Crude Oil Export Movement Continues To Gain Traction

Over the weekend, The Wall Street Journal published an article titled “Move to Allow U.S. Oil Exports Accelerates” which examined the growing number of industry experts and members of Congress expressing their support for domestic crude oil exports. Along with highlighting notable supporters of repealing an outdated ban on our abundant energy resource, the article details the vast economic advantages trading with the global energy market would present to the U.S.

Among those mentioned in the article is Jason Bordoff, founding director of Columbia’s energy center and former Obama White House energy adviser. Bordoff’s own study from earlier this year concluded that easing exports restrictions for crude oil could lead to an increase in production. Higher rates of production would drive up rates of domestic job growth in efforts to produce enough energy to satisfy the demands of the global market. This natural economic progression will ultimately contribute to a healthier and more stable energy sector. Other studies included are IHS, Brookings Institution, and Resources for the Future, all of which reached the same conclusion: exporting crude oil would be, on balance, good for the U.S. economy.

The Wall Street Journal article comes on the heels of encouraging remarks made on Friday by U.S. House Speaker John Boehner (R – OH) who expressed his support for ending the ban on oil exports while discussing the Department of Labor’s July unemployment report. “That’s why Republicans remain focused on advancing common-sense solutions that address Americans’ top priorities. We’ve passed jobs bills to increase energy and lower gas prices, expand markets for American-made goods and services, and cut red tape to help small businesses and manufacturers grow. We’ll continue that progress by working to lift the oil export ban and create an estimated one million new American jobs,” the Speaker stated.

The only thing more evident than the problem limiting our domestic energy sector in the U.S. is the logical and economical answer to solving it: lifting the ban on crude oil exports would singlehandedly and significantly incentivize production, which would lead to the creation of hundreds of thousands of new jobs for hardworking Americans. Our leaders and experts agree, it’s time to embrace the American energy renaissance by allowing U.S. crude oil exports.


In Case You Missed It (July 31st – August 7th)

Editorial boards from across the country continue to sound the drumbeat on lifting the crude oil exports ban with the Washington Post being the latest to weigh in. In its editorial, the Post called the ban “irrational and outdated” and noted “the significant economic benefits that the country would reap from a healthy energy production sector.”

Action on the crude export ban could be on the congressional horizon as this week Rep. Joe Barton (R – TX) indicated that the ban could be coming to an end sooner rather than later. Speaking at an event in Houston, Barton said he was increasingly confident that the crude oil export ban can be lifted this year. “All the signals that we get are that if this bill gets to the president’s desk as a stand-alone bill, he will sign it. I feel pretty confident that I can tell you folks this is going to happen,” he told audience members. On Capitol Hill, the roster of Congressional members voicing their support for removing the crude oil export ban grew as Roll Call  published an op-ed by Rep. Markwayne Mullin (R-OK) which called for immediate repeal, citing the energy sector’s role as the backbone of the American economy and its’ communities, as well as enhanced incentives for innovation and job creation.

This week’s notable op-eds/articles:

  •  E&E, 08/04/2015, “Crude export ban will be lifted — Rep. Barton,” by Nathaniel Gronewold
  • The Denver Post, 08/04/2015, “Guest Commentary: Lift export ban on crude oil,” by Ken Buck
  • The Times-Picayune, 08/03/2015, “Louisiana Rep. Boustany: Support for U.S. oil exports ‘picking up steam’,” by Jennifer Larino
  • The Detroit News, 08/04/2015, “Our Editorial: Lift America’s crude oil export ban”
  • Washington Post, 08/02/2015, “Lifting the export ban on crude oil would be a boon to the U.S. economy,” by Editorial Board

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.


Making Crude Oil Exports Part of the Presidential Discussion

With the first Republican Presidential Primary debate set to take place this evening, be sure to keep an eye out for one issue that will be heavily debated this election cycle; the future of U.S. energy policy and potentially, what crude oil exports would mean to efforts at continuing the nation’s energy renaissance. In fact, candidates from both sides have already expressed their support for lifting the 40 year-old ban on exporting crude oil, citing the multiple benefits in doing so: an increase in jobs, energy security, and enhanced geopolitical relations.

