Senator Bennet: Crude Oil Exports an Avenue to Ensure America’s Energy Security

Last week, another member of Congress has shown he is not afraid to step over party lines on the issue of crude oil exports in the interest of protecting and enhancing America’s energy security and future. Democratic Senator Michael Bennet of Colorado declared Wednesday at an energy summit that he would back the idea of U.S. oil exports if it meant it would improve the U.S.’ sense of energy security.

“In the context of being able to move us to a more secure energy environment in the United States (and) a cleaner energy environment in the United States, yes,” Bennet stated when asked if he supports crude exports, according to the Houston Chronicle. The notion of crude oil exports serving as a means to enhance our nation’s sense of energy security is one that both elected officials and policy experts have been promoting for quite some time now. In fact, a recent study from Rice University concluded that “removing the export ban yields positive impacts by providing a more stable and secure source of oil to the world,” and would as a result improve U.S. energy security.

Senator Bennet’s announcement comes only a week after fellow Democrat and Senate Minority Leader Harry Reid (R-NV), came out indicating that there was clearly room for compromise from both parties on this issue, given the tremendous opportunity that’s at stake. “We should sit down and try to work something out with the people who are so focused on exporting it and those people who are so focused on not exporting it and come up with a deal,” Reid said to Politico.

With August Recess drawing to a close, it is encouraging to see that our nation’s leaders are showing signs of bipartisanship and cooperation on this issue. The decision to export crude oil is one that should be immune to partisan politics as usual. Elected officials from both parties have received the message loud and clear that American oil exports serve the best interest of our nation as a whole. Now more than ever is the time for Congress to come together and continue working towards an energy secure America.

EIA Report Finds U.S. Crude Oil Exports = Consumer Benefits for Americans

Tuesday morning, the Obama Administration released a new report highlighting the economic benefits consumers would experience as a result of removing export restrictions on U.S. crude oil. The report, which was the latest in a series of analyses issued by the U.S. Energy information Administration (EIA), examined various export scenarios  to determine the effects lifting the ban on crude oil exports would have on domestic crude oil production, pricing and refinery operations.

Though the report cited that the effects of lifting the ban would largely be dependent on global market conditions, especially price differential between Brent and Western Texas Intermediate (WTI) prices, it does indicate that the risks to removing this ban for American consumers is negligible. Dr. Margo Thorning, Senior Vice President and Chief Economist for the American Council for Capital Formation (ACCF), offered her valuable insight on the EIA’s findings in a statement released Tuesday afternoon:

Today’s Energy Information Administration report should finally put to rest any concerns lawmakers may have about the impact allowing U.S. crude oil exports will have on American consumers. The nation’s energy renaissance should be a reason to open up our energy markets, not restrict them. It’s not only the increased economic growth and lower gas prices that we stand to lose by keeping this outdated energy policy in place, but our global credibility as well. This begs the question, why is the government standing in the way of a policy change that it itself finds will benefit American taxpayers? It is time for Congress and the Obama Administration to take the next step and allow the United States to be a full participant in the global energy market, help our allies achieve energy security, and bring much-needed economic prosperity here at home.”

The report also considers what removing crude export restrictions would mean for overall domestic production rates. EIA forecasts that production totals in 2025 would be 470,000 b/d higher in the event that restrictions on crude oil exports are removed. Higher rates of production means a healthier and more stable energy sector translating directly to an increase in domestic job growth. In fact, policy experts from IHS, Brookings, the Aspen Institute, and ICF International all predict a significant increase in new jobs across the country resulting from a boost in production if crude oil exports are allowed.

As Congress prepares to return to Washington following the Labor Day weekend, these findings should set the tone for the energy discussion and our nation’s need for crude oil exports. An increase in production and the resulting domestic job growth, paired with direct consumer benefits for Americans nationwide, makes the decision of whether or not to lift the ban on crude oil exports an easy one. Now is the time for our leaders to work towards promoting a new age of global American energy dominance and independence, by ensuring a swift and full repeal of the ban U.S. crude oil exports.

