Industry touts Energy study in push to lift ban on oil exports

The Energy Information Administration, the independent analysis wing of the Energy Department, issued a study Tuesday that concludes lifting the ban would increase oil production without harming consumers through higher gasoline prices.

Groups representing the oil industry, pipeline companies and firms big and small issued statements lauding the findings, which they hope will result in congressional action this fall. They argue that lifting the ban would open the world market now that the U.S. is the largest global producer of oil and natural gas. Opening the market would expand domestic production and keep the rigs humming at home, they say.

Proponents of lifting the ban say it would give oil and gas producers an option to compete in an increasingly complex energy market, even though the market is suffering from a supply glut that has driven prices to record lows.

“It’s time for policymakers to harness the economic advantages of free trade by lifting the outdated ban on crude exports,” said Kyle Isakower, the American Petroleum Institute’s vice president for regulatory and economic affairs. “Strong, bipartisan legislation is now making its way through both chambers of Congress. Lawmakers need to make this issue an immediate priority when they return from the summer break.”

The Senate Energy and Natural Resources Committee passed legislation ahead of the month-long August congressional recess that would lift the ban of oil exports. Committee Chairwoman Lisa Murkowski, R-Alaska, will seek to move the bill to the Senate floor for a vote by the full chamber after the recess, aides say.

Lawmakers opposed to lifting the ban say more study must be performed. They are worried that ending it could drive up the cost of fuel, according to staffers.

But groups such as the American Petroleum Institute say Tuesday’s study reinforces the studies performed for the energy industry over the last year that show no harmful increases in energy prices. Studies performed for the industry show exporting crude oil would actually lower fuel prices.

The Energy Information Administration study concluded similarly that lifting the restrictions on exports that were put into place after the Arab oil embargo of the 1970s would lower gasoline prices, although it says the decrease in price would be small.

“The EIA report only reinforces the economic benefits of exports outlined in every other major study — more U.S. jobs, greater U.S. energy production and downward pressure on fuel costs,” Isakower said.

The agency says its analysis shows “no difference between projections with and without current export restrictions in two analysis cases” where the projected production level is about 10.6 million barrels per day, or 1.4 million more than is currently produced, according to the agency.

However, when production rises, there are increased crude oil exports, reduced oil-product exports and “slightly lower gasoline prices to U.S. consumers compared to parallel cases that maintain current export restrictions,” the agency says.

The analysis that showed higher exports with low gasoline prices was based on 2025 production levels, using production volumes of 11.7 and 13.6 million barrels per day. Current production is well under 10 million, which is the basis of the first case study that showed no effect if restrictions on exports were removed.

The U.S. consumes on average 19.2 million barrels of oil a day, much of which is imported. An average of 9.2 million barrels per day is produced domestically. Secretary of Energy Ernest Moniz frequently points that out when asked about whether policies put in place in the 1970s are necessary now that the U.S. is an energy superpower.

He says the department is looking at whether other policies would function better in today’s energy-rich environment, but getting rid of policies altogether may not be the right course.

A group of refiners does not agree with legislative or administrative efforts to lift the export restrictions. The CRUDE Coalition says oil production has helped refineries produce gasoline at lower cost, resulting in lower prices at the pump. The refiners offer other studies that show fuel prices would increase if the export restrictions are removed.

Refiners can use the low cost of domestic oil from shale to make gasoline and other products at lower cost that they can export to Europe and other markets. Oil drillers want to have that same advantage for their product, which is crude oil.

The coalition said on Twitter that the EIA study is “riddled with caveats, conditions, [and] uncertainties,” and should not be “the basis for lifting crude export restrictions.”