By HEESU LEE
The US will benefit from increased oil production and lower
gasoline prices if the government lifts restrictions on crude
exports, according to IHS.
The worlds largest oil consumer may save an average of
$67 billion/year from its import bill as domestic output may
rise as much as 949,000 bpd in 2016 with the removal of the
export ban, the Colorado-based consultant said in a report.
Such a scenario would support 964,000 additional jobs in
2018, it predicted.
Making US oil available to global markets would unlock
the current supply and refining
gridlock, IHS said.
It would lead to a total of $746 billion in additional
investment during the study period of 2016 to 2030 and an
average of 1.2 million barrels per day more oil production
A 1975 US federal law bans most oil exports, with only
shipments of refined products such as gasoline and diesel
allowed. The Merchant Marine Act of 1920, known as the Jones
Act, also restricts shipments within the US to vessels that
are built in the country and crewed by Americans.
Gasoline prices in the US may potentially drop by 8 cents/gal
each year on average if the export ban is lifted, according
to IHS. This would translate to $265 billion in savings for
US motorists during the 2016 to 2030 period, it said.
The 1970s-era policy
restricting crude oil
exports -- a vestige from a price controls system that ended
in 1981 -- is a remnant from another time, said Daniel
Yergin, the vice chairman at IHS. It doesnt
reflect the dramatic turnaround in domestic oil production,
led by tight oil, which has reversed the USs oil
position so significantly.
The mismatch between rising US oil production from shale and
the countrys ability to refine it is driving the debate
over whether to lift the ban on crude exports, Energy
Secretary Ernest Moniz said earlier this month.
The driver, or the consideration, is that the nature of
oil were producing may not be well matched to our
said an industry event in Seoul. Bakken in North Dakota
and Eagle Ford in Texas shale produce very light oil that is
not well-connected by infrastructure to the refineries that
can process it.
US crude inventories rose last month to the highest since the
governments Energy Information Administration began
publishing weekly data in 1982. Stockpiles increased to 399.4
million bbl in the week to April 25, according to the EIA.