US exports of oil would lead to economic boom

Fuel Fix:

The United States would attain broad economic benefits, including lower gasoline prices and new jobs, by ending a 39-year-old ban on exporting crude, according to an analysis released Thursday.

The assessment, conducted by IHS for more than a dozen oil companies, is the first of several expected reports examining the issue, as domestic producers implore Obama administration officials to end the 1970s-era restrictions they say threaten to throttle U.S. crude production.

It also is aimed at skeptical policymakers in the nation’s capital who are concerned consumers would be hurt by lifting the ban on selling U.S. crude overseas and are wary of industry’s claims that changes are urgently needed to sustain record-setting domestic oil production. Most notably, Energy Secretary Ernest Moniz told industry leaders in March that they had not “clearly and concisely” stated the case for exports.

The IHS report, commissioned a month before Moniz’s remarks, delivers a raft of economic evidence that lifting the ban would be good for consumers and the country — predicting virtually no financial downside.

“Overall, the benefits to the U.S. economy — and not just the oil-producing states, but across the country — are quite considerable,” said IHS Vice Chairman Daniel Yergin in an interview with the Houston Chronicle.

The report finds that lifting the ban would:

• trigger $746 billion in investment from 2016 to 2030, causing domestic oil production to climb 1.2 million barrels per day more than if the trade restrictions remained intact.
• lower gasoline prices by 8 cents per gallon on average, as U.S. crude hits the world market and adds to supplies used by refiners around the globe.
• support an additional 394,000 direct and indirect jobs per year on average through 2030, as a result of the increased economic activity tied to the rise in crude production.

Most of the changes would unfold quickly, IHS predicts, rapidly resolving a growing mismatch between the light, sweet crude increasingly flowing from U.S. wells and the nation’s 133 refineries, mostly geared toward processing heavier, less desirable alternatives.
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There is much more.

Selling to the open market would lower the world price of oil and therefore lead to lower gas prices in the US.  What the US really needs to do is stop its policy of artificial scarcity and open up federal sites to drilling.  If we did that, thousands of jobs would be created and there would be no shortage of oil on the US market.  It would enhance the US trading posture with the world and contribute to a manufacturing boom in this country.