Obama resists pressure to lift 40-year-old ban
With U.S. energy production at near-record highs, pressure is mounting on the Obama administration to lift a 40-year-old ban on crude oil exports.
The White House acknowledged that sending American crude oil abroad would not drive up domestic gas prices, a common refrain among export opponents. In fact, Energy Information Administration officials said exports actually could drive down prices even further by increasing global supply.
But unlike American natural gas export projects — which President Obama has come to support and the Energy Department gradually has begun to allow — the administration has shown no signs of changing course on the crude oil ban, a relic from the early 1970s when global shortages led the federal government to guard U.S. fuel supplies and block export.
The dynamic today is dramatically different, with U.S. crude oil production near all-time highs and poised to set a record this year.
“America’s growth as an energy superpower has been a game-changer, but our trade policies are stuck in the 1970s. Study after study shows that free trade in crude oil would promote the creation of U.S. jobs, put downward pressure on fuel costs and reduce the power that foreign suppliers have over our allies,” said Erik Milito, director of upstream and industry operations at the American Petroleum Institute.
Indeed, the U.S. energy landscape has been transformed in just a few years. Less than a decade ago, most analysts predicted that the U.S. would remain a leading importer of oil and gas. Today, America is the world’s No. 1 producer of oil and natural gas, thanks largely to the discovery of vast deposits such as the Bakken oil field and the Marcellus Shale, and the advancement of the drilling technique known as hydraulic fracturing.
The U.S. produced 3.2 billion barrels of crude oil last year, according to EIA figures, a 30-year high. In 2013, the U.S. produced 2.7 billion barrels, up from 2 billion a decade ago.
Production has remained strong this year at about 9.4 million barrels per day on average, government data show.
Last year, the U.S. also averaged more than 74 billion cubic feet of natural gas production per day, EIA numbers show.
Although the administration gave the green light to natural gas exports — which could help the U.S. become a net energy exporter within five years, according to the EIA — the White House still is standing in the way of oil exports.
The White House has given no indication that it will reverse course on the crude oil ban anytime soon. Top environmental organizations also remain opposed to changing course on oil export policy.
Still, administration officials now acknowledge that selling American fuel around the world could carry real economic benefits, giving more ammunition to export proponents who say the U.S. is missing out on a key economic opportunity.