By Wendy Laursen 2015-09-09 17:45:17
The American Petroleum Institute (API) has launched a new series of ads highlighting what it sees as the broad economic and national security benefits of crude oil exports.
“We’re speaking directly to the consumers and workers who will benefit from lifting these outdated trade restrictions,” said API’s executive vice president for government affairs, Louis Finkel. “The House and Senate are considering bipartisan legislation to lift the ban, and it’s important to share the facts on how free trade in oil could create new jobs, put downward pressure on fuel costs, and strengthen our energy security.”
The new television and online campaign will begin this week in Colorado, Florida, Illinois, Indiana, New Mexico, New York, New Jersey, Pennsylvania, Virginia, Maryland, West Virginia, Washington and the District of Columbia.
The ads feature quotes from major U.S. news outlets explaining how lifting America’s ban on oil exports could spur additional U.S. energy production, generate jobs, protect consumers and strengthen U.S. allies. The campaign is a key component of API’s broader energy literacy efforts, emphasizing the importance of updating U.S. energy policies to reflect America’s rise as a global energy superpower.
“Study after study, including last week’s report from the U.S. Energy Information Administration, shows that allowing U.S. oil exports could benefit consumers and sharpen America’s competitive edge. And our allies around the world are eager to reduce their reliance on less friendly nations. As lawmakers consider a deal that would put Iran’s crude on the global market, it’s worth asking why U.S. producers don’t yet have that same access to customers abroad. Now is the time to act, and we appreciate the efforts of leaders in Congress who are pushing to quickly harness America’s economic and diplomatic potential as an energy superpower.”
A Columbia University study published this year examines the issues involved: Although the U.S. will likely continue to consume more oil than we produce, and thus remain a net petroleum importer, there are growing concerns about the ability of the U.S. refining system to absorb future growth in domestic crude production. Virtually all the recent and projected growth in U.S. crude output is lighter weight and lower sulfur than the Canadian, Mexican, Venezuelan and Middle Eastern crudes many U.S. refineries are currently configured to process. Refineries elsewhere in the world process light oil, but under current law, U.S. crude oil exports are largely (though not entirely) prohibited.
There are both proponents and opponents of increasing the amount of crude oil that can be exported from the U.S., say the study authors Jason Bordoff and Trevor Houser. “Domestic oil producers worry that without access to foreign markets, they will have to discount their oil to incentivize refiners to process it at existing facilities or cover the investment required to build new ones. Lower market prices for U.S. crude producers could reduce upstream investment and future domestic production growth. Many refiners worry that allowing crude oil exports will raise domestic crude prices, harm their competitiveness and reduce the incentive for new refining investments.
“Consumers worry that exporting oil could increase gasoline and diesel prices and leave them more vulnerable to future international supply disruptions. And some environmental groups worry that allowing exports will result in more shale development domestically and more greenhouse gas emissions globally.”
A Call to Politicians
Last month, API President and CEO Jack Gerard urged candidates at the upcoming presidential debates to outline their vision for harnessing the economic and national security opportunities created by America’s energy revolution.
“We can pursue an American future of energy abundance, self-determination and global leadership or take a step back to an era of scarcity, dependence and uncertainty,” said Gerard. “We’re calling on candidates – Republican and Democrat alike – to share with voters their vision for harnessing this American energy moment.
“Make no mistake – America’s role as an energy superpower is not ensured. We’ve seen the mission creep of federal agencies on full display under this administration. Thousands of pages of new roadblocks and mandates are making their way through the regulatory pipeline.
“We cannot afford for our next president to be blinded to the opportunities in front of us by a stale mindset of ‘70s-era scarcity. That is why those who seek to represent us must go beyond the talking points and outline a clear vision for energy that will advance our nation’s economy, security and standard of living.”
The Energy Trade
A mid-year trade report from the U.S. Commerce Department showed that the oil and natural gas industry continues to drive U.S. economic gains in 2015. It’s a trend that could accelerate under free trade policies, said API Chief Economist John Felmy.
“Despite a very competitive global market, the U.S. energy revolution continues to push our trade balance in a positive direction,” said Felmy. “Oil imports remain on the decline, and strong exports of petroleum and refined products are creating new opportunities for America to bring wealth and jobs back to U.S. shores.”
The total U.S. trade deficit peaked at $762 billion in 2006, prior to the surge in U.S. oil and natural gas production. By 2014, it had dropped to $508 billion. The latest report, covering trade data through June 2015, shows that the U.S. trade deficit among petroleum and petroleum products fell by 56.1 percent compared to the first six months of 2014.
That growth helped to hold the total U.S. year-over-year trade balance steady, despite a 23.1 percent increase in the trade deficit among non-petroleum products. Due to low commodity prices, the value of U.S. petroleum and petroleum product exports fell by $20.2 billion, despite high export volumes, but petroleum-related imports fell faster, down $78.6 billion compared to the first six months of 2014.
“Outdated trade policies are among the biggest threats to America’s continued growth right now,” said Felmy. “Accelerating approval of LNG export terminals and lifting the 1970s era ban on crude oil exports would put America in the driver’s seat on trade. America is now the world’s largest producer of natural gas, providing our workers an important competitive advantage in the global market. And study after study shows that lifting the ban on crude exports will mean more jobs, downward pressure on fuel costs and could reduce the power that foreign suppliers have over our allies overseas.”
The next United States presidential election of 2016 is expected to be held in November 2016.