U.S. Crude Oil Exports Projected to Improve EU Energy Infrastructure

President Obama has approved a $1.1 trillion spending bill that unlocks America’s energy potential by reversing the 1970s ban on domestic crude oil exports. Of note, according to multiple energy experts speaking at an energy forum on December 1, deploying America’s growing energy reserves abroad will result in significant benefits for our allies, including modernizing the energy infrastructure of the European Union.

The Alliance for Innovation and Infrastructure (AII) hosted the policy discussion on Capitol Hill earlier this month to examine the infrastructure connectivity of the European Union and its resulting implications on U.S. energy policy. The event was kicked off by AII Chairman Brigham McCown who stressed the need for U.S. intervention as Europe grows increasingly dependent on energy imports.

“EU imports more than half of the energy it consumes. As such, there is a great opportunity here for the United States to assist in strengthening EU’s infrastructure through its own abundant resources, ultimately bolstering this region’s energy outlook and security,” said McCown.

The event then turned to a panel of energy experts—including two former U.S. ambassadors—who all underscored America’s role in strengthening EU’s energy market through the use of energy exports.

“There is a significant demand for energy resources in the EU that the administration and U.S. policymakers must recognize. The question here is what the U.S. can do to help strengthen EU’s infrastructure. The answer to that question is allowing policy that greenlights U.S. exports o including oil and natural gas,” said Richard Kauzlarich, former U.S. Ambassador to Azerbaijan, Bosnia and Herzegovina, and current co-director of the Center for Energy Science and Policy at George Mason University.

Others on the panel also underscored the security implications of allowing U.S. exports of crude oil and gas.

“U.S. oil and gas is a strategic asset for the EU and a very important element of security. America must take a role in making the EU less dependent on resources from threatening regions including Russia,” said András Simonyi, former U.S. Ambassador to Hungary and current managing director of the Center for Transatlantic Relations at Johns Hopkins University. “The Secretary of Energy and this administration must recognize that sensible energy policy can help the EU, and especially eastern European countries, finally break free of the corrupt energy practices of Russia.”

Full remarks of AII’s policy discussion can be viewed here.

 

 

 

 

 

 


Crude Oil Exports: What’s Next?

Last week, Congress passed an omnibus spending bill containing a provision that lifted the ban on crude oil exports, signaling a new era of U.S. energy policy. Advocated by members of both political parties, the core of their argument rested on the countless benefits the repeal will bring to the nation’s economy and national security.

Now as we move into the New Year, the unanswered question towards crude oil exports lingers: What’s next?

For decades, OPEC has been dominating the world’s oil market through its overarching influence on the price of oil. But now that the U.S. has lifted its ban on domestic crude, OPEC and other energy-producing nations must take into consideration the actions of American energy producers. During a radio interview, Speaker Paul Ryan (R-Wisconsin) gave his opinion on the outcome of the omnibus bill, specifically highlighting the advantage U.S. crude oil exports will bring to our allies:

“By lifting the ban permanently, we can cut off Putin, we can help give Europe another source of oil, we can displace OPEC from dictating the terms of the international oil markets, we can displace Venezuela, we can create up to a million new jobs in America.”

U.S. crude oil exports will bring an alternative source of energy to the global market, releasing our allies in Europe and Asia from unstable suppliers.  It will also allow American consumers to benefit from the global price of oil that is set by the international wholesale market.

Companies across the U.S. will also benefit from the opening of new markets as logistics to export American crude becomes a manageable reality. There is already an “extensive network of oil pipelines and storage tanks” along the Gulf Coast of Texas and Louisiana due to imports (The Wall Street Journal, 12/16/15, “Congressional Leaders Agree to Lift 40-Year Ban on Oil Exports.”) The transformation of import terminals to handle exports will also be relatively smooth since the permitting process is efficient in pro-energy states.

As we ring in 2016, the U.S. will be gearing up to export crude oil, signaling to the rest of the world that it’s finally taking its place as a leader in energy.


