Kerrigan: Pro-Growth Energy Policies Are What Small Business Needs

This week, Karen Kerrigan president & CEO of the Small Business & Entrepreneurship Council weighed into the crude oil export debate reiterating the well-known fact that pro-growth policies like exporting crude oil exports will be a boon for communities and small businesses across the country. In an op-ed published in The Washington Examiner, she wrote,

“The reality is that America’s oil and gas sector is overwhelmingly comprised of small and medium sized businesses. In fact, among the five key energy sectors SBE Council examined in our report, employer firms with fewer than 20 employees comprised 58 percent to 91 percent of total firms in the industry. Unfortunately, red tape, political pandering and a lack of education about energy exports is keeping opportunity out of reach. Current government policies and delays that limit exports of natural gas and crude oil restrict investment and production. That limits small business’s economic and employment growth.”

The chorus of voices supporting this policy change has become larger and louder. And this message of tremendous domestic benefits to Americans as a result of exports is only one of the many reasons it is time we give the 1970’s their policy back. A recent report by ACCF also cites another major reason we should be exporting our abundant resources – national security. By limiting our exports of crude oil we are missing an opportunity to create a stable and more secure energy market for both ourselves and some of our most important trading partners.

As Kerrigan concluded, “We compete in a global economy, and our vast energy resources allow us to leverage our innovative know-how to meet global demand. Doing so will strengthen our economy and bolster our standing as the world’s energy leader.”

WIPP: It’s Time to Lift America’s Ban On Crude Oil Exports

by Barbara Kasoff, WIPP President

Since the start of the year, a surprising amount of support on both sides of the aisle to remove the ban on crude oil exports has emerged. Is this a sign that we are entering into a new era of bipartisan collaboration, specifically to form an energy agenda that will improve the nation’s security and get our economy moving again? While that still may be a ways off, it is clear this is one issue that could lead to historic collaboration on energy policies that will benefit American economy.

The 4.7 million businesswomen across the country that our coalition represents believe we can help secure the nation’s economic future through sound energy policies. We believe exporting our abundant energy resources must be a key part of that future and supporting an update in our crude oil export policy is the correct course of action and would allow our country to prosper at its full potential.

According to a report released this week by Margo Thorning, senior vice president and chief economist for the American Council for Capital Formation (ACCF), and William Shughart a research director for the Independent Institute and J. Fish Smith Professor in Public Choice at the University of Utah, the economic advantages and geopolitical benefits to lifting the ban on crude are clear.

The paper titled, “The Economic Case for Lifting the Crude Oil Export Ban,” cites the findings from five different studies conducted by various institutions such as IHS, Brookings Institute, the Aspen Institute, ICF International, and Resources for the Future, all of which agree that the case to update this policy is strong. Notably, they all conclude the same three major impacts lifting the ban on crude oil exports would have on the economy and consumers, including: job creation, an increase in U.S. GDP, and a downward pressure on consumer fuel prices.

For example, one of the most recently released studies mentioned in the report – by IHS – estimated that lifting the ban on crude oil exports would generate 390,000-859,000 new jobs annually nationwide and increase U.S. GDP between $86 billion and $170 billion over the next fifteen years.

Senator Lisa Murkowski, Chairwoman of the Senate Committee on Energy and Natural Resources, who has been one of the biggest champions of an examination of various U.S. energy policies, including the ban on crude oil exports, also noted the economic “no brainer” we are facing, stating, ““the economics are clear… lifting the ban on crude oil exports will benefit consumers.”

In addition to the much need economic stimulus from removing the ban, revising the current energy exports policy specifically with regard to crude oil, also extends U.S. geopolitical influence by strengthening our international trade relationships. Foreign allies would gain access to a stable and abundant source of crude oil that would overall create a more secure market.