Here are statements from candidates who have already taken a stance on our energy future:

  • Carly Fiorina (R): “I would lift the restriction on exporting oil to enable America to be energy independent.” (Energy Fuse)
  • Governor Scott Walker (R-WI): “Think about the impact we could have, not just economically, but from a security standpoint, if we lifted that crude oil ban that has been in place and allow to export in places like our allies in Europe.” (Wisconsin State Journal)
  • Former Governor Mike Huckabee (R-AR): “We need to be a country that looks at the world and realizes energy is the backbone of making this world function, and we start talking about what we can do rather than what we can’t do.” (The Hill)
  • Former Governor Rick Perry (R-TX): “If energy is going to be used as a weapon, America needs to have the largest arsenal. But our arsenal, that arsenal of American energy, will not be used to bully other nations, but to set them free.” (The Hill)
  • Senator Marco Rubio (R-FL): “Selling some of our vast energy resources will lead to explosive growth and higher paying jobs here at home.” (Deseret News)
  • Senator Ted Cruz (R-TX): “We are seeing the beginning of an American energy renaissance. And if the federal government doesn’t get in the way and mess it up, that has the potential to transform the situation for so many people who are struggling.” (Ted Cruz Official Website)
  • Governor Bobby Jindal (R-LA): “Do we harness the energy resources that are here in our country to grow our economy, to create good-paying jobs, to lower the cost of energy for our people? Or do continue in our current path, where we make energy more expensive, more scarce?” (The Hill)
  • Governor Chris Christie (R-NJ): “The long-term benefits of open markets for U.S. energy exports are also worth considering in light of the response, particularly in Europe, to Russian aggression in the Ukraine.” (The Hill)
  • Former Governor Jeb Bush (R-FL): “The one thing that we have at our disposal for the quickest jump-start for sustained economic growth is the energy sector.” (CBS – Denver)
  • Former Secretary of State and Senator, Hillary Clinton (D-NY): “Assuming that our production stays at the levels, or even as some predict, goes higher, I do think there’s a play there … This is a great economic advantage, a competitive advantage, for us. … We don’t want to give that up.” (Politico)

Lifting the ban on crude oil exports would incentivize overall energy production in the U.S., drive continued job creation and provide a sorely needed jolt to the U.S. economy. Furthermore, exporting our oil to our allies would allow us to maintain stable international relations with our trade partners.

These candidates have already taken the first step towards endorsing America’s continued energy dominance. Now, let’s join them in taking the next step by continuing this conversation and spreading the word on the significant benefits of removing the ban on crude oil exports.


Washington Post Editorial Board: Crude Oil Exports Means Fair Markets and Domestic Economic Growth

In the past week, the editorial boards from two of the most respected newspapers in the world made the strong economic case for allowing U.S. crude oil exports. Following the publication of an editorial from the Wall Street Journal last Wednesday, this week the Washington Post editorial board weighed in favorably for the second time on the debate over the ban on crude oil exports. The editorial, titled “Lifting the export ban on crude oil would be a boon to the U.S. economy,” presented the economic case for removing the 40 year-old domestic crude oil exports policy, concluding that lifting the ban would result in an array of economic advantages for American consumers and nation’s overall economy.

The Washington Post editorial board referenced the most recent analysis from IHS which takes into account the effect U.S. crude oil exports would have on domestic energy production and job growth as well as overall national GDP, via the supply chain. According to the report, U.S. access into the global energy market would increase domestic oil production by as much as a 2.3 million barrels a day, while adding as many as 859,000 potential new jobs through the supply chain over the 2016-2030 period. The report also concluded that overall national GDP would undergo an annual increase of, on average, between $86- $170 billion throughout the same timeframe.

