Ending the US crude oil export ban will produce such significant energy, economic, and geopolitical benefits that it appears likely to come to a Senate vote during 2015, Energy and Commerce Committee member John Hoeven (R-ND) predicted.
“Low prices or high prices, we’ll be in a better place economically if US producers can compete globally,” he said in keynote remarks at a May 20 forum sponsored by the American Council for Capital Formation. “We’ll need the right mix of pipelines, rails, and roads, but it will be a net win for the country and for consumers.”
Other speakers at the event, where ACCF released a new report, “Crude Oil Exports: Economic and Geopolitical Impacts,” said it’s difficult to determine the White House’s actual stand on the idea of repealing the crude export ban which was imposed 2 years after the 1973 Arab oil embargo.
“The Obama administration recognizes that the private sector will need to make the final decisions on where crude exports would go, but it still wants to get some political capital out of this,” observed Raymond Keating, chief economist at the Small Business & Entrepreneurship Council.
“There have to be negotiations,” said Progressive Policy Institute Pres. Will Marshall. “If the Republicans want the Keystone XL crude oil pipeline, they’ll need to be ready to seriously discuss climate change. That’s become the Elephant in the Room. Energy policy can’t be separated from it.”
Matthew J. Slaughter, incoming dean at Dartmouth College’s Tuck School of Business and a former White House Council of Economic Advisors member, said the domestic oil and gas renaissance, which hydraulic fracturing and horizontal drilling caused, typified other businesses’ technological breakthroughs. It also increased North Dakota’s crude oil production 12-fold over 15 years, he added.
Not just Big Oil
“Opportunities are tremendous for small business,” said Keating. “This isn’t just for Big Oil. Up to 58% of the firms active in this new oil and gas surge have less than 20 employees. States where oil and gas production has increased are economically stronger than states where it hasn’t.”
Marshall said the Obama administration has rebalanced its foreign policy toward Asia and is building security zones with allies like Japan and Korea. “The simple fact of more domestic growth from these tight oil and gas resources is improving our geopolitical influence significantly,” he said. “Crude oil exports would be impressive new arrows in the US geopolitical quiver.”
Japan, Asia, and Taiwan are particularly interested in potentially exporting crude from the US because there wouldn’t be choke points like the Strait of Hormuz or Malacca along the shipping route, said Takashi Kume, special advisor to the Japanese Ministry of Economy, Trade, and Industry.
Trading companies would make the actual decisions to switch to US suppliers, he emphasized. “This could make more resilient oil markets possible and benefit the US,” Kume said. “The US and Japan share the same free trade values, unlike China, which imposed restrictions on rare earth exports.
“Your Asian friends besides Japan look forward to hearing some good news on this in the future,” he told the group.
Contact Nick Snow at [email protected].
