Analysis finds US oil exports have reduced consumer costs - Midland Reporter-Telegram .

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Consumers around the globe been reeling from record high gasoline prices and other high energy prices this spring and summer.

But a recent study conducted by ICF International and presented by the American Exploration and Production Council and American Petroleum Institute shows that markets would be worse off if the US had not resumed crude oil exports in December 2015.

“As our study shows, domestic and international oil market would likely be worse off today in the absence of US crude oil exports and the domestic production growth they have enabled. IHS Markit noted as much last fall, writing in a policy brief that a ban on U.S. crude oil exports would ‘generate more upward pressure on crude oil prices – and thus increase the price of U.S. gasoline,’” Scott Lauermann, manager, media relations with API, told the Reporter-Telegram by email. 
Liz Bowman, vice president, communications with the AXPC, agreed the study found crude exports actually lower domestic energy prices.

“In addition to this study, we have a blog that explains that stopping crude exports would further raise prices, not lower them,” she told the Reporter-Telegram by email.

The council’s blog makes the following points about the impact of stopping crude exports:

•    US crude oil exports increase the global supply of crude oil, which helps lower prices at the pump
•    Expanding US oil production has been linked with lower gasoline prices
•    Restricting US crude oil exports could raise the cost of gasoline and other refined products at a time when Americans are already paying record prices
•    Refined products are global commodities and correlate closely with the global crude oil benchmark (Brent)

IFC International analyzed data from the six years since exports resumed and found enabling open markets increased US oil and gas development, which reduced global oil prices by $1.93 per barrel over those six years, added $161 billion to US gross domestic product and added nearly 50,000 jobs.

“Exporting domestic production that exceeds domestic demand adds oil to the world supply bucket thereby reducing price,” Mickey Cargile of Cargile Investment Management, told the Reporter-Telegram by email. “Restricting those exports would reduce world supply and increase price.”

The Midlander added that the oil currently being exported would have no market otherwise. The excess production cannot be moved economically to many refineries, he said, and many refineries are not properly tooled to refine domestic production.
The study echoed Cargile’s assertion that higher US oil production expanded global supply, reducing crude and refined product prices. More open markets helped spur more US drilling activity, increasing US oil production by 1.8 billion barrels, not to mention associated natural gas and natural gas liquids. 

Exports reduced US consumer expenditures on refined products and natural gas by $92 billion over those six years, the study found. Those lower consumer prices and higher revenues for US producers, which outweighed revenue losses for US refiners, expanded US GDP by $161 billion. They also improved the US trade balance by $178 billion.

The study also credited exports with increasing US employment by an average of 48,000 jobs through new hiring in the upstream oil and gas sector. Jobs were created for, among others, derrick operators, first-line supervisors and managers, rotary drill operators, roustabouts, and service unit operators, and created direct, indirect, and induced jobs.