Opening up American crude for exports into the global oil market could boost domestic production by more than one million barrels per day, and would create or support nearly one million jobs in just four years, according to a new report from the energy consulting group IHS. The FT reports:
IHS argued that allowing exports would improve the fit between crude production and refining capacity in the US, and narrow the price differential between US oil benchmarks and their internationally traded counterparts, helping production companies to expand their output by an average of 1.2m b/d during 2016-30.The consultancy also suggested that allowing crude exports would create or support almost 1m jobs by 2018, and have a modest downward effect on US retail petrol prices.
Energy guru Daniel Yergin, vice-chairman of IHS, noted that the ban on crude oil exports has become something of an anachronism:
[Yergin] said the export ban first introduced in 1975 had made sense only to support the US oil price controls of the 1970s, but had been redundant for decades since those controls were abolished in 1981.
There are many factors to consider before deciding to open up our country’s suddenly flush domestic oil market to the rest of the world; it’s a complicated matter. This new report sets out a bullish case for major energy policy change, but the politics of such a shift are bound to be tricky. The Energy Information Administration is planning a new series on the topic, and you can expect this debate to heat up as we approach this fall’s midterm elections. In the furor that’s sure to follow, keep this in mind: this is surely the kind of problem we’d like to have.