Women thought leaders like Dr. Margo Thorning and Chairwoman Lisa Murkowski understand that repealing the ban on crude represents a fiscally responsible strategy to allow the U.S. to utilize our growing energy abundance.  Simply put, to quote Murkowski herself, “It’s time to lift America’s ban on crude oil exports.”

Women Impacting Public Policy (WIPP) is a nonprofit organization recognized as a national, nonpartisan voice for women entrepreneurs.  WIPP advocates on behalf of its coalition of 4.7 million businesswomen, which includes over 78 business organizations.

Senators to Intelligence Director: Bolster Geopolitical Relations Through Crude Oil Exports

This week, as U.S. negations with Iran wrapped up, Senate Energy Committee Chairwoman Lisa Murkowski (R-AK), sent a letter to James Clapper, director of National Intelligence, urging him to consider and assess the positive geopolitical implications of lifting the ban on crude oil exports. The letter, in which Murkowski was joined by fellow Republican Senators Richard Burr (NC), John Thune (SD), and Mark Kirk (IL), also discussed how allowing crude oil exports would unquestionably benefit the overall American economy.

“We agree that energy independence within North America and, perhaps, the Western Hemisphere is not only an attainable goal, but also increasingly the economic reality,” the four Senators wrote. As we have seen from an assortment of studies conducted by different public policy institutes, lifting the ban on crude is projected to significantly increase production, domestic job growth, and overall national GDP. In fact, a recent study by Brookings discovered that repealing the antiquated exports ban would increase overall U.S. GDP by anywhere from $600 billion to exceeding $1.8 trillion through 2039.”

From a national security and geopolitical standpoint, sharing our abundant supply of crude oil with other nations in need will undoubtedly increase our geopolitical relations with our foreign allies. A recently released report from the American Council for Capital Formation (ACCF) on behalf of our Executive Vice President George David Banks, examines this issue. He specifically discusses how easing our East Asian allies’ dependency on a single restrictive source of energy will bolster and enhance our ties with them by practicing free trade principles.

“Rather than restricting energy trade, we must take a leadership role in protecting free trade of all our strategic resources to further global economic growth and stability,” Banks stated. The report went on to present how allied nations Japan, South Korea, and Taiwan are currently over 90% dependent on energy imports. By allowing U.S. energy exports to these regions, we can step up as a global energy leader and support and protect our allies while at the same time strengthening our own economic and national security.

The U.S. is in a position to set itself up as a global leader in the energy sector, while mutually benefitting our international trade partners. Opportunities like the energy renaissance we are experiencing at the moment do not come around very often, or at all in most cases. As a nation, we must actively take advantage of the situation before us and lift the ban on crude oil exports.


New Paper: Foreign Policy Implications of Restrictive Energy Export Policies

The United States is missing an opportunity to become a global powerhouse as antiquated federal laws that limit energy exports are undermining our long-term foreign policy interests while violating our international trade commitments, according to a new paper released today by the American Council for Capital Formation (ACCF).

“With the Obama Administration’s announcement of a nuclear agreement with Iran that will lift oil sanctions, it’s now even more critical than ever that we remove our energy trade restrictions as soon as possible.  If the United States continues to be the only leading nation with limits on domestically produced exports, our global leadership and credibility will be in jeopardy,” said George David Banks, Executive Vice President of ACCF. “Geopolitical impacts from the shale revolution have the potential to transform the global market with the promise of greater energy and political security for the world.  The United States has a tremendous opportunity to pull the levers of energy diplomacy to ensure our allies and emerging economies have access to the energy they need while supporting peace around the globe, but unfortunately, our current energy trade restrictions are standing in the way.”

Policies specifically discussed in the paper are those curbing liquefied natural gas (LNG) exports; the ban on exportation of domestically produced crude oil; localized review process for exporting coal; and trade in civil nuclear technology. Ultimately, efforts by those impeding repeal or reform of these restrictive laws embrace “resource nationalism” which is the use of government intervention to control the trade of a resource in order to pursue a benefit perceived as unavailable under free trade.  In practice, only a small number of special interests receive the benefit – e.g., protection from foreign competition – while the vast majority of American consumers are harmed economically.