In Case You Missed It (August 21-28)

August recess may be winding down, but support for U.S. crude oil exports continues to gain momentum. With a congressional vote likely to take place sometime this fall, we can expect to see Representative Joe Barton (R-Texas) – a long-time proponent of lifting the export ban – leading the way in the House. This week, an article in The Texas Tribune highlighted the support his legislation has received from his fellow Texas colleagues – including three Democrats who have signed on as co-sponsors. Rep. Barton called the antiquated ban on crude the last vestige of energy policy from the 1970s oil shortage crisis, noting “We’ve repealed every one of those except the ban on crude oil exports. The only reason we didn’t repeal it then is nobody brought it up. I wish I’d repealed it back in 2005 because it would have sailed through.”

Another week, another prominent editorial board citing the positive impact of crude oil exports as reason for repealing the ban. The editorial board of the Las Vegas Review-Journal, the largest paper in Senate Democratic Minority Leader Harry Reid’s home state, highlighted the resulting potential economic advantages. “Reversing the now-pointless oil export ban would provide a boost to our economy…Lifting the ban also would put a whole lot of people back to work. … Not only would lifting the ban help our economy and boost our global influence, it would also help our political allies,” wrote the editorial board. It certainly is encouraging to see that in Congress’ absence from our nation’s capital throughout the month of August, the movement for crude oil exports never skipped a beat.

This week’s notable op-eds/articles:

  • The Texas Tribune, 08/27/2015, “Texans in Congress Again Target Oil Export Ban,” by Abby Livingston
  • Wausau Daily Herald, 08/26/2015, “End ban on crude oil exports”
  • Albuquerque Business First, 08/25/2015, “Locals get vocal on oil export ban – it’s about jobs and economy, they say,” by Dan Mayfield
  • Penn Live, 08/24/2015, “Crude oil exports will benefit consumers and our economy, and here’s why: John Peterson,” by John Peterson
  • Investor’s Business Daily, 08/24/2015, “Dems Change Tune On Exporting Crude As Oil Plunges,” by Gillian Rich
  • UPI, 08/24/2015, “Boehner: Oil export ban thwarts success,” by Daniel J. Graeber
  • Las Vegas Review-Journal, 08/23/2015, “EDITORIAL: End oil export ban,” by Editorial Board
  • Richmond Times-Dispatch, 08/22/2015, “Fredericks: Lift the crude oil export ban,” by John Fredericks

From Our Blog This Week:

 Be sure to click HERE and check us out on Twitter by following us at @UnlockCrude so you can stay current by receiving daily updates about the most important news and discussions surrounding the crude oil exports conversation.

Geopolitical Benefit of U.S. Crude Oil Exports Continues To Turn Heads

Senator Robert Menendez’s (D-NJ) remarks from last week highlighting the national security and geopolitical benefits of allowing strategic U.S. crude oil exports continue to resonate. Senator Menendez urged Congress and the Obama Administration to scrap the Iran nuclear agreement and to assist U.S. allies in need by considering American crude oil exports to countries that had previously purchased Iranian crude. While Senator Menendez’s statements did not signal a shift in his opposition to repealing the 1970’s era ban on crude, they did however demonstrate that the national security implications of allowing crude oil exports is apparent to both sides of the political aisle.

Senate Committee on Energy & Natural Resources Chairwoman Lisa Murkowski (R-AK) has already weighed in on this crucial argument in support of crude exports. In May, Senator Murkowski discussed the counterintuitive nature of removing oil exports restrictions on nations like Iran, yet leaving them in place on ourselves, especially at a time when our allies are in such desperate need of our energy supply. “We’re going to let Iran go ahead and sell their oil anywhere. Japan needs it, all these other nations need it, and we’re going to restrict ourselves. At the end of the day, all we’re doing is sanctioning ourselves. That’s not good policy,” she stated.

However, not everyone is on board with allowing the U.S. access to free and open markets, while assisting our allies in need. A spokesman for a coalition of refiners recently opposed the idea of enabling crude oil exports, stating that the world is currently “overflowing with oil” and that “our allies aren’t facing a supply disruption.”

