Due to advanced hydraulic fracturing and horizontal drilling, U.S. oil production has increased about 80 percent since 2006, and we now lead the world in natural gas production. Net petroleum imports are at their lowest levels in decades, and the U.S. Energy Information Administration’s (EIA) latest energy outlook projects gasoline prices will remain below $3 per gallon through 2025.
It’s a new energy reality that requires a new energy policy approach.
Achieving the full possible scope of economic and energy security benefits requires doing away with any policy rooted in an energy scarcity outlook, starting with export policy. The ban on crude oil exports is a relic from the 1970s oil embargo that has no justification in 2015. Nonpartisan government agencies as well as research organizations left, right and center agree that ending the ban will generate significant economic and security benefits, improve the trade balance and put downward pressure on gasoline prices.
Few policy proposals are backed by such an overwhelming body of evidence from such a diverse variety of expert sources.
A Harvard Business School study is one of several reports that detail the needless economic damage incurred by maintaining the ban. Lifting restrictions could add $23 billion to the GDP and around 125,000 new U.S. jobs by 2030, the study says. Plus, the researchers found that “the overall effect of lifting the oil export ban could actually reduce global prices for gasoline by increasing the global availability of crude oil.”
A recent EIA report and a Brookings Institution study concur that removal of current restrictions on crude oil exports would result in gasoline price savings of 7 to 12 cents per gallon, as well as a report from ICF International and EnSys Energy projecting Americans will save an average $5.8 billion per year on gasoline, heating oil and diesel fuel costs if the ban is lifted.
Jobs, economic growth, consumer savings, energy security — the case for overturning the obsolete crude export ban is irrefutable. Congress faces a packed calendar for the remainder of the year, but reversing a policy that has been proven economically damaging to the United States should be a top priority.
Jack Gerard is president and CEO of the American Petroleum Institute.