Thorning Applauds Omnibus Vote Embracing Crude Exports Policy Reform

Dr. Margo Thorning, senior policy advisor for the American Council for Capital Formation (ACCF), released the following statement in response to Congressional passage of a $1.1 trillion spending deal that includes language prohibiting the federal government from restricting crude oil exports from the United States:

“Today’s vote lifting the crude export ban is an historic moment for the American people and the U.S. economy. By embracing a modernized policy that recognizes our newfound energy abundance, we are opening the door to increased jobs, economic growth and the ability to act as a stable and secure energy supplier for our key allies. This outdated ban has only served as an economic sanction and change has long been overdue. We applaud Congress’ decision to usher America into a 21st century energy future and allow us the opportunity to compete on the global energy stage.”


Crude Exports Are Crossing the Finishing Line

In a historic move, Congressional leaders have negotiated a deal on a government spending bill and tax package that will bring an end to the 40-year old ban on crude oil exports.

A legacy of the Arab Oil embargo, the ban on crude oil has been a topic of debate for the past two years with supporters highlighting the significant benefits that crude oil exports can bring to the United States including eliminating market distortions, growing our economy, and strengthening our national security. Multiple members of Congress, including Senators Heidi Heitkamp (D – North Dakota) and Lisa Murkowski (R – Alaska) have long campaigned for oil exports and are now seeing the fruits of their efforts pay off. In his remarks on the deal, House Speaker Paul Ryan (R – Wisconsin) honed in on the crude exports language:

“But this week, we have completed two bipartisan agreements… First, we are lifting the government’s 40-year-old ban on crude oil exports. This is a big win for American jobs and for our energy industry. It’s a big win for our manufacturers and for our foreign policy”

While inclusion of the provision to lift the ban is a win, the omnibus bus bill still needs to be passed by the House of Representatives and the Senate, with the next hurdle surviving the White House, which in the past has issued a veto threat over stand-alone legislation lifting the crude export ban. But if President Obama wishes to avoid an embarrassing government shutdown over an amendment that will bring countless opportunities to the U.S., he should agree to sign the bill and welcome the U.S. into a modern energy age.


Congress Must Act on U.S. Crude Oil Exports This Week

Lawmakers on Capitol Hill are working tirelessly this week to pass an omnibus bill before government funding runs out on Friday. Check out our latest video that explains the importance of including a crude oil exports provision in this must-legislation in order to sustain our country’s energy renaissance and support long-term economic opportunity for the U.S.

Now is the time to introduce our newfound energy abundance into the global markets by removing the current ban on exporting domestically produced crude oil. At stake is the ability for the U.S. to not only grow its economy, but prevail in a world closely tied to future energy growth. After forty years, it is time to change our energy thinking and shed outdated policy.


Omnibus or Bust

Lawmakers are working frantically this week on Capitol Hill to pass an omnibus bill before government funding runs out on Friday. With this year’s legislative calendar approaching its end, multiple bargaining chips are on the table as Democrats and Republicans work to finalize the must-pass spending package. Notably, one measure has quickly risen to the top of the bipartisan priority list and could be added in hopes of striking a deal between Democrats and Republicans: reversing the U.S. oil exports ban.

Last week, the House of Representatives voted 249-174 to pass the all-inclusive, “North American Energy Security & Infrastructure Act,” which includes language reversing the crude oil ban. Significantly, this is the second time in less than two months that the House has voted to lift the decades-old ban.

Nonetheless a success for supporters, the passing of this bill was a symbolic gesture by Republicans to state their intentions of modernizing our nation’s energy policy. As Drew Johnson, a Senior Scholar at the Taxpayers Protection Alliance, argued recently in the Washington Examiner, “Instead of passing scores of well-liked bills and daring the president to commit political suicide by vetoing legislation the public overwhelming supports, GOP leaders let mountains of popular proposals pile up on their desks.”

It’s clear the campaign to lift the ban has now reached a heightened level of urgency on Capitol Hill. And for good reason.

