A recent study details significant US jobs gains, reduced consumer fuel costs, and robust economic growth associated with future crude oil exports, according to Kyle Isakower, vice-president for regulatory and economic policy for the American Petroleum Institute. The new study, by ICF International and EnSys Energy, was released Mar. 31 during an API conference call.
“Consumers are among the first to benefit from free trade, and crude oil is no exception,” Isakower said, adding, “Gasoline costs are tied to a global market, and this study shows that additional exports could help increase supplies, put downward pressure on the prices at the pump, and bring more jobs to America. Access to foreign customers could drive significant investment in US production, helping to strengthen our energy security. Now that the US is poised to become the world’s largest oil producer, the economic case for exports is clear.”
Analysis from the API-commissioned study suggests that if current restrictions on crude exports were lifted:
• US weighted average petroleum products prices could decline as much as 3.8¢/gal in 2017, dropping as much as 2.3 ¢/gal, on average, during 2015-35. These price decreases for gasoline, heating oil, and diesel fuel are projected to save American consumers as much as $5.8 billion/year, on average, during 2015-35.
• The US economy could gain as many as 300,000 additional jobs in 2020. Consumer products and services and hydrocarbon production sectors would see the largest gains.
• US exports will expand and could narrow the US trade deficit by $22.3 billion in 2020, assuming all else equal, through increased international trade of crude oil.
• US gross domestic product could increase by as much as $38.1 billion in 2020, led by increases in hydrocarbon production and greater consumer spending due to lower retail process for gasoline and other petroleum products.
• Up to an additional $70 billion is projected to be invested in US exploration, development, and production between 2015 and 2020.
• US federal, state, and local government revenues could rise by as much as $13.5 billion in 2020.
• US oil production is expected to rise faster and could increase by as much as 500,000 b/d in 2020.
• US refiners could process, on average, an additional 100,000 b/d due to more efficient distribution of heavy and light crudes over the 2015 to 2035 period.
“This is a new era for American energy, but our energy trade policies are stuck in the 1970s,” said Isakower. “The US and China are the only major oil producers in the world that don’t export a significant amount of crude. It’s time unlock the benefits of trade for US consumers and further strengthen our position as a global energy superpower.”