The Obama administration confirmed Tuesday that ending the nation’s 40-year-old ban on crude oil exports will not drive up domestic gasoline prices and could even save consumers money at the pump.
Tuesday’s report from the Energy Information Administration puts even more pressure on Mr. Obama, who so far has been reluctant to reverse the export ban and allow oil and gas companies to sell fuel abroad. The White House last month did approve limited crude oil sales to Mexico, but critics say the president should go much further and allow the U.S. energy industry — which has revitalized economies across the country by tapping into the nation’s vast supply — to take advantage of overseas markets.
The most recent EIA data seem to put to rest the chief argument of export opponents — that sending U.S. fuel to other nations would reduce supply at home and drive up gasoline prices.
“In EIA’s analysis, domestic production responds to the increase in domestic crude oil prices, if any, when crude export restrictions are removed in each case. Any increase in domestic crude oil production that occurs because of the removal of restrictions on crude oil exports that is not offset by reduced production outside the United States would also represent an increase in global crude oil supplies, which in turn places downward pressure on global crude oil prices,” the study 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.”
The ban has stood since the 1970s, when global fuel shortages led the federal government to institute strict controls on U.S. oil and how and where it can be sold.
Lawmakers in both parties, along with a host of organizations in the energy and manufacturing sectors, argue that the ban has outlived its usefulness, especially in light of unprecedented American production of oil and natural gas.
While the ban still remains in effect, the administration last month moved to allow limited crude oil sales to Mexico, perhaps a sign that broader crude oil exports are on the horizon.
Energy groups said Tuesday’s EIA report should serve as a wake-up call to the administration and should spur federal officials to expedite more exports.
“The EIA report provides a final, non-partisan confirmation that ’70s-era trade restrictions on U.S. oil are bad for American consumers,” said Kyle Isakower, vice president of regulatory and economic policy at the American Petroluem Industry, the sector’s leading trade group. “America is now a global energy superpower, and we shouldn’t have trade policies that make it harder for the U.S. to compete with other suppliers, like Iran and Russia. The EIA report only reinforces the economic benefits of exports outlined in every other major study — more U.S. jobs, greater U.S. energy production, and downward pressure on fuel costs.”
Sen. Lisa Murkowski, Alaska Republican and chairman of the Senate Energy and Natural Resources Committee, said the “capstone report clearly points the way for Congress and the administration to act.”
A coalition of bipartisan lawmakers, including Ms. Murkowski, continue to push legislation that would lift the ban, though such a bill likely would be vetoed by the president.
Other research, export opponents point out, seems to tell a different story. A July study from the consulting firm Stancil & Co. found that lifting the ban could drive up gas prices by as much as 15 cents per gallon.
“This is more evidence that Congress should think long and hard before rushing to change our 40-year-old energy independence law,” said Jay Hauck, executive director of The CRUDE Coalition, following the release of the Stancil & Co. study.
The CRUDE Coalition is a group of energy companies and other stakeholders opposed to crude oil exports.
• Ben Wolfgang can be reached at bwolfgang@washingtontimes.com.
Please read our comment policy before commenting.