Easing US Oil Export Ban Unlikey to Raise Gasoline Prices
A government study on Thursday essentially supported the notion that easing the decades-old restriction on exporting U.S. crude was more likely to lower than raise gasoline prices for American motorists, a conclusion that could ease concerns among lawmakers about changing the policy.
U.S. gasoline prices are mainly set by global oil prices, the Energy Information Administration said in a highly anticipated analysis.
"The effect that a relaxation of current limitations on U.S. crude oil exports would have on U.S. gasoline prices would likely depend on its effect on international crude oil prices, such as Brent, rather than its effect on domestic crude prices," said the EIA.
The report is the latest to conclude that allowing exports will not, by itself, significantly raise local pump prices, a key concern of opponents of lifting the ban.
The EIA, part of the Department of Energy, said that since domestic gasoline prices are set more by the global market, they would be less affected by a change in domestic policy.
This should bolster the case for lifting the ban by oil producers such as Pioneer Natural Resources, Anadarko Petroleum and Marathon Oil, which want an expanded market for their crude.
Republican Senator Lisa Murkowski from Alaska, who in January started a campaign to relax the oil export ban, said the report proves that a change in policy would be advantageous to the United States.
"If domestic gasoline prices are tied to the Brent worldwide index price, then exporting U.S. oil to our friends and allies will not raise gasoline prices here at home and should, in fact, help drive down prices," she said in a statement.
Several think tanks, from Resources for the Future to the Brookings Institution, as well as the federal Government Accountability Office (GAO), have also found that a policy change would have only minor price impact.
But relatively few politicians have joined Murkowski in pressing for change as they weigh the political implications of relaxing the ban, imposed by Congress in the 1970s.
"It will add yet another, and perhaps more resonant, drum beat to the slow march toward modernizing U.S. crude oil export policy, but it does not change the fact that this will be a multi-factor and very political decision," said David Livingston, an associate with the Carnegie Endowment for International Peace.
He said while domestic gasoline prices may feel little overall impact from a policy change, the price impacts could vary across different U.S. regions due to infrastructure bottlenecks and local market quirks.
Environmental groups say relaxed export laws will lead to higher greenhouse gas emissions, even as the Obama administration aims to cut carbon pollution in the power sector and other sections of the economy.
Oil refiners such as PBF Energy, Monroe Energy and Philadelphia Energy Services, have joined forces to push back against the drive to ease the ban in Congress, fearing their input prices will rise.
(By Valerie Volcovici; Additional reporting by Timothy Gardner; Editing by Ros Krasny, James Dalgleish, Chris Reese and Marguerita Choy)