Lift the Oil-Export Ban
September 10, 2015
The U.S. Energy Information Administration issued its long-awaited report on Tuesday and the results are adding fuel to the fire on a hot topic of debate. In the report, researchers can find little evidence to suggest that lifting the ban on oil exports would raise the price of gas at the pump.
More than a dozen oil companies have been aggressively lobbying Congress to end the four decade ban arguing that, by expanding the market for U.S. oil, the move would "eliminate market distortions, streamline U.S. petroleum production and stimulate the domestic economy."
- U.S. oil production is pumping at a rate of 9.3 million barrels a day -- up 70% from five years ago.
- In recent weeks, key Democratic senators have expressed willingness to support easing oil export restrictions as part of broader legislation.
- Opponents argue that lifting the ban would be a threat to our national security by making us more dependent on OPEC and would harm key industries such as oil refineries.
- "Petroleum prices in the United States, including gasoline prices, would be either unchanged or slightly reduced by the removal of current restrictions on crude-oil exports," the report said.
The Obama Administration has already started taking small steps towards easing the glut of domestic oil. Last year, the Commerce Department began allowing companies to export ultralight oil after minimal processing, and last month it said it would begin allowing companies to exchange U.S. crude with Mexico
Prices at the pump are not expected to be affected by lifting the oil export ban: U.S. retail gasoline prices are based on a global, not domestic, benchmark. Allowing U.S. oil to flow into the international energy market is unlikely to increase U.S. dependence on OPEC. Only 27% of U.S. oil consumption is from foreign sources, the lowest level since 1985.
Source: Amy Harder et al., "Government Report Finds Economic Benefits of Oil Exports", Wall Street Journal, September 1, 2015.
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