When you consider the long list of positive economic reasons why the U.S. should share its plentiful supply of crude oil with the world market, it’s hard to imagine why anyone would be opposed to ending the antiquated ban on crude. However, as the Post also points out, the majority of proponents for keeping the ban in place are a small handful of U.S. refiners who purchase oil at a lower domestic price, then turn around and sell their refined product at an international rate. If the U.S. is to be a nation known for practicing principles of free trade, we must demonstrate that in all sectors of our economy, and not pick and choose which sectors they apply to.

Allowing U.S. crude oil exports will ultimately lead to a more competitive global energy market, while increasing domestic energy production, job growth, and overall national GDP. This is a critical issue that must be brought the forefront of our elected leaders’ agendas, in order to swiftly and efficiently reap the benefits of our nation’s current energy boon. Ending the ban on crude oil exports is a step in the right direction towards an era of American energy dominance.


In Case You Missed It (July 24th – July 31st)

This week, the American Council for Capital Formation (ACCF)’s, senior vice president Dr. Margo Thorning issued a response to a new report by the CRUDE Coalition claiming lifting the ban on crude oil exports would raise consumer prices. Picking apart the claims from the report, Dr. Thorning explained the realities of the crude oil exports market and why lifting this ban will actually lead to increased production, improved overall trade balance, enhanced national security and ease downward pressure on fuel prices for the everyday consumer.

Thursday on Capitol Hill, the Senate Energy and Natural Resources Committee approved Senator Lisa Murkowski’s (R – AK) OPENS Act, which would allow U.S. crude oil exports to the global market. This came less than 24 hours after the movement for crude exports gained an impressive new supporter in House Speaker John Boehner (R – OH). Speaker Boehner cited the importance of revising our energy policy on exports to reflect the times in which we live, and the resources we now have at our disposal. “Until recently our nation’s energy policy was rooted in a scarcity mindset that went back to the 1970’s, but now America is experiencing an energy boom and our policy needs to follow suit,” the Speaker told reporters. Speaker Boehner followed up by stating that ending the crude oil exports ban will lead to increased U.S. job growth, oil and gas production, and enhanced relations with our foreign allies and trade partners.

This week’s notable op-eds/articles:

  • Fox News, 07/30/2015, “Senate panel passes bill lifting crude oil export ban”
  • World Oil, 07/30/2015, “Crude oil exports would benefit Great Lakes Region, says Sen. Murkowski”
  • Fox News, 07/29/2015, “Boehner backs push to lift ban on US crude oil exports”
  • Alaska Dispatch News, 07/29/2015, “Murkowski drive to end ban on crude oil exports inches forward,” by Erica Martinson
  • Philly.com, 07/29/2015, “Lift U.S. ban on oil exports,” by Donald J. Boudreaux
  • Wall Street Journal, 07/29/2015, “Oil Export Momentum”
  • Tyler Morning-Telegraph, 07/25/2015, “It’s time to repeal the oil export ban,” by Editorial Board
  • Evansville Courier & Press, 07/26/2015, “Comment: Time to end oil export ban,” by Don Jones
  • The Hill, 07/23/2015, “Mr. President: The 1970s called, they want their crude oil export ban back,” by Isaac Orr

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.


Speaker Boehner: U.S. Policy Should Reflect Our Current Energy Boom

House Speaker John Boehner (R – OH) on Wednesday publicly conveyed his support for ending the outdated ban on crude oil exports for the first time. Speaker Boehner cited increased rates of domestic job growth as well as enhanced consumer benefits and geopolitical relations with our allies, as reasons for updating the antiquated policy on crude exports. “Until recently our nation’s energy policy was rooted in a scarcity mindset that went back to the 1970s, but now America is experiencing an energy boom and our policy needs to follow suit,” Speaker Boehner told reporters.

The Speaker added that lifting the crude exports ban will create 1 million new jobs, while putting downward pressure on fuel prices, ultimately benefiting both consumers and U.S. allies alike. This notion is supported by a collection of reports from high-profile public policy institutes. One study, by IHS, found that at peak production in a “potential production case,” the U.S. economy would add 1.537 million jobs in 2018, as a direct result of the nation’s ability to export crude oil. That same study also supports Speaker Boehner’s claim that ending the ban will benefit consumers by placing a downward pressure on fuel prices, saving motorists and estimated $265 billion from 2016-2030.