Exporting crude oil would bring tremendous economic benefits to American consumers and producers. As OPEC continues to pump crude oil into the global energy supply, U.S. producers are subject to negative repercussions since they cannot compete on the world market. Being the only commodity that is not traded freely in the U.S., if overturned, crude oil exports will allow producers to compete openly for competitive fair prices.

Crude oil exports would also breathe much needed life back into the nation’s job market at a time when the industry struggles with declining job numbers. The Brookings Institution projects at least 200,000 new jobs and $1.8 trillion in economic revenue. What’s more, the U.S. Energy Information Administration has forecasted lowered fuel prices. Clearly, it’s a win-win for consumers and our economy.

As the hours tick by, lawmakers continue their work around the negotiating table to include the provision in the omnibus package. Hopefully, the U.S. can ring in the New Year with modernized energy policy that ends the 1970s ban on crude oil exports.


ACCF’s Dave Banks Discusses Security Implications of U.S. Energy Exports on Platts

Last Month, Platts “Capitol Crude” oil policy podcast sat down with George David Banks, executive vice president with the American Council for Capital Formation (ACCF), to discuss the ability of U.S. energy exports to bolster security relations between the U.S. and countries in the Asia Pacific, particularly China.

Banks noted that as U.S. production of crude oil continues to experience unprecedented growth, China’s energy independence continues to dwindle. In fact, EIA forecasts suggest a Chinese import gap of roughly 14 million barrels per day by 2040 or more than 70 percent of consumption of petroleum and other liquids.

“If you look at what’s happened in the United States and in China over the past 18 years, it’s a stark contrast. There’s growing dependence on foreign oil in China and a remarkable reduction on need for foreign oil in the U.S.”

Banks went on to highlight America’s opportunity to establish strong free trade on the global stage through its abundant energy resources, which could ultimately reduce tensions between the two world powers.

“The U.S. should be the champion of free trade. […]Plenty of energy supplies are out there but if countries start hoarding them for themselves, then it sets the stage for conflict. From a security perspective, when the U.S. thinks about energy policy and energy trade restrictions, it needs to think about the bigger picture.”

To listen to the full podcast, click here.

The interview comes on the heels of a white paper recently released by Banks and ACCF, Managing Pacific Rim Security Risks With U.S. Energy, that concludes antiquated U.S. energy policies are holding us back from aiding our allies who face significant energy security vulnerabilities.


The Clock is Ticking for Crude Oil Exports

The increasing debate to lift the ban on crude oil exports is pushing up against the holidays and the end of the year. As such, members of Congress are using almost every legislative tactic to show the Obama Administration they are serious about modernizing U.S. energy policy.

Today, the U.S. House of Representatives passed H.R. 8, an energy bill that includes language from Representative Joe Barton’s (R-Texas) original exports bill H.R. 702 that would greenlight international sales of domestically produced crude oil. Proposed by House Energy & Commerce Committee Chairman Fred Upton (R-Michigan), H.R. 8 is an all-inclusive energy bill that would update the current electrical grid, increase efficiency and speed up natural gas exports.

Currently, the United States is the only country that has a self-imposed sanction on its exports. No other American commodity suffers such an infliction. But by allowing our crude oil into the global market, American producers will be able to compete on an equal playing field with the rest of the world. This benefits the American consumer by allowing greater competition, resulting in competitive prices. It would also increase jobs in both direct and supportive industries. According to an IHS study, allowing crude exports will grow jobs by 394,000 annually, providing further security to Americans.

By repealing the exports ban, the House has sent a global message announcing America’s intention of becoming a leader in world energy. Now, the ball is in the Senate’s court. Additional legislation, such as the must-pass omnibus and the tax extenders package, are alternative vehicles for allowing crude exports which are currently undergoing negotiations. However, in order to stand in the spotlight, Washington must act quickly to ensure legislation is passed in both Houses of Congress.