The paper discusses the negative impact of our energy trade controls on allies in East Asia, specifically Japan, South Korea, and Taiwan.  U.S. resource nationalism harms the economic and energy security of these important allies by denying or limiting direct access to our resources and by reducing global supplies, resulting in higher energy prices.

“While the policy of resource nationalism is tempting to many, it’s a misguided one, providing only short-term benefits to certain special interests.  It is not the path forward for the United States.  Rather than restricting energy trade, we must take a leadership role in protecting free trade of all our strategic resources to further global economic growth and stability,” Banks continued.

Banks also notes the increase in resource nationalism arguments in the United States when it comes to maintaining restrictions on LNG exports and the crude oil export ban, and points out the conflicting nature of these policies when it comes to the pursuance of legal action in the World Trade Organization (WTO) against similar policies from countries such as China. This serves to complicate Washington’s ability to continue pursuing these WTO actions as well as defend any possible challenges brought against the United States by other parties.

“It is time for Washington to act quickly and remove these outdated barriers that have no place in the new American energy landscape of the 21st century,” Banks concluded.

A link to the paper can be found here.

In Case You Missed It (July 2nd – July 10th)

Following the Independence Day weekend, the debate on crude oil exports didn’t miss a beat. First this week, the House Committee on Agriculture held a hearing on Wednesday, in which they heard testimony from panel of energy industry executives, discussing the economic impact crude oil exports would have on rural businesses and communities. New perspective on this issue came from Kari Cutting, vice president of the North Dakota Petroleum Council, who testified on the benefits the energy boom has had in rural North Dakota communities and added that “this rural renaissance is being threatened by foreign entities not always friendly to the United States and restrictions imposed on the sale of oil abroad.” On Thursday, the House Committee on Energy & Commerce also held a hearing examining H.R. 702, a bill introduced by committee member Rep. Joe Barton (R-TX) that would eliminate the 40-year-old ban on crude oil exports. Amidst a panel of energy industry and policy experts, Peter Gandalovic, Czech Republic, Ambassador to the U.S., shared an international perspective on what crude oil exports would mean to our European allies. “U.S. energy exports would send a strong signal to the rest of the world, that democracies stick together,” said Gandalovic.

In the news, Dr. Margo Thorning, vice president and chief economist of ACCF, capped off the holiday weekend with an op-ed published in The Hill. Dr. Thorning rebutted the claims from a letter published on behalf of 13 Democratic Senators urging President Barack Obama to leave the current export ban in place. She also emphasized the importance of setting aside partisan politics, in order to take advantage of our domestic energy renaissance, by using figures and conclusions drawn from public policy institutions such as IHS. “In order to keep this renaissance alive, we must throw our hat in the ring that is the global energy market, capitalizing on the extraordinary opportunity before us,” Thorning wrote.

This week’s notable op-eds/articles:

  • E&E, 07/10/2015, “House’s next move on crude exports up in the air,” by Geof Koss
  • The Hill, 07/08/2015, “Unions back oil export bill, break with AFL-CIO,” by Timothy Cama
  • Fuel Fix, 07/08/2015, “Farmers would benefit from crude oil exports, too, oil industry leaders tell House agriculture panel,” by Jennifer A. Dlouhy
  • CNBC, 07/08/2015, “It’s time to lift the US ban on crude-oil exports” by Terry Duffy
  • Roll Call, 07/06/2015, “The Growing Case for Ending the Crude Oil Export Ban | Commentary,” by Reps. Joe L. Barton and Henry Cuellar
  • The Hill, 07/05/2015, “Don’t let politics jeopardize our energy renaissance,” by Margo Thorning

From Our Blog This Week:

Stay Tuned…

  • 07/14/2015 – Carnegie Endowment for International Peace Discussion – “Oil Price Trends and Global Implications”
  • 07/14/2015 – CSIS event: Energy Security and the Quadrennial Energy Review

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.

