ICYMI: Multiple studies have shown that lifting the ban on exporting U.S. crude oil would lower the Brent or international benchmark price of oil, which is the price used to set U.S. gasoline prices. It would also provide American companies with a powerful incentive to increase production, further reducing U.S. dependence on oil from the Middle East. 

We have seen analysis from the Government Accountability Office, EIA, Brookings Institution, Heritage Foundation, Council on Foreign Relations, Center for Strategic & International Studies, Cato Institute, Aspen Institute, Center for New American Security, Resources for the Future, Peterson Institute for International Economics, ICF International, IHS, NERA, and more. 

The respected research firm IHS found that ending the ban would have wide-ranging benefits to the economy:

The US oil system is nearing “Gridlock” with the mismatch between the rapid growth of light tight oil and the inability of the US refining system to economically process these growing volumes. Lifting the export ban and allowing free trade will, in our base case, increase US production—from 8.2 million B/D currently to 11.2 million B/D—and add investment of nearly $750 billion. The resulting increase in domestic oil production would be so great that it would cut the US oil import bill by an average of $67 billion per year….

The increased economic activity resulting from the rise in crude production would support an average of 394,000 additional US jobs over the 2016-2030 period, with highs of 811,000 additional jobs supported in 2017 and a peak of 964,000 jobs in 2018. The average disposable income per household would increase by an additional $391 in 2018 as benefits from increased investment, additional jobs and lower gasoline prices are passed along to consumers. - IHS Crude Oil Export Special Report.

And then there’s the report by the Brookings Institution, which found that lifting the ban on crude oil exports from the United States will boost U.S. economic growth, wages, employment, trade and overall welfare. 

Finally, a number of reports have focused on the foreign policy and national security benefits of allowing U.S. oil production to compete openly on the world market. 

Lifting oil export restrictions will yield a variety of security dividends to the United States. These include stoking U.S. oil production growth, which will strengthen the U.S. economy and better support the ability of our nation to play a strong leadership role on international security and economic affairs. Stimulating U.S. oil production growth also expands energy security by increasing global oil supply from a stable producer, via maritime transit routes free from the threat of conflict. … Another significant security benefit associated with lifting oil export restrictions is the greater flexibility this will provide to impose energy sanctions in the future. - Michele Flournoy, Center for New American Security.

In Pitch to End Crude Export Ban, Drillers Promise Cheaper Fuel (Bloomberg)

http://bloom.bg/1P9t8vi 
 
The oil industry has a new sales pitch for you: Support efforts to lift the 40-year-old ban on U.S. crude oil exports, and reap the reward of cheaper gasoline.

If you’re dubious, you’re not the only one. And that’s the challenge for critics of the export ban, who know they won’t get anywhere unless they can persuade consumers to come on board.

The politics are clear. Because voters think the ban saves them money at the pump, most lawmakers won’t touch it. The industry’s top leaders and Alaska Senator Lisa Murkowski, the Republican chair of the Senate Energy and Natural Resources committee, hope to offset that idea using reports from the Brookings Institution and the U.S. government that say the opposite is true.

“As long as lawmakers are fearful that there will be political retribution because of the price at the pump, it’s going to be hard to get the votes we need to lift the ban,” Murkowski told the industry’s largest annual conference in Houston last week.

Murkowski, who plans to bring a bill forward this year to overturn the ban, was part of a full-court press at the conference that included some of the wildcatters who sparked the shale revolution, including Harold Hamm of Continental Resources Inc. and John Hess of Hess Corp. With storage tanks brimming, the ban is emerging as a major policy battleground.

Critics say the 1975 ban is a relic of an era in which an OPEC embargo could bring a foreign oil-dependent American economy to its knees. They argue it’s out of sync with a free-trading nation that has overtaken Saudi Arabia and Russia as the world’s largest oil and natural gas producer.

Iran Sanctions

“At a time when the U.S. government is considering lifting sanctions on Iranian crude oil exports, it’s high time that we lift the self-imposed sanctions on U.S. crude exports,” Hess told attendees at the IHS CERAWeek conference in Houston. “Our crude oil is trapped here with no relief in sight.”

A poll released in December by Reuters/Ipsos showed 77 percent of voters thought oil produced domestically should be used at home to make U.S. gasoline prices cheaper. The Brookings Institution, in an analysis released in September, and the U.S. Energy Information Administration, in an October report, both concluded that ending the ban would lead to lower pump prices.

And perhaps not surprisingly, the reason, like just about everything else related to energy in the U.S. these days, goes back to the astounding growth of shale oil production.

International Price

The amount paid by U.S. consumers for gasoline is closely linked to the international price of oil. If the ban was lifted, and crude stockpiles in the U.S. were suddenly pushed into markets abroad, the international price of oil would fall and gasoline would likely follow suit, the two reports concluded.

While the argument has been verified repeatedly by people in the know, explaining it in a 30-second sound bite has been tough, according to Continental’s Hamm.

When the industry began pushing the idea on Capitol Hill, “people thought it was almost unbelievable,” Hamm told the audience in Houston last week. “It’s going to take a little while to change the mindset of Americans.”

Refiners’ Views

At the same time, the idea is being undermined by U.S. refiners, who want domestic crude to remain at home. Jay Hauck, executive director of the CRUDE Coalition, which is comprised of four independent U.S. refineries, has pushed to keep the ban.

“It doesn’t make economic sense for the producers at the wellhead to get an extra $1 or $2 a barrel and somehow, at the receiving end. users are going to pay less,” Hauck said in a telephone interview.

From the outset, there have been exceptions to the ban. Producers can ship crude to Canada, as long as it’s used within the country and Alaskan oil can be sent out via the Trans-Alaskan pipeline.

Last year, drillers were granted permission to ship abroad lightly processed crude, known as condensate. That’s raised hopes within the industry that the government is at least open to thinking about whether the ban could be lifted. Such exceptions may soon become broad enough to sail a supertanker through.