The Senate Committee on Banking, Housing & Urban Affairs is scheduled to mark-up the “American Crude Oil Export Equality Act” (S. 1372) later this morning which would lift the ban on crude oil exports from the United States. To provide context prior to the mark-up here are five things to remember about crude oil exports from the United States:
Iranian Deputy Oil Minister, Mansour Moazami, has indicated Iran will double crude oil exports to 2.3 million barrels per day soon after sanctions are lifted. Dr. Moazami stated the Iran’s oil export industry is “like a pilot on the runway ready to take off” and the Energy Information Administration has confirmed that when additional Iranian crude hits the global market, U.S. production will be negatively impacted reducing output by some 400,000 barrels per day in 2016 which will threaten U.S. jobs and other economic benefits. News reports from Tehran this week indicate that Iran has struck a deal to sell crude oil to Poland, a key U.S. ally in Eastern Europe and a member of NATO, when sanctions are removed.
The U.S. can benefit from the phenomenal growth in our petroleum resources by lifting the ban on crude oil exports. As recent study by the Brookings Institution concluded: “Lifting the ban will have a positive outcome for the overall U.S. economy generating lasting long-term benefits through decreases to unemployment and benefits to welfare.” A study by Harvard Business School found that, “Today, the ban on crude exports to almost all countries is reducing market opportunities for producers and reducing U.S. growth, with no clear offsetting benefits for America or Americans. By 2030, oil and gas exports could create an additional $23 billion in GDP and around 125,000 new U.S. jobs.”
Simply allowing crude oil exports will generate significant new revenue for federal, state and local governments. ICF International found that, “U.S. federal, state, and local tax receipts attributable to GDP increases from expanding crude oil exports could reach $13.5 billion in 2020,” and IHS found that cumulative government revenues from lifting the ban could be $1.3 trillion from 2016 – 2040.
In a recent Wall Street Journal oped former CIA Director and Secretary of Defense Leon Panetta, and former National Security Advisor Stephen Hadley wrote: “The moment has come for the U.S. to deploy its oil and gas in support of its security interests around the world…The U.S. remains the great arsenal of democracy. It should also be the great arsenal of energy”