These claims could not be further from the truth.

A recent report by the American Council for Capital Formation (ACCF) found that U.S. allies, particularly those in East Asia, continue to be overly-dependent on a single restrictive supply of energy. Taiwan, South Korea, and Japan are all currently over 90 percent dependent each on energy imports. Permitting the U.S. to step in and serve as a reliable and plentiful source of energy for our global allies will both diversify overall supply while sending the strong message to our allies that we have not withdrawn our support for them from their regions.

The positive impact American crude oil exports would have on our national security is evident. Lifting the ban on U.S. crude oil exports sends a strong message: the U.S. supports its allies, and we will continue pursuing competitive and open markets.

Senate Democratic Minority Leader Sees Room for Compromise on Crude Exports

In an interview with Politico last week, Senate Minority Leader Harry Reid (D – Nev.), the chamber’s highest ranking Democrat, acknowledged there is room for compromise on ending the current ban on U.S. crude oil exports. While declining to take a side in the debate, Senator Reid advised lawmakers that, “We should sit down and work something out with those who are so focused on exporting it and those who are focused on not exporting it and come up with a deal.”

Over the weekend, the Pittsburgh Tribune-Review published an op-ed from House Speaker John Boehner (R-Ohio) who expanded on his previous statements in support of lifting the crude oil ban. Discussing the obstacles to taking action, he wrote, “You see, for all its success, this energy boom is currently running into a brick wall in the form of other federal government policies that date back to the 1970s. Even as the Obama administration seeks to lift sanctions on Iran’s oil exports, the law is still keeping our own producers from exporting crude oil. Most Americans don’t even know that we have such a ban, but we do, and it costs them every time they fill up their gas tank.”

Working towards measures to lift the crude oil exports ban is going to take cooperation and compromise from both Republicans and Democrats. With the 2016 election just around the corner, it’s tempting for incumbents to stick to the party script on the campaign trail. But we must think beyond the next election as we craft a new energy policy. It is encouraging to hear the Democrats’ party leader acknowledge the possibility, even the need, for compromise on crude oil exports. As Congress returns from recess next month, we hope both parties take the opportunity to sit down and work together to move this nation towards a brighter energy future, one that fully embraces the possibilities that exist before us.

In Case You Missed It (August 14th – 21st)

It might be August recess on Capitol Hill, but that hasn’t slowed down talk of allowing U.S. crude oil exports, surprisingly from Democrats who have opposed taking such action. Senate Minority Leader Harry Reid (D – NV) came out this week advocating compromise from both parties. “We should sit down and work something out with those who are so focused on exporting it and those who are focused on not exporting it and come up with a deal,” Senator Reid stated in an interview with Politico. Similarly, another vocal proponent of keeping the outdated ban on crude in place, Senator Robert Menendez (D – NJ) urged both Congress and the Obama Administration to consider strategic crude oil exports for national security reasons. While Senators Reid and Menendez did not declare outright support for ending the crude oil ban, it was a notable change from their previous opposition.

Maintaining a weekly trend, editorial boards across the country continue to voice their strong support of lifting the ban on crude exports. Notably, the editorial board for The Oklahoman – the Sooner State’s largest paper – made the sound case for ending the ban in an editorial which detailed the economic logic of ending self-imposed restrictions on one of our nation’s most abundant resources.The editorial board reached the same conclusion as multiple economic studies have: ending the export ban would create jobs, lower gas prices, and provide more tax revenue to the government.