Upton’s Energy Bill to Include Crude Oil Exports

As Congress continues down its to-do list, there is another legislative opportunity to lift the ban on crude oil exports before the end of the year:  a wide-ranging energy bill to be voted on in the House of Representatives this week. If repealed, the 40-year-old ban would bring countless benefits to the United States by supplying the world with more affordable and competitive energy, while also providing Washington with new geopolitical benefits.

Multiple Members of Congress, including bill author House Energy and Commerce Committee Chairman Fred Upton (R-Michigan), have been pushing for new common-sense energy policies that repeal the bans and limitations on America’s energy exports. However with the White House threatening a veto on crude exports legislation (including this proposed bill, H.R. 8, and H.R. 702, which already passed in the House), Congress is looking to confront the Administration in an all-inclusive energy bill.

Although countless studies have shown that allowing crude oil exports would improve the U.S. economy and national security, the White House still remains firm in its threat and believes America’s focus should be on renewable energy. Nicolas Loris, an economist and a Herbert and Joyce Morgan Fellow at the Heritage Foundation, argues that Washington’s mentality towards renewable energy should not be in exchange for lifting the crude oil ban. Instead, “they should be allowed to succeed-or fail- in the open market” together. As a result of free trade in oil and other energy exports, the world would be supplied with cheaper energy through the competition and innovation of an open market.

Crude oil exports would not just provide economic benefits to the U.S., but it would also supply Washington with an alternative geopolitical tool. Unstable nations, like Russia and Iran, currently use energy supplies to manipulate influence over other countries. If the ban is lifted, the ability of nations to use energy as a threat is reduced since U.S. allies would have a source of stable energy.

It’s been four decades since Washington placed the ban on crude oil exports and since then America’s energy landscape has evolved, resulting in the need for new energy policies. Washington must understand this changing landscape and begin moving forward with 21st Century energy, like Representative Upton’s legislation, and lift the ban on crude oil exports.


The Time to Lift the Ban on Crude Oil is Now

In a recently published op-ed in The Hill, Bernard Weinstein emphasizes the need for Congress to take action and lift the ban on crude oil exports before the end of the year. This ongoing debate has been prolonged by obstacles focused on the ideology against fossil fuels rather than the overwhelming evidence underscoring the many benefits of exporting America’s energy.

An associate director of the Maguire Energy Institute and an adjunct professor of business economics at the Cox School of Business at Southern Methodist University, Weinstein argues that the U.S. is partly at fault for the world’s crude oil glut through its own self-inflicted ban on exports. As a result, the price of oil is dropping, and the oil and gas industry in America has cut “more than 90,000 jobs since last summer, a number that could double if the export ban is not lifted.”

We hope lawmakers in Congress understand the significance of what is at stake. The oil and gas industry bring $1.2 trillion into America’s GDP and support 9.3 million jobs. Energy companies make up six of the top 25 companies who reinvest in the U.S. As Weinstein mentions in the op-ed, “lifting the crude oil restrictions could generate as much as $13.5 billion in federal, state, and local tax revenue by 2020” and another study predicts it will bring an additional 1.3 million jobs to Americans. And even though the House of Representatives has passed legislation lifting the ban, the White House refuses to acknowledge these facts—but still takes credit for the nation’s energy boom.

As the Administration continues threatening a veto on any legislation regarding crude oil exports, other countries are stepping up and taking advantage of the increasing global demand. Countries such as Russia and Saudi Arabia are providing crude oil at record rates and unstable Iran is about to join the energy market as well. This leaves the U.S. as the only nation with sanctions on its energy exports, harming us in the process as well as our allies who would welcome a stable source of energy from a friendly ally.

Currently, members of Congress are working hard to see that the ban is lifted before the end of year. Senator John Hoeven (R-North Dakota) is hoping to attach language on crude oil exports to a must-pass highway funding legislation. Failing that, the omnibus spending bill remains the only end-of-year legislative vehicle. The White House and opponents in Congress should recognize the positive economic impacts the energy industry has on our nation and, as such, encourage policies like crude exports that will expand upon that impact to the continued benefit of all Americans.