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What’s the Difference Between Canada and other U.S. Allies?

A new report released this week by Genscape Inc. details how crude oil exports to Canada have been essential in helping domestic producers manage large volumes of oil supplies and have prevented further production cuts due to lack of storage capacity. Production cuts would cause further job losses and economic harm, making it crucial that storage facilitates along the Gulf do not reach full capacity. The report notes:

“Since the beginning of 2015, nearly 19mn bbls have been shipped from the U.S. Gulf Coast to the Canadian East Coast, 10.5mn bbls from Corpus Christi terminals and 8.4mn bbls from Houston terminals. Without this transportation route, storage capacity could have reached critical levels, especially in Corpus Christi… Had waterborne shipments to Canada not been possible, either alternative transportation routes (waterborne movements to U.S. locations, rail, pipeline, etc.) or production cuts would have been necessary.”

The report illustrates one of the clear benefits of exporting crude oil to Canada. Therefore, the question must be asked why Canada is currently the only country to which a limited volume of exports is allowed – especially at a time when domestic production is at near record levels and our global allies continue to push the U.S. to update its export policies?

For example, the Wall Street Journal reported earlier this week that the European Union (EU) is urging the United States to include an energy chapter in the trans-Atlantic trade deal that would allow for U.S. crude oil exports and help ease the EU’s dependence on Russian energy. Ending the export ban would enhance U.S. national security by providing greater stability to the global crude oil market, reducing price volatility and providing our allies with a reliable and secure supply of energy. Maros Sefcovic, the EU’s energy chief, stated:

“We believe that the energy chapter in [the trans-Atlantic trade and investment partnership]…could make a quite important contribution to the mutually beneficial trade exchange, but also to the energy security of the EU.”

Former CIA Director and Defense Secretary Leon Panetta and former National Security Advisor Stephen Hadley echoed this message in a Wall Street Journal column that explains how the oil export ban harms national security:

“The U.S. has broken free of its dependence on energy from unstable sources. Only 27% of the petroleum consumed here last year was imported, the lowest level in 30 years. Nearly half of those imports came from Canada and Mexico. But our friends and allies, particularly in Europe, do not enjoy the same degree of independence. The moment has come for the U.S. to deploy its oil and gas in support of its security interests around the world.”

If the U.S. can export crude oil to Canada by tanker – and refined petroleum products such as gasoline to more than 100 countries around the world – why not provide our trading partners and allies across the Atlantic and Pacific with the same trade status?

It’s time for Congress and the Obama Administration to end the antiquated ban on crude oil exports and embrace a policy that will support jobs and economic growth here at home while also helping our allies and trading partners around the world.

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