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Who Supports Crude Oil Exports?

This week, as the Energy and Power subcommittee begins to mark-up H.R. 702 – bipartisan legislation that would modernize our nation’s energy policy to reflect current market realities – we thought it would be instructive to take a look at who supports U.S. crude oil exports and more importantly, the reason they each outline for their support.

To-date, nearly a dozen governors have voiced their support for ending the ban, including Colorado Governor John Hickenlooper (D), who recently wrote a letter to Commerce Secretary Pritzker to request her “support and that of the broader Administration for full legislative repeal of the crude oil export ban.”

Coming from an energy state, Governor Hickenlooper knows first-hand the role energy development has on his state’s economy and how opening new markets to domestically produced crude oil has the potential to be a game-changer for our economy and geopolitical position in the world. And while they say governors are the pulse of a state, this view is shared by former secretaries of defense, energy and commerce, national security advisors, labor unions, economists and think tanks across the political spectrum. Here’s what some of the experts are saying about exports:

Former Cabinet and Sub-Cabinet Officials Support Crude Oil Exports

  • Larry Summers, former economic policy adviser to Presidents Obama and Clinton: “I believe that the question of whether the United States should have a substantially more permissive policy with respect to the export of crude oil and with respect to the export of natural gas is easy. The answer is affirmative. The merits are as clear as the merits with respect to any significant public policy issue that I have ever encountered.” (Brookings speech, 9/9/14)
  • Leon Panetta, former Secretary of Defense, Director of the CIA and Member of Congress: “Too often foreign-policy debates in America focus on issues such as how much military power should be deployed to the Middle East, whether the U.S. should provide arms to the Ukrainians, or what tougher economic sanctions should be imposed on Iran. Ignored is a powerful, nonlethal tool: America’s abundance of oil and natural gas. The U.S. remains the great arsenal of democracy. It should also be the great arsenal of energy.” (Wall Street Journal, 5/19/15)
  • William Cohen, former Secretary of Defense: “A prudent way to support the continued expansion of the U.S. energy sector and our domestic energy security is to level the playing field by relaxing restrictions on American crude oil and LNG exports… For the first time in a half century, President Obama has the opportunity to re-write the energy balance of power in our favor and solidify his legacy on trade. President Obama is the only U.S. president in decades who has had the tool of energy abundance at his disposal; he should use it.” (Time, 5/27/15)
  • John Deutch, former Undersecretary of Energy, Deputy Secretary of Defense and Director or the CIA: “With U.S. oil production on a long-term uptick, the long-standing ban on direct exports of crude should be abolished… Let’s hope the export ban is lifted with broad bipartisan support. The result will increase U.S. jobs and increase the country’s influence in world oil markets, with little risk of higher gasoline prices for consumers.” (Wall Street Journal, 8/11/15)
  • Bill Richardson, former New Mexico Governor and Secretary of Energy: “New Mexico is like the entire oil patch, is starting to hurt. We’ve got shale, we’ve got oil and gas. Our budget, our education depends a lot on oil and gas royalties. And we’re hurting, because right now, as you mentioned in your dialog, there is an oversupply… This is why it does make sense to lift the oil export ban. It makes no sense. It’s a relic of the 70s and 80s. Because this will allow us geopolitically to deal with the Russians in Eastern Europe – they use natural gas as a political weapon. (CNBC, 8/7/15)
  • Tom Donilon, former National Security Advisor to President Obama: “The US has consistently opposed efforts by countries to manipulate their exports…By allowing exports, we permit production decisions in the United States to be made fully on the basis of market forces rather than being influenced by artificially imposed regulatory constraints…This in turn will increase diversity of supply, increase competition, reduce volatility and lower prices in global markets.” (Platts, 1/27/15)
  • Gen. Jim Jones, former National Security Advisor to President Obama: “The U.S. finds itself quite surprisingly in a position to show, if we wish, enlightened leadership with regard to energy and global climate…This is in sharp contrast to Russia’s policy of using energy as a blunt instrument of national power and a means of influencing international behavior wherever it can. The U.S. is less vulnerable now than at any time since the 1970s to oil supply disruptions and international price manipulation. But we have not yet taken the steps to treat energy as a top-rung energy and environmental security issue that it has now become.” (USA Today, 7/27/15)
  • Michèle Flournoy, former Under Secretary of Defense for Policy and CEO of the Center for a New American Security: “Lifting oil export restrictions will yield a variety of security dividends to the United States. First and foremost, allowing crude exports would further strengthen our economy – the foundation of our national security… Shoring up the United States’ economic position would, in turn, strengthen our ability to play a much needed leadership role in international security and economic affairs. And we should not underestimate the degree to which becoming an exporter could impact perceptions of the United States as a vital global power, helping to discredit erroneous narratives of U.S. decline.” (Congressional testimony, 7/28/15)

