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Economists Call for Lifting Ban on U.S. Oil Exports

Economists Call for Lifting Ban on U.S. Oil Exports

Washington, D.C. – Two economists are calling on the Obama Administration and lawmakers to lift the current ban on the exportation of U.S.-produced crude oil.

Removing the sanction would boost U.S. trade and economic competitiveness and highlight the need for U.S. trade policy “to reflect the reality of America’s abundant resources,” say economists Dr. Margo Thorning and Dr. William Shughart.

Thorning and Shugart are, respectively, Senior Vice President and Chief Economist at the Logan, Utah-based American Council for Capital Formation (ACCF), and Professor of Economics at Utah State University’s Jon M. Huntsman School of Business and former Federal Trade Commission economist.

“This is an issue whose time has come,” said Thorning. “The momentum for lifting the ban on crude oil exports continues to grow and now is the time for the U.S. to capitalize on its energy advantages. This new project will be a resource for the public and policymakers to get the facts on a critical issue that affects everyone.”

Added Shughart, “Not only will lifting the ban bring substantial economic benefits to the country, but doing so will also advance U.S. and global energy security. The times – and the world – have changed in the decades since the ban was put into place and our energy policies need to catch up.”

Since the export ban was enacted in 1975, the U.S., they said, “has transitioned into a world leader in energy production. The nation’s refined oil – mainly gasoline and diesel – is exported without restriction, yet due to the crude export ban, the country is restricted from exporting its abundant supplies of crude oil.”

Such a restriction, they say, “holds America back from significant economic, geopolitical and price-related benefits.”

11/10/2014

Calls Growing to Ease Ban on US Petroleum Exports

Washington, DC – International pressure is growing on Washington from several major trading partners to ease, or end, the long-standing ban on US crude oil exports.

Mexico said recently that it could enter an agreements with the US on crude oil swaps or on direct imports, while one of South Korea’s leading refiners has opened discussions with the government in Seoul over how to encourage Washington to end the ban on ‘ultra-light sweet crude,’ and the European Union wants US oil and natural gas exports covered by the proposed Transatlantic Trade and Investment Partnership.

 

According to Petroleos Mexicanos (PEMEX), Mexico’s state-owned oil company, the country is seeking US-sourced oil because of a sharp decline in its own reserves.

 

South Korea, which relies on imports to cover more than 95 percent of its energy needs, has had to curb oil imports from major supplier Iran, due to US and EU sanctions introduced in 2012, and the EU is eagerly looking for an alternative to petroleum supplies from Russia.

 

Japan, while not pushing for an ease on the current ban, has said it’s interested in importing more of what can be pumped out of gushers in such states as Texas, Alaska and North Dakota, but only “if the supplies are economically feasible.”

 

While fully overturning the ban would require Congressional action that most consider unlikely in the near-term, many argue that the White House could gradually allow for more oil to flow abroad through existing means.

 

Due in large part to the increase in shale oil production, the US is soon expected to surpass both Russia and Saudi Arabia as the world’s largest oil producer.

 

In March, the US Department of Commerce approved the export of 500,000 barrels of lightly processed condensate exports to South Korea from two domestic companies. Three additional applications have been put on hold as the White House reviews its policies on the ban.

 

09/11/2014

 

Reports Call for End to US Petroleum Export Ban

Washington, DC – US consumers could see their energy bills shrink and more than one million jobs would be created if the government in Washington, DC ended its nearly four decades-old ban on crude oil exports, according to two reports published by the American Petroleum Institute (API) and the industry research firm IHS.

The API report forecasts “broad-based economic gains” if the oil ban were lifted, repeating its assertion that exporting oil would economically benefit not only oil-producing states but other states as well.

Eighteen US states could gain over 5,000 jobs each in 2020 from exports of US crude oil, said Kyle Isakower, the API’s vice president for regulatory and economic policy.

Most states, he added, “could see economic activity grow by hundreds of millions of dollars due to growing energy production and downward pressure on the prices at the pump, while the US is poised to become the world’s largest oil producer, and access to foreign customers will create economic opportunities across the country.” .

“When it comes to crude oil, the rewards of free trade are not limited to energy-producing states. New jobs, higher investment, and greater energy security from exports could benefit workers and consumers from Illinois to New York, especially in areas where consumer spending and manufacturing drive growth,” said Isakower.

In its own study released the same time as the API report, Colorado-headquartered IHS predicts an end to the export restrictions “could inject $746 billion in additional investment into the economy between 2016 and 2030, while increasing domestic oil production by an average of 1.2 million barrels more per day.”

The additional crude oil supply, the report said, “would lower gasoline prices by an annual average of 8 cents per gallon with the combined savings for US motorists during the 2016-2030 period translating into $265 billion compared to a situation where the restrictive trade policy remains in place.”

A boost to the US economy would be “rapid” and “accompanied by a surge of capital that could help depress gas prices in the longer term and lower the country’s own petroleum imports by nearly 1 million b/d in 2016 for a savings of more than $43 billion, it said.

The current US oil and gas boom “is a huge win for us, but it takes a little education” for drivers to appreciate the economic benefits of flooding global markets with American crude,” the API’s Isakower said. “The public will get behind crude exports when they see a benefit for themselves.”

Last year, the Council on Foreign Relations released its own report, which concluded that, “Removing all proscriptions on crude oil exports, except in extraordinary circumstances, will strengthen the US economy and promote the efficient development of the country’s energy sector.”

06/06/2014