This week’s notable op-eds/articles:

  • The Hill, 08/20/2015, “Reasserting American leadership through strong energy exports,” by George David Banks
  • Tulsa World, 08/20/2015, “Tulsa World Editorial Board: End the ban on crude oil exports,” by Editorial Board
  • Times Free Press, 08/19/2015, “Personal Finance: At last, progress on oil exports,” by Dave Flessner
  • Houma Today, 08/18/2015, “State congressmen praise decision to lift oil export ban to Mexico,” by Jacob Batte
  • Seeking Alpha, 08/17/2015, “Why Lifting Of Crude Exports Is More Important Now Than Ever Before”
  • The Washington Times, 08/17/2015, “An antiquated oil export ban,” by Michael James Barton
  • The Monitor, 08/16/2015, “COMMENTARY: A new world energy landscape,” by Rep. Henry Cuellar
  • The Sanford Herald, 08/16/2015, “Letter: Congress should allow U.S. oil exports”
  • Fox News Latino, 08/15/2015, “U.S. allows trading with Mexico in easing of crude oil export ban”

From Our Blog This Week:

Be sure to click HERE and check us out on Twitter by following us at @UnlockCrude so you can stay current by receiving daily updates about the most important news and discussions surrounding the crude oil exports conversation.

National Security Benefits of Crude Oil Exports Should Not Be Overlooked

This week, Senator Robert Menendez (D – N.J.), former chairman of the Senate Foreign Relations Committee, proposed the idea of using “strategic exports” of U.S. crude oil as a geopolitical tool.  While not advocating a complete repeal of the ban on domestic crude oil, it’s a notable change in position for the senator who has historically been a vocal advocate of maintaining export restrictions. Senator Menendez urged Congress and the Obama administration to reject the Iran nuclear agreement and assist U.S. allies by considering exports of American oil to countries that had previously purchased Iranian crude. His reasoning is certainly in line with a long list of elected officials, economists and policy experts who recognize the vast national security benefits repealing the 40 year ban on crude oil exports would bring to the U.S.

Just last month, Senator John Cornyn (R-Texas) spoke at an event hosted by the Center for Strategic and International Studies (CSIS) during which he spoke of the national security benefits of allowing crude oil exports. Senator Cornyn noted that our allies have been regularly calling on the U.S. for years now lift the ban on crude exports providing a reliable and diversified supply of energy for the global market. With regards to the impact crude exports would have on national security, Senator Cornyn argued that by making American energy available to the world market, the U.S. could mitigate opposing nations’ ability to damage our own interests by using our abundant supply of energy as a strategic tool.

Furthermore, the American Council For Capital Formation (ACCF) released a report last month which highlights our allies’ desperate need for access to U.S. energy. In East Asia alone, Japan, South Korea, and Taiwan each remain over 90 percent dependent on a restrictive single source of energy imports. Granting the U.S. approval to enter the global market would send a strong message to the world that we as a nation have not withdrawn our support for free and open markets nor have we forgotten our allies in need.

We can no longer afford to overlook the national security implications of continuing to impose self-restrictive energy trade policies. It’s time our leaders embraced a new energy strategy that will serve the U.S.’ best interests, here at home and abroad.

Former Energy Secretary: Crude Oil Export Ban Is A Relic Of Times Past

Supporters of lifting the ban on U.S. crude oil exports gained an important ally this week as former U.S. energy secretary and New Mexico governor Bill Richardson weighed in on the importance of allowing the U.S. to export crude oil to all regions of the world. “If we continue with these oil export waivers, it’s going to be good for the country. It (the crude oil exports ban) makes no sense. It’s a relic of the ’70s and the ’80s,” Richardson stated during an interview on CNBC. His comments come on the heels of recent developments permitting U.S. oil swaps with Mexico.

These recent trade developments with Mexico, while encouraging, are not enough. In order to realize the our full economic and diplomatic potential, the ban on crude oil exports must be fully repealed to serve the best interests of all Americans across the nation.

A recent op-ed in the Washington Times examined the once necessary but now harmful ban on American crude oil exports, noting that in today’s world, the crude oil export ban both restricts and limits our nation’s overall economic potential as well as our ability to thrive in the global energy market.

As alluded to in the op-ed, following the Arab oil embargo in 1975, the U.S. had legitimate reasons for instituting a ban on domestic oil exports. But much has changed in forty years. In addition to significant technological advances, the U.S. has become the world’s largest producer of oil with an astounding 11 million barrels produced each day. Not being allowed to tap into the global energy market means the U.S. has an incredible abundance of oil, but nowhere for it to go. Limited refinery space has set the U.S. on a path towards a domestic oil surplus which ultimately poses as a detriment to the overall economy and particularly to the consumer.