Former Senior Administration Officials Support Crude Oil Exports

  • Jason Bordoff, Former Special Assistant to President Obama and Senior Director for Energy and Climate Change, National Security Council and Founding Director of Columbia University’s Center on Global Energy Policy: “Allowing exports would make the US more resilient, not less, to supply disruptions elsewhere in the world. Greater integration into global markets would make US oil supply more responsive to international market developments, mitigating the impact on American consumers and the US economy of production losses in other countries. Lifting crude export restrictions is consistent with past and present US trade policy priorities, would enhance US credibility in current and future trade negotiations, and avoid creating a precedent that could harm US trade policy objectives down the road.” (Report: Navigating the U.S. Oil Export Debate, 1/2015)
  • Steve Rattner, former Counselor to the Secretary of the Treasury and lead Advisor to President Obama’s Auto Task Force: “Energy policy should not be driven by emotion. Paradoxically, the fastest way to reduce our dependence on foreign sources of energy is to speed the export of crude oil and natural gas.” (New York Times, 7/23/14)
  • Carlos Pascual, former State Department official: “The ban [is] hurting Washington’s credibility on the international stage, particularly on related issues such as free trade, sanctions on Iran and even climate change. “If the basic point is to say to countries that we have to (work) together to put global interests and concerns above short-term domestic action. The only way to maintain credibility is if you do it yourself.” (Reuters, 1/29/15)
  • David Goldwyn, former State Department official: “The U.S. should also be prepared to continue supporting the stability of the global oil market should a supply disruption occur. U.S. domestic production growth has helped keep the global market well supplied and prices stable even as unplanned supply disruptions, including in places likes Libya, South Sudan, and Yemen, have emerged. However, the U.S. could do more, including taking steps to authorize the export of light sweet crude grades that we have in excess, to help keep the global market stable. While promoting global market stability is among the goals of strategic reserves, the United States does not need to tap the Strategic Petroleum Reserve at this time. Instead, it only needs to signal very clearly that it is prepared to export grades of excess crude if disruptions worsen and the global market requires more supply.” (Congressional testimony, 7/22/14)
  • Trevor Hauser, former Sr. Advisor at the State Department: “The original rationale for crude export restrictions no longer applies. Today’s oil market looks very different than in the 1970s when current crude oil export restrictions were first put in place. At that time, the US had adopted domestic price controls to combat inflation and crude export restrictions were necessary to make those price controls effective. While price controls have long since fallen away, crude export restrictions remain.” (Report: Navigating the U.S. Oil Export Debate, 1/2015)
  • Elizabeth Rosenberg, former Sr. Advisor at the U.S. Department of the Treasury: “For our European allies, the presence of more U.S. oil in the market will offer more supply options. This will mean that European consumers look less to Russia, from which they receive roughly 40% of their oil supplies and which has a history of coercive energy supply policies.” (Congressional testimony, 1/19/15)

Academic, Think Tank Community Support Crude Oil Exports

  • Will Marshall, president of the Progressive Policy Institute: “Allowing U.S. oil to flow into world markets also would enable our friends and allies to diversify their energy portfolio and reduce their dependence on unstable or unfriendly suppliers… U.S. policy should aim instead at promoting energy security. In addition to diluting the ability of any resource-rich nation to manipulate oil prices or restrict supplies, rising U.S. exports would provide a politically stable and reliable source of energy and thereby help to make global markets more resilient against conflicts or natural disasters.” (Daily Beast, 8/28/14)
  • Harvard Business School: “With abundant resources, restrictions on exports created in response to the 1970s’ energy crises are no longer needed, and exports would boost U.S. economic and job growth while benefitting friendly nations.” (America’s Unconventional Energy Opportunity, 6/2015)
  • Columbia University’s Center on Global Energy Policy: “Increased US crude production can weaken the economic power, fiscal strength and geopolitical influence of other large oil producing countries. The magnitude of any export policy-driven impact is small, however, relative to recent oil market developments. More important for US foreign policy are the current crude trade relationships retained and new ones created if export restrictions are modified or lifted, along with the potential for greater US diplomatic leverage in future application of sanctions or pursuit of other objectives.” (Report: Navigating the U.S. Oil Export Debate, 1/2015)
  • Atlantic Council’s Global Energy Center: “The consensus of our task force experts is that the arguments for lifting the crude oil export ban are very strong, based on economic, security, and fair trade principles. Moreover, the combination of these elements would increase US strength and leadership capabilities that are essential to optimizing the foreign policy benefits of the energy boom to a wide range of security and geopolitical interests.” (Atlantic Council Global Energy Center, 7/30/15)
  • Brookings Energy Security Initiative: “We recommend that the U.S. reconsider and modernize its energy policy by lifting the ban on crude oil exports entirely and immediately. It is evident to us, based on our policy deliberations and the extensive macroeconomic modeling of the U.S. economy, and the global oil market research we have commissioned, that the greater U.S. exports of crude oil, the greater the economic and energy security benefit to the country. In addition to the parochial benefits to the nation, as a leader in world trade circles, where the U.S. is a consistent advocate for open markets and transparency, continued restrictions on crude oil exports have the potential to tarnish the U.S. global standing and hinder its pursuit of strengthening energy security.” (Changing Markets Economic Opportunities from Lifting the U.S. Ban on Crude Oil Exports, 9/2014)
  • Bipartisan Policy Center: “A key question for policymakers and voters is whether lifting restrictions on crude oil exports will meaningfully affect domestic gasoline prices. In short, the answer is no. Increased U.S. production in recent years has contributed to a far more resilient global market place that is reflected in lower global prices and greater resiliency against supply interruptions… The current restrictions on exporting crude oil are an anachronism. Forged in a bygone era of vulnerability, this policy is now inhibiting our ability to capitalize on America’s energy strength.” (Congressional testimony, 6/2/15)
  • Aspen Institute: “There is an excellent case on policy grounds to end the long-standing prohibition on exports of U.S. crude oil. The economic case for such an action is even more compelling… Lifting the ban on oil exports, which arguably could be done by executive action, is a simple and effective way to support high economic growth, better jobs for a beleaguered segment of the working population and for skilled workers and engineers, and energy self-sufficiency for the United States and its allies. (Aspen Institute, 10/2014)
  • Resources for the Future: “All parties can agree that lifting the ban confers some advantages to the United States as a whole. It would improve our trade balance and provide us with greater geopolitical leverage… In this issue brief, we offer economic logic and estimates from our modeling and data analysis suggesting that the price of gasoline will likely fall by around three to seven cents a gallon.” (Crude Behavior: How Lifting the Export Ban Reduces Gasoline Prices in the United States, 3/2014)

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