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API on crude oil exports

Hydrocarbon Engineering,

Below are highlights from a press conference held by Jack Gerard, API President and CEO on US crude oil exports.

“As you know, parallel efforts are now underway in both the House and Senate to lift outdated restrictions on exports of crude oil from the US. This is a reflection of the growing bipartisan support for allowing US crude oil a competitive position on global markets, and a recognition that exports of crude oil would be good for consumers, improve our national security, and grow jobs and the economy. These votes will play an important role in determining whether America remains a global energy superpower for decades to come. If we act now to harness this once in generation opportunity, America is poised to add billions to the domestic economy, creating jobs up and down the energy supply chain. And, as study after study has shown, consumers will win because gasoline costs are projected to go down by allowing crude exports.”

Time to act

“Today, our message to policymakers is simple: now is the time to act. It’s good for American workers, good for our trade deficit, and good for our national security. Experts across the academic and political spectrum agree that American exports would spur greater US oil production, put more oil on the world market, and reduce the power that foreign suppliers have over our allies. Our ability to strengthen the global energy market against future disruptions will shape events around the globe, adding a key tool to America’s diplomatic arsenal. At this moment, US diplomats are paving the way for Iran to reassert itself as a major world energy supplier. American voters understand that lifting the ban on Iranian oil resources, while maintaining a ban on US companies, is illogical and restricts our own competitiveness. It doesn’t make sense.

“US energy producers should not be placed at a competitive disadvantage to anyone, whether it is Russia, Iran or any oil producing country. This outdated crude exports policy must be repealed to level the playing field and allow the US to flourish as a global energy superpower. We’ve now seen reports, from Columbia University, IHS, ICF, Brookings, the Aspen Institute, the Government Accountability Office, the Congressional Budget Office, the Energy Information Administration and others, all pointing to the same conclusions. Blocking trade in crude oil harms consumers, it harms the economy, and it undermines America’s role as a global leader.”

Taking the lead

“But this isn’t just about economics. It’s also a questions of geopolitical leadership. The ambassador for our close ally, the Czech Republic, recently testified to the House Agriculture Committee that US energy exports would send a strong signal that democracies stick together and can counter nations that use their energy resources to harm other nations…ultimately creating a safer world.

“And President Obama’s former defence secretary and CIA director Leon Panetta, who also served as President Clinton’s Chief of Staff, recently joined President George W. Bush’s former national security adviser Stephen Hadley in strongly endorsing efforts to lift the ban on US oil exports. They wrote: The US remains the great arsenal of democracy. It should also be the great arsenal of energy. In fact, just this week, two more former security experts from the Obama administration reinforced that point. General James Jones, former national security advisor to President Obama and Supreme Allied Commander for Europe under President George W. Bush, said that US energy leadership could serve as a sharp contrast to Russia’s policy of using energy as a blunt instrument of national power.

“And Michele Flournoy, President Obama’s former Under Secretary of Defence for Policy, testified to the Senate Banking Committee that export restrictions hamper the ability of America’s national security leaders to reap the strategic benefits of our energy assets. We have this opportunity because the US energy revolution has transformed the global landscape.”

Global landscape

“Domestic production has surged from an average of about 5 million bpd in 2008 to more than 9.7 million bpd in April of this year. As a result, blocking exports has become an economic liability. In fact, ICF International estimates that crude exports could lower our trade deficit by another US$22 billion in 2020 and add US$38 billion to the GDP. An analysis by IHS and Daniel Yergin found that free trade in oil could add nearly 1 million jobs to the economy at its peak, with jobs in the supply chain, extending far beyond states in the oil patch, averaging 124 000 annually from 2016 – 2030. And Brookings estimates that US consumers could save up to 12 cents per gallon on fuel.

“But the competitive edge promised by new crude production has been dulled by outdated trade policies. American crude sells below global benchmarks, putting a damper on new production and the jobs that follow. Lifting the ban, however, allows the right crude to flow efficiently to where it is needed. More oil is available in the global market and consumers benefit from downward pressure on fuel prices. Other nations are focused on staying competitive in a low price environment. And policymakers see that every new well that is or isn’t drilled has an impact on US jobs, US energy security and future economic growth. Bipartisan momentum is stronger than ever, and we urge members of the House and Senate to schedule committee and floor votes on this issue as soon as possible. Now is the time to send a message to allies around the world that America is ready to lead.”

Edited from speech by Claira Lloyd

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