With regard to our foreign allies, a new report by the American Council for Capital Formation (ACCF) points out that Japan, South Korea, and Taiwan are all more than 90 percent dependent on energy imports from a single restrictive supply. At a recent Senate Committee on Banking, Housing, & Urban Affairs hearing, Michele Flournoy, CEO of the Center for a New American Security, presented a mutually beneficial solution to this scenario. Flournoy stated that U.S. crude oil exports would, “give us the tools to be able to step in and help our allies who are dependent on other countries who may have interests counter to our own. The U.S.’ ability to export crude oil will diversify their supply.” Diversifying the global market supply will in turn lead to a more competitive market, benefiting both the domestic and foreign consumer of energy.

On Thursday the Senate Energy and Natural Resources Committee approved Alaska Sen. Lisa Murkowski’s OPENS Act, which would allow U.S. crude oil exports to the global market. In the coming weeks, it is critical that the positive benefits of ending the ban are heard by more leaders such as Speaker Boehner are heard on this issue by Americans nationwide. The U.S. has a timeframe in which it can effectively reap the economic and geopolitical benefits of the shale revolution. Once the window is closed we may never see another opportunity like this again. We must tap into our incredible supply of energy and share it with our allies in need, to fortify our domestic economy while enhancing our geopolitical leverage and relations.


Experts Shed Light On Special Interest Groups’ Illogical Claims Regarding Crude Oil Exports

Tuesday morning, a panel of energy industry experts and executives testified before the Senate Committee on Banking, Housing, and Urban Affairs in a hearing examining the economic effects of ending the crude oil exports ban, and the potential impact to the U.S. economy. While most of the panelists were supportive of ending the out dated policy, Leo Gerard, president of United Steelworkers, was quite vocal in conveying his opposition to the matter, claiming that keeping U.S. produced oil at home will allow for greater refining efficiency and increased production.

Dr. Margo Thorning, the senior vice president and chief economist of the American Council for Capital Formation, issued a response shortly after the hearing setting the record straight on the facts behind the economic and geopolitical advantages of allowing crude oil exports:

Withholding U.S. crude oil from the global market has created market distortions and price savings that are not even felt by the average American consumer. The reality is that U.S. crude oil storage is at record levels and refineries are already operating at 95.5 percent utilization causing a supply glut that is jeopardizing much needed small business jobs in this industry and within its large supply chain. But exporting our abundant supply of domestic crude resources will foster a healthy upstream production sector that will keep both U.S. refineries and producers going strong as well as strengthening ties with our trading partners.”

Senator Heidi Heitkamp (D – ND), the ranking member of the Senate Banking Committee and a co-sponsor of bipartisan legislation to end the decades long ban on crude oil exports, said the refining industry’s support for the antiquated federal policy stems from the artificial discount they receive from not trading with the global market but rather at the cheaper Western Texas Intermediate (WTI) pricing. Sen. Heitkamp points out that this artificial discount for refiners, ultimately withholds an array of economic benefits from American consumers. A free and open market, as a result of ending the export ban, would require the refining industry to operate under the same standards and prices as the rest of the world. This ultimately better serves the interests of the nation as a whole, not just a select few.

Additionally, an editorial from The Wall Street Journal further contradicted Gerard’s claims that the ban on crude will ultimately increase domestic production. “A Brookings Institution study estimates that ending the ban could increase U.S. production by as much as 4.3 million barrels a day by 2035,” The Wall Street Journal reported.   

The crude oil export ban is fundamentally wrong. It prevents one of America’s most highly-valued commodities from reaching the market. It is critical that the American people are made aware of the facts on this issue, not one-sided messaging perpetuated by special interest groups. It’s high time this country used the tools we were blessed with, and lead the way towards a new era of American energy independence.


