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Testimony on benefits of lifting crude export ban

Hydrocarbon Engineering,

ConcoPhillips Chairman and CEO, Ryan Lance has testified to the benefits of lifting the outdated ban on US crude oil exports. Below are highlights from the testimony:

“The reason I am here is to offer my perspective on our nation’s crude oil export policy. And the reason we are all here is because this topic is at the centre of a unique and historic set of circumstances that, if embraced, have the potential to transform our nation’s energy outlook. Consider this: 1) in just a few short years, US ingenuity and technical prowess have unlocked a vast, sustainable resource base of crude oil and natural gas; 2) we have in place a vibrant producer industry that provides significant economic stimulus to our nation; 3) we have energy, and; 4) we have a fragile geopolitical climate that threatens US interests globally. These are the current realities. Yet, the potential of our nation to capture the benefit of these realities is undermined by a policy that was enacted for a far different reality more than 40 years ago. That policy is the ban on crude oil exports.”

“By any measure, our nation has been on a transformational journey, one that must continue if America is to fully realise our energy potential. The task ahead is to fully understand today’s realities and to make the appropriate policy decisions for these realities. In doing so, we can all play a part in sustaining this energy transformation, enhancing our energy security, and spurring economic benefit for our nation and for the American consumer.”

Key points supporting repeal

  • “A new era of US energy abundance. There is no longer any question about whether or not the US has enough oil and natural gas to meet domestic needs.
  • Exports would help consumers save at the gasoline pump. Studies by the Brookings Institute, IHS Inc., Colombia University, Rice University, ICF, Resources for the Future and the Federal Reserve Bank of Dallas have all found that exporting American crude oil will increase global oil supply and lower gasoline prices.
  • Jobs would be protected and created. Repealing the crude oil export ban is vital to the health of the domestic E&P business and will incentivise ongoing investment by industry.
  • Crude oil exports would grow the US economy. Export sales of crude oil would stimulate demand for domestic production, thus increasing the economic contributions accruing to the US from the energy renaissance.
  • Crude oil exports would strengthen the US standing in the world. US crud oil would find a ready market among purchasers seeking reliable supplies and enable our overseas allies to diversify their energy supplies, thereby strengthening US commercial and geopolitical influence.
  • Advanced technology and innovation are key drivers. The US energy renaissance is a result of leading edge technology that was originated, tested and perfected here at home, largely by the independent E&P companies.
  • Not all oil is the same. The light oil we are producing today from unconventional resources is very different from other types of oil.
  • Rising US crude oil production exceeds our domestic refining capacity. The rapid growth of US crude oil production, particularly light oil from unconventional resources, has overwhelmed the current refining capacity for this crude type.
  • American crude oil sells for less than global crude oil. The crude oil export ban, combined with the previously described mismatch of light oil with the needs of refineries, is discounting the value of an American product.
  • Removing the crude oil export ban would resolve the refining bottleneck. The easiest, most efficient and immediate solution to the refining challenge would be to allow producers to sell their crude oil into the export market, as can currently be done with other energy commodities such as refined petroleum products, natural gas and natural gas condensates.
  • Alaskan North Slope (ANS) oil represents the appropriate approach to crude oil export policy. In assessing the need for US crude oil exports, policymakers need only look to the example of oil produced on the ANS.
  • In lifting the ban, the federal government would still retain the discretion to reverse policy at any time. This point needs no further explanation.”

We should end the crude oil export restrictions

“The unique circumstances that exist at this time create a window of opportunity for policymakers to act prudently, swiftly and deliberately to end the ban on exports. Our nation has the resources, the industry capability and know how and clear economic drivers to allow exports without negatively impacting consumers. Policymakers have an opportunity to be on the right side of today’s industry, economic and geopolitical reality and bring greater prosperity to our nation.”

Adapted from testimony by Claira Lloyd

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