Crude oil export ban (2024)

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The crude oil export ban prohibited most crude oil exports from the United States to other countries. It was implemented in 1975 and lifted in December 2015.^[1][2]

Due to an increased use of hydraulic fracturing—also known as fracking—and horizontal drilling beginning in 2005, the United States increased its production of oil and natural gas. Opponents of the ban argued repealing it would increase job growth and domestic energy production. Proponents of the ban argued that its repeal could lead to higher domestic gasoline prices and negatively affect jobs at U.S. refineries.^[3][4][5]

Background

See also: Historical energy policy in the United States

In 1973, Arab members of the Organization of the Petroleum Exporting Countries (OPEC), an intergovernmental organization, imposed a ban on petroleum exports to the United States and to other countries that supported the state of Israel during the 1973 Arab-Israeli conflict. OPEC also cut oil production, leading to rising gasoline prices in the United States. At the time of the embargo, U.S. policies encouraged oil imports over domestic oil production. In response to the embargo and higher domestic gasoline prices, Congress passed the 1975 Energy Policy and Conservation Act, which directed the president to ban crude oil exports except for select types of oil.^[6][7][8]

On September 10, 2015, the House Energy and Power Subcommittee approved a bill to allow crude oil exports. The U.S. House of Representatives voted on October 9, 2015, to lift the crude oil export ban. The 261-159 vote passed, though the measure stalled in the Senate. President Barack Obama (D) promised to veto the bill. The Consolidated Appropriations Act of 2016 (HR 2029) included a provision to end the export ban. It passed both houses of Congress and was signed by President Obama on December 18, 2015. The full text of the spending bill can be accessed here.^{[9][10][11][12][13][14]}

Debate

Opponents

Prior to the ban's repeal in 2015, opponents of the ban had made the following arguments favoring its repeal:^[3][15][16]

• Lifting the ban would create jobs and economic growth.
• Less domestic crude oil production restricts the ability of state and local governments to collect tax revenue from energy production.
• The ban keeps crude oil prices below market prices, resulting in less production.

As of 2015, interest groups that had opposed the ban included the Brookings Institution, the Council on Foreign Relations, and the American Petroleum Institute.^[17]

In July 2013, Blake Clayton, adjunct fellow for energy at the Council on Foreign Relations, argued that "removing all proscriptions on crude oil exports, except in extraordinary circ*mstances, will strengthen the U.S. economy and promote the efficient development of the country's energy sector." Clayton argued that the ban served certain oil refineries in the United States rather than American consumers and that repealing the ban would increase production, contending, "Letting drillers reap extra profits from selling crude oil overseas, if the market dictates, would provide greater incentives for drilling, stimulating new supply."^[15][18]

In January 2014, Tim Boersma and Charles K. Ebinger of the Brookings Institution argued, "Domestic consumers do not substantially benefit from an export ban, and U.S. oil producers may soon be affected negatively by it." The authors contended that lifting the ban could generate up to $15 billion per year and result in increased domestic oil production and thus greater income for employees, more jobs, and more tax revenue for federal, state, and local governments. Alternatively, the authors argued that the potential disadvantages of lifting the ban could include rising domestic oil prices and fewer jobs at U.S. refineries that process domestic crude oil.^[16][6][19]

In a report issued in September 2016, the American Petroleum Institute argued that the ban prevents U.S. oil producers from accessing global markets, which leads to lower prices and thus less incentives for producers to increase production. The report contended, "The alternative [to lifting the ban] is a kind of energy isolationism, the shutting-in of domestic production from global markets, depressing prices for that output and eventually discouraging new production. This works against U.S. competitiveness and American consumers."^[20]

Proponents

Proponents of the ban made the following arguments:^[21]

• Repealing the ban would lead to fewer jobs at U.S. refineries because crude oil would be exported to foreign refineries.
• Lifting the ban could increase carbon dioxide (CO₂) emissions.
• Lifting the ban could lead to higher domestic oil and gasoline prices.

As of 2015, interest groups that supported the ban included the United Steelworkers Union, the Sierra Club, and the Center for American Progress.

In June 2015, Leo W. Gerard, international president of the United Steelworkers, argued that lifting the ban would negatively affect jobs at U.S. refineries. Gerard argued, "Lifting the ban would not only prove detrimental to the jobs of the men and women employed at U.S. refineries, but also to the communities that rely on the tax base generated from these wages."^[22]

In June 2015, Mike Brune, executive director of the Sierra Club, contended that repealing the ban would increase CO₂ emissions and thus result in human-caused climate change and global warming, arguing, "Lifting the crude oil export ban will also increase greenhouse gas emissions, hampering our nation’s efforts to combat climate change and lower U.S. emissions."^[22]

In January 2014, Daniel J. Weiss and Miranda Peterson of the Center for American Progress argued that lifting the ban could increase gasoline prices in the same way that gasoline prices rose after Congress repealed a ban on Alaska's crude oil exports to the lower 48 states in 1996. Weiss and Peterson contended, "This experience suggests that lifting the crude oil export ban could similarly raise gasoline prices because 68 percent of the price of a gallon of gasoline is the price of oil, according to [Energy Information Administration] EIA.^[23]

Recent news

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See also

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  Energy in the U.S.

• 

  Fracking in the United States

• 

  Environmental policy in the United States

Footnotes

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