EnergyFactor By ExxonMobil | Pespectives has a new home

Case for crude exports strengthens

The argument in favor of removing the four-decade-old ban on exporting crude oil is gathering steam. Earlier this week a prominent congressional leader suggested that “oil exports can be a win for the American people and a win for our allies.”

PACE_Oil_Exports_06-2015That’s the assessment of Michigan’s Fred Upton, chairman of the House Energy & Commerce Committee.  Addressing a hearing of the committee’s Energy and Power subcommittee, he said, “The case for creating more jobs by expanding the market for American oil is a key reason why oil exports should be on this committee’s agenda this year.”

Among those testifying was Jason Grumet, president of the Bipartisan Policy Center. I encourage you to read his testimony. Jason laid out a compelling case for exports, speaking in terms that politicians can take back home to rally public support and deeper understanding of energy issues.

One section in particular bears repeating:

A key question for policymakers and voters is whether lifting restrictions on crude oil exports will meaningfully affect domestic gasoline prices. In short, the answer is no. Increased U.S. production in recent years has contributed to a far more resilient global market place that is reflected in lower global prices and greater resiliency against supply interruptions.

While one cannot eliminate the possibility of minor, localized price impacts while domestic markets recalibrate, the price of gasoline in the United States is driven by the global price of oil. Adding a reliable supply of crude oil to the global market will exert downward pressure on prices and protect U.S. consumers from global supply disruptions.

The current restrictions on exporting crude oil are an anachronism. Forged in a bygone era of vulnerability, this policy is now inhibiting our ability to capitalize on America’s energy strength. Export restrictions are a form of resource nationalism that undermines our nation’s fundamental commitment to efficient markets and our ability to promote free and fair trade.

Jason’s testimony adds to a chorus of vocal support for liberalizing the nation’s crude oil export policy. An advocacy group called Producers for American Crude Oil Exports has done a good job cataloguing that support – from editorial boards and others arguing in favor of doing away with the anachronistic ban.

The comments this week from the chairman of one of the most important committees on Capitol Hill can’t hurt as legislation to remove the ban works its way through Congress.

With mounting evidence and support, there are reasons for optimism that increased trade will bring new benefits at home and abroad. Let’s hope it is sooner rather than later.

 

 


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