Lifting oil export ban would spark U.S. economy
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[May 29, 2014] By
WASHINGTON (Reuters) - If
U.S. lawmakers reverse a 40-year ban on oil exports it
would add more than $1 trillion to government revenues
through 2030, trim fuel prices, and add an average of
more than 300,000 jobs a year, according to a report by
an energy research group.
In one of the most optimistic assessments about unlocking U.S. crude
exports, the IHS report said gasoline prices would fall some 8 cents
a gallon because overturning the ban would pour crude onto oil
markets and lower global fuel prices.
Government revenues from energy-related taxes and royalties would
increase $1.3 trillion from 2016 to 2030. Jobs during that period,
in both crude production and at oil field service companies, would
rise an average of 340,000 a year and peak at an additional 964,000
in 2018, IHS said.
"This would be a significant economic stimulus that would be paid
for by the private sector, not by the government - in fact the
government would make a lot of money," Daniel Yergin, an energy
historian and IHS vice chairman, said in an interview.
Only Congress can fully reverse the restraint on exporting crude.
Congress put the ban in place after price shocks from the 1973 Arab
oil embargo led to the notion that the United States was running out
But supply worries have evaporated in recent years as directional
drilling and hydraulic fracturing, or fracking, have sparked an oil
boom that promises to make the United States the world's biggest
crude producer, ahead of both Saudi Arabia and Russia.
Some energy policy analysts say environmentalists, who have been
galvanized by the Keystone XL oil sands pipeline project, could be a
wild card in the move to free up U.S. crude exports, which would
bring higher domestic oil output.
Yergin said opening up U.S. exports would not hurt the global
environment because it would not add to the amount of oil produced
around the world. It would simply shut in exports from countries in
the Middle East and other regions, he said.
This year no major legislation has surfaced to overturn the ban and
few expect lawmakers to introduce any measures before the Nov. 4
midterm elections. Backers of any reversal would have to placate
lawmakers from Northeastern states, where refineries are profiting
by processing new bounties of crude from North Dakota's Bakken
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But Russia's annexation of Crimea, as well as the potential economic
benefits to federal and state governments, have begun to grab the
attention of U.S. lawmakers, Yergin said.
"The crisis in Ukraine has tilted the politics in a way that has
caused a pivot," Yergin said. "It's realized now that the ability to
export oil is an additional dimension to America's role in the
world. It enhances our position and influence."
In the midst of Russia's confrontation with Ukraine - and the
potential it has for cutting supplies of natural gas and crude to
Europe - many U.S. lawmakers have been calling for quick approvals
of more U.S. energy exports.
The report, paid for by energy companies including ExxonMobil Corp <XOM.N>,
Chevron <CVX.N> and ConocoPhillips <COP.N>, can be seen here:
(Reporting by Timothy Gardner; Editing by Tom Hogue)
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