Unified Coalition Supports Lifting the Crude Oil Export Ban | Commentary

Posted November 7, 2014 at 7:09pm

Slowly but surely, political leaders from both sides of the aisle are joining energy industry executives to support repealing the Energy Policy and Conservation Act of 1975 , which currently bans the export of U.S. crude oil. This law made sense 40 years ago, after a six-month OPEC oil embargo resulted in gasoline scarcity and an economic disaster.

But we don’t live in that world anymore — domestic oil and gas production is booming, with no shortage in sight. I agree with Sen. Mary L. Landrieu, D-La., when she said that in the 1970s, we had to reserve the oil that we had, when no one else was shipping to us. Now that we have more open trade opportunities, and we are producing more here, it makes absolute perfect sense to reconsider this policy and update it according to the times.

Furthermore, in-line with the thinking that it’s simply outdated policy, Rep. Joe L. Barton, R-Texas, correctly points out that he’s in favor of lifting the ban because the shale revolution has changed the energy landscape in our country.

But repealing isn’t a no-brainer for everyone. Sen. Lisa Murkowski, R-Alaska, explains there are still an awful lot of people who remember the gasoline lines we had in 1973. You’ve got to convince with the facts — we can operate as a nation of abundance.

Indeed, a growing number of lawmakers have been convinced. In addition to Landrieu, Barton and Murkowski — who are some of the most outspoken advocates of lifting the crude oil export ban — fellow House representatives and senators from Illinois, Texas, Oklahoma, Arizona, Ohio, South Carolina and Alaska have added their support. And oil and gas industry leaders — such as Harold Hamm, CEO of Continental Resources Inc.; Ben van Beurden, CEO of Royal Dutch Shell; and Rex Tillerson, CEO of Exxon Mobil — are right there with them.


Economic Advantages at Home and Abroad

What is it about lifting the crude oil export ban that has all these leaders convinced it’s the right call? Many of them cite job growth and the U.S. economy as the top reason to start exporting our crude oil. For example, Kyle Isakower, vice president of the American Petroleum Institute, stated in March that lifting trade restrictions could result in as many as 300,000 new jobs by 2020 and an additional $13.5 billion in local, state and federal tax revenues.

Supporters of lifting the crude oil export ban are also hoping to ease gas prices. David Goldwyn, president of Goldwyn Global Strategies, LLC and a former Obama State Department employee on energy issues, makes a good point saying the broadest bipartisan worry is that crude-oil exports will drive up domestic gasoline prices. However, every rigorous economic analysis believes the opposite to be true.

In addition to boosting the American economy, lifting the crude oil export ban gives the U.S. better advantages abroad: We gain a better position in the global marketplace as well as a counter measure against aggressive oil exporting nations. Rep. Michael McCaul, R-Texas, told Reuters that lifting the ban would give America a new foreign policy tool to provide greater stability in the world oil market. Tillerson agrees, suggesting that lifting the ban will help by opening up markets, strengthening international ties and promoting free trade. Hamm adds that U.S. crude exports will help counter aggression by Russian President Vladimir Putin.


Global Partners in Favor of Lifting the Ban

Other nations are also anxious for the United States to contribute their crude oil to the global marketplace. One of these nations is South Korea, said James Kim, research fellow at the Asian Institute for Policy Studies in Seoul. Kim explained that depending on one source too much raises risks for countries, but by having various sources to import crude, including the United States, it will help reduce price fluctuations.

And Mexican state oil company Petroleos Mexicanos is interested in importing the lighter oil produced in the U.S. Pemex’s refineries could benefit from an improved mix of crude, and to improve that mix, we need to consider importing, stated a member of their board.

The list of parties in favor of repealing the outdated EPCA goes far beyond those referenced here. Canary stands by these political and industry leaders who are ready to repeal the outdated EPCA. It’s time for Congress to recognize the unified voice of these leaders and allow the nation to reap the benefits of free energy trade.

Dan Eberhart is CEO at Canary, LLC, one of the largest privately held oilfield services companies in the United States.