The crude oil export ban is hurting America.
Thanks to the surge in shale production, experts predict that the US will soon be producing enough oil to outpace domestic needs. If the US Energy Information Agency's (EIA) predictions hold, by 2037, our net oil imports could actually fall to zero. In fact, we're already at a point where we could begin exporting some of our production, which would mean lower gas prices for Americans and more national security for us and our allies.
But right now, that can't happen.
Thanks to a decades-old law written in the time of the 1970s Arab Oil Embargo, the U.S. is currently unable to export its own oil. This law no longer represents our current national needs, and it's not a reasonable regulatory measure. Lifting the ban would create significant benefits for every American—not just oil companies.
What will lifting the ban do?
Lifting the crude oil ban could be a global game-changer – providing plentiful energy worldwide and helping to stabilize or even lower world energy prices. Our oil exports would reduce the world's reliance on volatile energy-producing nations and would boost the economic, political, and social stability of all nations. We could help nations that currently rely on energy imports from countries that are historically unpredictable or hostile.
But lifting the ban will do much more than that.
It will lower U.S. gas prices and aid the US economy.
Lifting the export ban could lower the costs for American drivers by putting more crude on the global market and reducing the total price of oil, which should drop prices at the pump. In fact, if gasoline prices went down just 12 cents per gallon, it would save Americans $16 billion per year*. In addition, IHS says that economic activity resulting from increased crude exports would support 359,000 more jobs in 2016 before peaking at 964,000 additional jobs supported in 2018, and that GDP would rise by nearly $134 billion in 2018. What's more, our trade deficit would shrink by $22 billion in 2020, according to the American Petroleum Institute.
It will bolster national security and generate goodwill.
Should an international crisis arise, our government will be able to leverage supplies for domestic use or aid allies or neutral countries in distress. In the event of an escalating international crisis, we could avoid embargoes, disruptions or price shocks from hostile Petro States and take care of our own needs. Having the ability to export crude will also signal our clear commitment to free and fair trade. We'd be giving international partners an opportunity to buy U.S. oil rather than rely on traditional Petro States.
What lifting the ban won't do:
It will not raise gasoline prices.
Exporting crude oil would encourage more domestic oil production and put that crude on the global market. That would lower the world price of oil, which is most closely related to the price of gasoline in the U.S. A recent study released by NERA Economic Consulting confirms that pump prices would fall two cents to 12 cents per gallon on average, depending on how much oil is ultimately produced and when the export restrictions are lifted.
It will not deplete our energy resources.
Just 10 years ago, the popular wisdom was that the U.S. was close to running out of oil and natural gas resources. But today, the U.S. has more recoverable oil than Saudi Arabia, and we are only producing a fraction of what is possible. And thanks to technological breakthroughs in precision drilling and completions techniques, America now measures its oil and natural gas supply in centuries, rather than decades.
It will not increase the risks to the environment.
Lifting the ban will encourage more domestic drilling which does carry associated environmental risks. But those risks are manageable through prudent regulation. Continuing to ban crude oil exports is not an effective means of preventing harm to the environment - environmental regulators must manage the risks of oil production whether the U.S. exports crude oil or not. In addition, substituting petroleum products for coal in nations that use both fuels may actually result in some offsetting reductions in CO2 emissions.
What happens if the ban stays in place?
There have already been historic gluts at the U.S. pipeline hub in Cushing, OK. If the ban continues, so will the likelihood of more excess product. And that means production in unconventional shale oil and gas plays could come to a screeching halt.
And when you shut down shale production, you lose jobs. In this case, lots of them. The energy industry is a job creator - at least 1.7 million jobs have been created thanks to "unconventional" shale energy. President Obama promises that another 600,000 will be directly employed in shale natural gas production by the end of this decade, and more than 3.4 million Americans will be fully employed by 2035, according to IHS Insight research. But those numbers might not be reached if shale development stagnates because of the export ban.
Let's tell Congress that we want lower gas prices, more jobs, a free economy and a safer world. Sign the petition and add your voice to the movement to lift the crude oil export ban.
* Based upon the EIA study that Americans consume an average of 368,510,000 gallons of gasoline a day.
Ranking Member, Senate Energy & Natural Resources Committee
Institute for 21st Century Energy, U.S. Chamber of Commerce