2016 Presidential Spotlight On Crude Oil Exports

With 21 candidates already announcing their intention to run for President, it’s clear the 2016 presidential primaries are already in full swing. One of the issues that will be heavily debated this election cycle is 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, multiple candidates 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.

Why Are Both Crude Exports and Imports Okay? It’s Economics 101

Why should we export our domestically produced crude oil when we are still importing this product from other nations? While this is a fair question, it is often a misunderstood one. Though the idea of importing and exporting crude oil brings to mind the idea of two large tanker ships carrying the same product passing each other, this is not the case. Crude oil is not a single, indistinguishable substance but instead it is a product with unique differentiations. So the argument that we should restrict crude oil exports due to the fact the U.S. still imports crude oil from other nations, is as a recent Roll Call piece put it, “overly simplistic and ignores the complex realities that exist in regards to different grades of crude oil and refinery capacity.”

The bipartisan opinion piece authored by Reps. Joe L. Barton (R-TX) and Henry Cuellar (D-TX) this week explain this situation in with an apt quote from  a recently released study from Harvard Business School on this issue. The study’s authors write, “Today, the U.S. has a domestic mismatch in the types of crude produced from U.S. basins and the crude types required by U.S. refiners. Unconventionals skew U.S. supply toward light grades, but U.S. refineries have been built to operate with a mix of light and heavy crude oils.” And with U.S. crude oil production at its highest since May 1971, rising to 9.701 million barrels a day in April, according to U.S. Energy Information Administration monthly data, opportunities to both import heavy foreign crude and export light crude oil exist.

Additionally this month, a Reuters report highlighted a Delta Air Lines refinery purchase of an estimated 5 million barrels of Nigerian crude for its Pennsylvania refinery. This purchase is a prime example of refineries having the choice to import similar grade oil at a competitive price on the world market,  the same opportunity exporting oil producers do not have for their products. And with production levels rising and international crude oil prices low, it is not economically feasible for the U.S. to refine and consume all of the oil we are produce in the U.S.

As the Congressmen state, “Anything short of repeal would be a missed opportunity.” We agree and it is imperative that the public and our leaders in Washington understand the fundamentals of this debate if we wish to get our policies right. Imports and exports of a commodity are part of the natural economic cycle, we must not exclude energy from these standards.

Debate and Delay: The Harmful Approach to U.S. Energy Growth and Success

This week, a Business Recorder article featured comments made by Chet Thompson, the new head of the U.S. oil refining industry’s association, American Fuel & Petrochemical Manufacturers (AFPM). In the article, Thompson stated that AFPM is not opposed to lifting the export ban, but would like more discussion on the matter.  While his comments are encouraging, the debate has actually been going on for quite some time now.

Mr. Thompson followed up on his initial comments by suggesting that the potential effects of lifting the ban on crude are not widely unknown. “I don’t think we know exactly yet what would happen if you lift the ban,” he stated. However, credible data on the benefits of crude oil exports is already out there. A wide variety of policy institutions have released various studies, highlighting how repealing the ban on crude oil exports will ultimately lead to a significant boost in domestic oil production and as a result, job growth and  increased Gross Domestic Product (GDP).

A recent study by ICF International found that as a result of enabling crude oil exports, production would increase by 500,000 barrels per day by the year 2020. An additional study by IHS found that crude oil exports would, create on average 394,000-859,000 new jobs within the 2016-2030 period. Finally, a third study, conducted by Brookings, found that repealing the outdated ban on crude would increase overall U.S. GDP by anywhere from $600 billion to exceeding $1.8 trillion through 2039.

The benefits of crude oil exports could not be any clearer. It’s time to get the facts straight and stop delaying growth and progress. We cannot allow this golden opportunity to benefit from our vast source of energy abundance to go to waste. There’s nothing left to debate. End the ban on crude oil exports for an era of true energy independence.

