Finland Times

 

A new study claims that a lift of the 39-year-old ban on exporting crude oil from the United States would result in falling gasoline prices and benefit to domestic consumers, a leader of the United States' largest oil trade group said Monday.

     

The American Petroleum Institute's Vice President for Regulatory and Economic Policy Kyle Isakower made the remarks at a conference call Monday.

     

Responding to criticism that selling the fossil fuel overseas would mean higher prices at home, Isakower said the study -- which was commissioned by the institute -- casts exports of U.S. crude as an economic win for consumers.

     

"Consumers are among the first to benefit from free trade, and crude oil is no exception," said Isakower. "Gasoline costs are tied to a global market, and this study shows that additional exports could help increase supplies, put downward pressure on the prices at the pump and bring more jobs to America."

     

The new study, conducted by consulting firms ICF International and EnSys Energy, finds if export was allowed, the cost of gasoline, heating oil and diesel fuel is projected to fall, saving American consumers on average up to 5.8 billion dollars per year between 2015 and 2035. Prices could decline as much as 3.8 cents per gallon in 2017, dropping as much as 2.3 cents per gallon, on average, from 2015 to 2035.

     

The study says the removal of the ban could bring up to 300,000 additional jobs in 2020, contribute as much as 38 billion dollars to the U.S. economy and reduce the nation's trade deficit by 22 billion dollars in that year.

     

The U.S. government banned exports of crude oil following the 1970s oil embargo, with small exceptions for Californian crude, oil from Alaska and sales to Canada.

     

But since 2008 the country has seen a dynamic transformation in oil and gas development spurred by the hydraulic fracturing of dense rock formations, a new technology used in drilling shale.

     

According to the latest figures provided by the U.S. Energy Information Administration, the country pumped an average of 7.84 million barrels of crude oil per day at the end of last year, more than 10 percent of total production globally.

     

The United States is expected to shift from a net importer to a net exporter by 2020 as shale production outpaces domestic demand. On an aggregate supply-demand basis, the country is rapidly approaching a self-sufficiency rate of 90 percent.

     

Oil companies are now calling on the U.S. government to ease the ban so that they can sell light sweet shale oil at the international market for a better price. They have long complained they had to sell cheaply because of over-supply domestically.

     

"This is a new era for American energy, but our energy trade policies are stuck in the 1970s," said Isakower. "It's time unlock the benefits of trade for U.S. consumers and further strengthen our position as a global energy superpower."