WASHINGTON (Reuters) – If U.S. lawmakers reverse a 40-year ban on oil exports it would add more than $1 trillion to government revenues through 2030, trim fuel prices, and add an average of more than 300,000 jobs a year, according to a report by an energy research group.
In one of the most optimistic assessments about unlocking U.S. crude exports, the IHS report said gasoline prices would fall some 8 cents a gallon because overturning the ban would pour crude onto oil markets and lower global fuel prices.
Government revenues from energy-related taxes and royalties would increase $1.3 trillion from 2016 to 2030. Jobs during that period, in both crude production and at oil field service companies, would rise an average of 340,000 a year and peak at an additional 964,000 in 2018, IHS said.
“This would be a significant economic stimulus that would be paid for by the private sector, not by the government – in fact the government would make a lot of money,” Daniel Yergin, an energy historian and IHS vice chairman, said in an interview.
Only Congress can fully reverse the restraint on exporting crude. Congress put the ban in place after price shocks from the 1973 Arab oil embargo led to the notion that the United States was running out of oil.
But supply worries have evaporated in recent years as directional drilling and hydraulic fracturing, or fracking, have sparked an oil boom that promises to make the United States the world’s biggest crude producer, ahead of both Saudi Arabia and Russia.
Some energy policy analysts say environmentalists, who have been galvanized by the Keystone XL oil sands pipeline project, could be a wild card in the move to free up U.S. crude exports, which would bring higher domestic oil output.
Yergin said opening up U.S. exports would not hurt the global environment because it would not add to the amount of oil produced around the world. It would simply shut in exports from countries in the Middle East and other regions, he said.
This year no major legislation has surfaced to overturn the ban and few expect lawmakers to introduce any measures before the Nov. 4 midterm elections. Backers of any reversal would have to placate lawmakers from Northeastern states, where refineries are profiting by processing new bounties of crude from North Dakota’s Bakken region.
But Russia’s annexation of Crimea, as well as the potential economic benefits to federal and state governments, have begun to grab the attention of U.S. lawmakers, Yergin said.
“The crisis in Ukraine has tilted the politics in a way that has caused a pivot,” Yergin said. “It’s realized now that the ability to export oil is an additional dimension to America’s role in the world. It enhances our position and influence.”
In the midst of Russia’s confrontation with Ukraine – and the potential it has for cutting supplies of natural gas and crude to Europe – many U.S. lawmakers have been calling for quick approvals of more U.S. energy exports.
The report, paid for by energy companies including ExxonMobil Corp <XOM.N>, Chevron <CVX.N> and ConocoPhillips <COP.N>, can be seen here: www.ihs.com/crudeoilexport
(Reporting by Timothy Gardner; Editing by Tom Hogue)