Refineries’ Argument on Crude Oil Exports Ignores Market Realities

Margo Thorning, Ph.D., Senior Vice President and Chief Economist, American Council for Capital Formation

This week the CRUDE coalition, on behalf of Monroe Energy, commissioned a new report by Stancil & Co. which concluded that lifting the crude export ban would actually raise fuel costs. However, this claim – and others made in the report – ignores key market realities and the findings of numerous independent economic analyses, including those conducted by the U.S. Department of Energy over the last six months. Below is a list of the declarations made by the coalition and the real figures that shine a light on the realities of crude oil exports:

Claim 1:
Allowing the export of U.S. crude oil would cause domestic gasoline, jet fuel, diesel, and heating oil prices to increase.

  • FACT 1:  The Stancil report concluded that domestic gasoline and fuel prices hinge upon the domestic price of crude oil or Western Texas Intermediate (WTI.) This statement is incorrect. The reality is the price of U.S. gasoline is tied to the international price of crude oil, or Brent Crude. That being said, basic economic principles lead to the conclusion  that increased supplies of crude flowing into the international market will put downward pressure on the world price of crude oil and on domestic gasoline prices. Experts from the Brookings Institute, IHS, ICF International, Government Accountability Office (GAO), and the Congressional Budget Office (CBO) all make this connection and estimate gasoline price reductions.

Claim 2: Allowing exports of domestic crude oil would have a negative impact on the U.S. trade balance.

  • FACT 2: A recent study by the Energy Information Administration (EIA) presents a high-production scenario which predicts, U.S. crude imports will drop 36 percent from 2013 levels in 2025 even with unrestricted exports of U.S. crude oil. (See Table 3 of the EIA report). As the U.S. continues to export more oil, we will begin to reduce oil imports, but this does not mean we will be eliminating them altogether.

Claim 3: Ending the crude oil export ban will lead to lower refinery utilization and/or possible refinery closures.

  • FACT 3: Ending the ban will have minimal impact on refinery utilization as we are already currently running out of space to store our oil. In addition, the EIA report mentioned above concludes that ending the ban will increase refinery runs in the U.S. (See Table 3 of the EIA report). Exporting crude oil will increase overall domestic production and in turn increase rates of domestic job growth while adding significant value to the American economy. A recent IHS study demonstrates how this will ultimately create between 394,000 and 859,000 new jobs annually nationwide through the supply chain. Furthermore, according to the aforementioned high production and export scenario from EIA, if the ban on crude oil exports is lifted, domestic processing capacity will also increase as $2.3 billion is invested to build 0.8 million barrels per day of new stabilizer and splitter capacity.

Claim 4: Ending the crude oil export ban will somehow eliminate the cost advantage U.S. refiners have enjoyed due to low U.S. natural gas prices and reduce competitiveness.

  • FACT 4: The sharp drop in U.S. natural gas prices over the last 6 years has benefited U.S. refiners by lowering operating expenses.  First, eliminating the crude export ban will not reduce the cost advantage of our refiners have due to our low natural gas prices; EIA projects  low prices for the next decade and beyond.  Second, if, as a number of government, academic and economic consulting studies conclude, exporting U.S. crude will tend to reduce international crude prices, crude imports will fall in price. As a result, U.S. refiners who import crude will have lower costs than otherwise.

Claim 5: Lifting the crude export ban would harm our national security.

  • FACT 5: From a national security and geopolitical standpoint, sharing our crude oil with other nations will actually increase our geopolitical relations with our allies. By allowing U.S. energy exports, we can step up as a global energy leader to better support and protect our allies while at the same time strengthening our own economic and national security.

In Case You Missed It (July 17th – July 24th)

This week, while Senators Lisa Murkowski (R-AK) and Maria Cantwell (D-WA) released a bipartisan comprehensive energy package that did not include repeal of the crude export ban, it was announced on Thursday that the Senate Energy and Natural Resources Committee will vote before the August recess on a separate bill that will contain such language.

