Following the release of a report which looks at the state by state impact of crude oil exports, API Vice President for Regulatory and Economic Policy gave a briefing. Some of the key points are below.
The facts and figures
‘As you probably know, gasoline costs are tied to a global market, and ICF’s earlier report confirmed that additional exports could help increase energy supplies, put downward pressure on the prices at the pump, and bring more jobs to America. In total, the study found that allowing exports could add 300 000 jobs to the US economy in 2020 and save consumers up to US$ 5.6 billion per year, on average, between 2015 and 2035.
‘Today’s state level analysis provides a more detailed look inside of America’s crude oil market and illustrates how energy exports could boost job creation in all 50 states. It also provides members of Congress their first chance to see how local constituents could benefit from opening the doors to trade.
‘The US is poised to become the world’s largest oil producer, and the study shows that access to foreign customers will create economic opportunities across the country. When it comes to crude oil, the rewards of free trade are not limited to energy producing states. New jobs, higher investment, and greater energy security from exports could benefit workers and consumers from Illinois to New York, especially in areas where consumer spending and manufacturing drive growth.
‘According to the study, 18 states could gain more than 5000 jobs each in 2020 from exports of crude oil and state economies could grow by hundreds of millions of dollars each due to growing energy production.
‘Depending on global price trends, nine states…could see over US$ 1 billion each in state economic gains in 2020. Eight states…could gain over 10 000 jobs each in 2020.
‘As you might expect, the highest returns would flow to those states with active oil production. Texas alone could gain up to US$ 5.21 billion in added economic activity and over 40 000 jobs in 2020. In North Dakota, ICF forecasts an additional 22 000 jobs and US$ 4.81 billion in state income in 2020. These areas, however, are only part of the equation. States with significant manufacturing and consumer spending, such as California, could add nearly 24 000 jobs and over US$ 2 billion in economic activity in 2020. Similarly, New York, an international hub for trade and finance, could add more than 15 000 jobs and US$ 1.95 billion in economic activity in 2020. And, in the middle of the country, a state like Illinois could add 10 000 jobs and US$ 990 million in state income in 2020.
‘In general, ICF estimates that job creation and economic growth would increase quickly in response to global demand. New drilling would plateau around 2020, with slower growth through 2035, under current market conditions, according to the report.’
‘Across the nation, we see that lifting crude export restrictions would yield overwhelmingly positive results. That is why, as Energy Secretary Moniz noted last year, America’s energy policies deserve some new analysis and examination in the context of what is now an energy world that is no longer like the 1970s.
‘Today, we’re producing nearly 50% more oil than we did in 2008. By 2015, the International Energy Agency predicts the US will surpass Saudi Arabia and Russia to be the world’s top crude oil producer.’
‘There is a growing realisation that this is a new era for American energy. Scarcity is giving way to abundance, and restrictions on exports only limit our potential as a global energy superpower. Additional exports could prompt higher production, generate savings for consumers, and bring more jobs to America. The economic benefits are well established, and policymakers are right to reexamine 1970s era trade restrictions that no longer make sense.
‘Of course, some will continue to argue that limits on trade are in the interests of consumers. But these arguments ignore the simple fact that consumers buy fuel, not crude oil, and the prices of refined products are set by a global market. Gasoline is already eligible for trade after oil is refined. Restricting the flow of America’s growing crude supplies only puts downward pressure on US energy production, not prices at the pump. But this analysis shows that if oil can flow to the global market, then we begin to see higher global supplies, more production, and consumer level benefits, as well as more American jobs.
‘Trade also allows for a more efficient distribution of heavy and light crudes, higher US refinery output, and a lower trade deficit. Equally important, increased US strength as an energy exporter would provide greater stability in world markets and help to ensure that our allies overseas aren’t left dependent on any single supplier.
‘Strategically, a decision to expand US exports would bolster our geopolitical influence at a time when energy security is reshaping world power. And, as we can see in today’s study, the benefits of crude exports are not limited to those in a few states, but would low to consumers and workers throughout the country.’
Adapted from briefing by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/02062014/api_briefing_on_state_export_benefits/