Updating U.S. Crude Oil Exports Policy Is Right For America

This week, the Unlock Crude campaign joined API’s President & CEO Jack Gerard and a panel of esteemed experts as they presented an exclusive briefing on findings from a new policy study outlining pro-development energy policies and their role in our future energy portfolio.

The report, conducted by industry experts Wood Mackenzie, examined several policies that we as a nation should embrace if we wish to continue on our path to becoming as a global energy leader, including lifting of the decades old ban on crude oil exports. According to the report, under their pro-development scenario, energy policies – which included removing the crude oil export ban by 2016 – could add 2.3 million U.S. jobs and add $443 billion per year to the U.S. economy by 2035.

In addition to the clear economy benefits that have been supported by countless macroeconomic outlooks over the past year, U.S. national security will also be reinforced by the right energy policies.  On Capitol Hill this week the Senate Foreign Relations sub-committee, held a hearing which also featured a majority consensus that crude oil exports was a sound energy policy. During the hearing, three of the four panelists cited national security benefits from allowing the U.S. to export crude oil as we do petroleum products. David Gordon, a senior advisor with the Eurasia Group, aptly described the need to remove the ban in his testimony stating:

“Washington has a unique window of opportunity to strengthen domestic economic growth, energy market stability, U.S. global leadership and open trade relations… Removing the outdated and detrimental limits on the export of U.S. natural gas and crude oil will advance these goals. It will deepen trading ties with strategic allies, including those in Europe and Northeast Asia. It will improve the economic position and energy market stability of our nation and partners abroad, and allow the U.S. to more effectively spur and lead multilateral action to counter international security threats.”

It is clear lifting the ban will advance both U.S. economic and geopolitical goals. As Jamie Webster, a senior director with IHS put it clearly, “continuation of this ban hurts American consumers, causes an unnecessary drag on American productivity, and does not let the United States exploit fully the national security benefits from our energy resurgence.”

More Production = More Jobs: Remove the Ban on Oil Exports

The U.S. Energy Information Administration (EIA) released a new report last week examining Producer Price Index (PPI) numbers from the Bureau of Labor Statistics finding that key supplemental activities supporting jobs in the oil and gas industry are declining with lower prices. According to the study, as oil and gas prices fell from June 2014 to May 2015, rates for drilling activities fell by 19.6% and rates for support activities also fell by 1.4%.

While the PPI does not necessarily represent a slowdown in business activity – but rather reductions in prices received for particular goods and services – it indicates that market dynamics are changing and we must adapt our policies to keep demand for drilling and production jobs high. The common-sense solution to remedy this situation would be to finally lift the four-decade long ban on crude oil exports.

Crude exports would enable the United States to tap into new markets which would effectively incentivize and drive overall production activities. New markets mean new demand which will subsequently spur the production needed to keep key services used by this industry thriving.  A study from the Aspen Institute specifically assessed the employment benefits in these non-traditional industries such as support services as a result of lifting the ban. After looking at several sectors and timeframes, they forecast that new construction will create 216,000 new jobs by 2017 while the manufacturing sector will gain an astounding average of 37,000 jobs annually, through 2025. Overall, related professional services jobs are predicted to increase on average by 148,000 jobs per year through 2025.

Additionally, in a study conducted by IHS, it was found that removing the exports ban would turn out between almost 124,000-240,000 new supply chain jobs annually across the country. According to the study, every new oil production job would create three jobs in the supply chain and another six jobs in the broader economy. Allowing crude oil exports would bring in these new and sustainable jobs as a direct result of an increase in production to meet the needs of an open and global market.

On the heels of this recent report, it’s clear that now more than ever is the time to lift the ban on crude oil exports. Opening up to the global energy market would lead to a significant boost in production, which ultimately translates to more jobs and an overall stronger economy.