Senator John Cornyn (R-TX), a supporter of repealing the outdated ban on crude oil exports, spoke at an event hosted by the Center for Strategic and International Studies that same day. The Senator discussed the foreign policy and domestic economic value in U.S. energy exports stating, “The bottom line is, promoting U.S. energy through exports, would stimulate economic growth while enhancing national security. It doesn’t get much better than that.”

Senator Cornyn’s remarks are supported by a recent American Council for Capital Formation report which concluded that antiquated energy export laws are undermining our foreign policy interests by threatening the international free trade regime, obstructing development goals in the poorest country and failing to alleviate energy security vulnerabilities of key allies, particularly in East Asia.

This week’s notable op-eds/articles:

  • Washington Examiner, 7/22/5, “Small businesses need modern energy export policies,” by Karen Kerrigan
  • Inside Sources, 7/24/15, “New Report: Expanded Export of U.S. Energy Resources Would Strengthen U.S. National Security”
  • Midland Reporter-Telegram, 7/21/15, “Editorial: Lift the ban on oil exports, and do it now,” by Editorial Board
  • Real Clear Energy, 7/19/15, “Before Lifting Iran Oil Sanctions, Lift Export Ban,” by Senator Lisa Murkowski
  • The Journal Record, 7/17/15, “Roller: The case for oil exports,” by James Roller
  • Fox News, 7/19/15, “As US energy output surges, Republicans lead effort to lift decades-old oil export ban,” by Joseph Weber
  • Construction Equipment Guide,7/16/15, “Business to Congress: Crude Oil Export Ban Hurts Economy”
  • Energy Global, 7/16/15, “ACCF highlights impact of energy trade policies on national security”

From Our Blog This Week:

Stay Tuned…

  • 7/28/15 – Senate Banking, Housing and Urban Affairs Committee Hearing: A full committee hearing on “Lifting the Crude Oil Export Ban.”
  • 7/28/15 National Journal Conversation with House Energy and Commerce Committee Chairman Fred Upton (R-MI)

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.


Senator Cornyn: Time for America to Provide A Roadmap for Energy Independence

The Center For Strategic & International Studies (CSIS), hosted an event Thursday titled, “Energy for Our Allies: Harnessing the Power of American Energy to Strengthen Our Allies and Deter Our Enemies.” The event was led by keynote speaker Senator John Cornyn (R-TX),  who emphasized the importance of permitting energy exports as a means of bolstering the U.S. economy and enhancing our geopolitical relations with allies in need.

“The current policy on crude oil exports is an artifact and an antiquated policy that limits the U.S. from getting their product to our global allies,” Cornyn said of the current regulatory restrictions on U.S. energy. Cornyn then offered up three critical reasons why the need for American energy exports is so high in today’s day and age. “For one, our allies and trade partners around world desperately need our energy. For two, the presence of U.S. energy in the global market undermines the leverage of our advisories. The third reason is simply the fact that it is great for our overall economy,” stated Cornyn.

The Texas senator went on to elaborate on how the lack of diversity in Europe and Asia, with regards to supply of energy, poses as a strategic problem for the United States and its allies. Cornyn mentioned that our allies Japan and South Korea, both currently suffer from being limited to a single source of energy. In fact, ACCF’s most recent report also highlighted this notion, noting that both Japan and South Korea are each over 90 percent dependent on energy imports from a sole restrictive supplier. These allies are a perfect example of demonstrating how hungry the world market is for U.S. energy. “Our allies have been regularly calling on the U.S. to do its’ part and lift this band on oil exports, providing a better road map for energy independence,” Cornyn said.

It is clear that the call for American energy exports extends far beyond the confines of the United States. Our international allies and trade partners stand to benefit just as much as we do from opening up our energy sector the world market. In closing, Senator Cornyn reminded the audience that it is the responsibility of every day Americans to spread awareness of this issue while urging their elected officials to continue working towards a solution that will at long last open the passage to the global market for U.S. energy exports.