Lifting the exports ban would remedy this predicament by enabling the U.S. to share its plentiful supply of energy with allies in need and with the refining capacity to process the light oil produced domestically. The U.S.’s emergence as a new player in the world market would both diversify overall global supply while strengthening our own overall domestic economy. A recent study by IHS discovered that lifting the ban on oil exports would generate an increase of overall national GDP by an average of anywhere from $86-$170 billion over the 2016-2030 timeframe. In addition, the American Council for Capital Formation’s (ACCF) latest report concluded that an increase in supply diversity would undoubtedly bring about greater political and diplomatic flexibility with U.S. allies in East Asia and beyond. As the list of notable and influential supporters grows, our path forward is clear: it’s time to shed our energy past and embrace our energy future.  

Approved Mexico Oil Swaps Show the Times Are Changing

Late last week, the Obama administration announced that they have approved limited sales of U.S. crude oil to Mexico for the first time, marking another milestone in loosening the ban on crude oil exports.

To date, the U.S. Commerce Department has allowed few companies to ship slightly refined crude oil (condensates), and a few other exceptions have been made including U.S. exports to Canada. Despite this, as a nation we hit record high production and storage levels this year. Maintaining the current restriction holds America back from realizing the significant economic, geopolitical and price-related benefits of our energy resources.

The deal, which will allow Mexico to exchange heavy oil produced for the light crude pumped in the U.S, is a significant step and signals that the Administration is moving closer to changing the status quo to better match our current energy landscape of abundance versus that of scarcity.

And the potential benefits are huge. Brookings predicted GDP growth over the next 25 years – if the ban was lifted this year – to exceed $1 trillion. The United States will not be able to maximize the benefits provided by this significant development until we lift our ban on crude oil exports. We should be doing everything in our power to support the continuation of the oil and natural gas renaissance that has carried our economy out of the depths of the Great Recession.  Overturning the crude oil exports ban is a sure way to make these predictions a reality.

Maximizing Trade Benefits of the Shale Revolution Starts With Crude Oil Exports

This week John Deutch, professor of chemistry at MIT and former Director of the Central Intelligence Agency, was featured in The Wall Street Journal, calling for an end to the 1970’s era ban on exporting U.S. crude oil overseas. Deutch joins Leon Panetta as the second former Director of the Central Intelligence Agency to promote the modernization of the U.S.’ energy policy regarding crude oil exports.  In his commentary, Deutch cites the domestic and foreign trade implications of allowing access of U.S. oil into the global energy market.

Deutch first examines the current U.S. trade balance, referencing the findings from the Energy Information Administration (EIA)’s Annual Energy Outlook. The report projects a decline in U.S. oil and natural gas liquids imports from a high of roughly 60% in 2011 to under 20% in 2040 due to the significant volume of crude oil currently at our disposal. The positive impact of allowing the U.S. to export its crude oil would result in an even trade balance while at the same time effectively reducing the quantity of net imports.

Contrary to what many argue, lifting the ban and reducing U.S. net oil imports would not harm relations with our foreign trading partners, as we would simply be cutting back on imports not eliminating them altogether. As a matter of fact, all signs point to crude oil exports enhancing and strengthening ties with our international allies in the world market. As detailed in a recent report by ACCF, many of our East Asian allies are  currently over 90 percent dependent on energy imports from a single source. By sharing our vast energy resources with our allies, the U.S. could transform the current energy market into one that is far more competitive, leading to increased economic benefits for domestic and foreign consumers.

The support of thought leaders, such as Deutch and Panetta, for changing this policy demonstrates that this is the right path forward for America. Continuing to prohibit American energy from reaching the global market, is harmful and counterproductive to the U.S.’ domestic and foreign trade agendas. Crude oil exports would significantly contribute towards balancing the overall trade balance, while lending a helping hand to our allies in need. It’s time for our leaders to take a logical and economical approach to this debate and end the ban on U.S. crude oil exports.