullet — a gumdrop, actually — and ditch this meaningless stab at consumer protection. … Recently the Energy Department has permitted U.S. producers some relief, such as classifying certain liquids as not crude oil and permitting swaps of crude with Mexico. Little more can be done, but the strength of the free-trade case is winning converts — we hope enough to act this year.

Houston ChronicleCrude oil is a multifaceted market, and our domestic refineries weren't built to handle the light crude that our shale plays produce. Exports would open new markets for that light crude, providing a much-needed boost to the drilling industry. A report released Tuesday by the Energy Information Administration, like many studies before it, reinforces this position ("Report tackles crude exports, beliefs," Page D1, Wednesday). The report's clearest finding was that crude exports could cause gas prices to fall. The stuff you buy at the pump is tied more to global crude prices than the cost at home, and exports would lower the price of oil across the globe. For many Americans, the debate ends there. But here in Houston, our energy economy should have folks digging deeper. Overall, according to the report, removing the export ban could possibly give a boost to domestic oil producers. In two out of four economic scenarios, the agency predicted increased production and more business for drillers.

Lafayette (La.) Daily AdvertiserWhat a difference time makes. Our vehicles are more efficient. Our habits have been modified, to some extent. Our supply of oil is vast. With the release this week of a U.S. Energy Information Administration report that suggests U.S. consumer prices for gasoline would not rise — in some scenarios, they would fall — with the lifting of the ban on crude oil exports, our country has moved full circle. … It’s time to lift the ban. American producers are competing with countries that face no such restrictions and the U.S. government should not be the force that limits our own industry. If we believe in free markets, we should act on that belief.

Tyler (Texas) Morning TelegraphThe time is right. Nearly everyone is on board. When Congress reconvenes in Washington this week, both the House and the Senate should pass bills lifting the oil export ban. … So who’s standing in the way of lifting the ban? Primarily, it’s environmentalists who aren’t against the ban in particular – they’re just against fossil fuels. “Their basic argument is revealing: ending the crude oil export ban will lead to more, cheaper oil for billions around the world – and that is why it is bad,” explains Alex Epstein, writing in Forbes. ... But this argument is deeply flawed, from a cost-benefit analysis. The benefits of cheap energy far, far outweigh the costs.

Ending the export ban is about economics, domestic production and American competitiveness in the world’s energy marketplace. It’s about securing the benefits of trade, accruing to other energy suppliers, for the United States.  Kyle Isakower, API vice president of regulatory and economic policy:

“The EIA report provides a final, non-partisan confirmation that ‘70s-era trade restrictions on U.S. oil are bad for American consumers. … It’s time for policymakers to harness the economic advantages of free trade by lifting the outdated ban on crude exports.”

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. Mark also was a reporter, copy editor and sports editor. 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 live in Occoquan, Va., where they enjoy their four grandchildren.