Oil exports would boost economy, lower gas prices: study

Eliminating or ending some of the restrictions in the near-ban of crude oil exports could yield an economic infusion of between $600 billion and $1.8 trillion, the joint Brookings Institution and NERA Economic Consulting study said. Removing the export ban also would reduce gasoline prices by 9 cents per gallon in 2015, largely by encouraging more oil and gas production, the study found.

“We think the key lesson of our economic history in the energy space is that the U.S. economy works better embracing market forces than trying to resist them,” the study said.

The export restrictions were established following the 1973 oil crisis and currently allow just a trickle of unprocessed crude to be shipped overseas. Lawmakers and Obama administration officials — including Energy Secretary Ernest Moniz — have called for a re-look, given a gusher of new domestic supplies.

The study underscores arguments from the growing number of export supporters in Congress and the oil industry. They say U.S. refineries aren’t currently equipped to handle the large amount of light, sweet crude that has resulted from the domestic shale boom, a dynamic that they say could lead to future gluts at refineries.

The Commerce Department looked poised to open an avenue for exports when it permitted two companies’ requests to send lightly processed condensate, a light form of crude, to other nations, but the department put a hold on additional requests in late July.

Some refining companies, however, have pushed back against efforts to end the restriction. Refineries have enjoyed sizable windfalls in recent years because current regulations permit exports of refined petroleum products — such as gasoline — that have grown as the U.S. produces more domestic oil.

A number of Democrats — and some Republicans — have voiced concerns that sending more crude abroad would roll back recent strides toward greater energy independence.

But the study said such worries were unfounded, noting that shipping more crude overseas would facilitate new production to replace whatever leaves the U.S. It also argued that exporting crude would solidify the nation’s role as an arbiter of stability in the global arena.

“[T]he greater U.S. exports of crude oil, the greater the economic and energy security benefit to the country,” the study said. “In addition to the parochial benefits to the nation, as a leader in world trade circles … continued restrictions on crude oil exports have the potential to tarnish the U.S. global standing and hinder its pursuit of strengthening energy security.”

The study warned, however, that removing export restrictions would affect climate change by freeing up more greenhouse gas-emitting fossil fuels that most scientists say drive global warming.

“Clearly if lifting the ban leads (as we believe it will) to higher U.S. oil production and this oil is then burned either domestically or processed in foreign refineries, there will be larger [greenhouse gas] emissions than if the oil had remained in the ground,” the study said.