What's Wrong with Allowing Crude Oil Exports
Recently I appeared on CNBC to discuss whether to lift the 39-year old ban on exporting US produced crude oil. Ending the ban is bad policy for 5 reasons.
I. Allowing the export of crude oil will raise gasoline prices for American consumers. As I’ve argued before, while the oil boom can’t lead to affordable energy for Americans, it has led to a very slight discount for US refiners, which in turn lowers gasoline prices just a tad.
II. It doesn’t make sense to start exporting crude oil when we’re still importing 7.6 million barrels of oil every day, and we’ll continue to be dependent on imports for a long time.
III. Exporting crude will provide incentives to produce more oil, further straining environmental concerns from fracking and deepwater drilling, and exacerbating the impacts of global climate change from its overseas consumption. While we are currently exporting record amounts of refined petroleum products like diesel and gasoline, allowing the export of the raw crude oil will significantly increase the rate at which we export domestically produced oil. That’s because right now crude oil producers must first ship their product to a refiner, where it can take a while to turn the crude into end products. Allowing for direct crude exports will allow producers to bypass the refineries altogether, and will expand the number of export ports from which to unload the crude.
IV. Crude oil exports won’t be effective as a diplomatic tool to counter influence of, say, Russian or Saudi energy exports because the United States simply lacks adequate spare capacity to meaningfully dilute those countries’ dominance over certain markets.
V. Focusing on whether to export crude oil or not misses the larger point: we can’t have this debate in a vacuum separate from the need to establish a national energy and climate policy that comprehensively establishes a clear path for consumers to enjoy access to affordable, reliable and sustainable energy for generations to come.
Tyson Slocum is Director of Public Citizen’s Energy Program. Follow him on Twitter @TysonSlocum