The American Petroleum Institute (API) and the American Exploration and Production Council (AXPC) released new analysis demonstrating the significant and growing economic benefits of America’s abundant crude oil resources for both domestic use and global export. The study, conducted by ICF, analyzed the six-year period since a bipartisan Congressional majority lifted a ban on exporting U.S. crude oil in December 2015. The study found that enabling open markets increased oil and natural gas development in America, which, over the six-year period, reduced global oil prices by an average of $1.93 per barrel; added $161 billion to U.S. GDP; and increased jobs in the U.S. by nearly 50,000, on average.
“American energy leadership doesn’t just deliver significant benefits to Americans – fueling the U.S. economy and American jobs, delivering reliable energy, and helping put downward pressure on prices, but it also strengthens global security and supports our allies,” said API President and CEO Mike Sommers. “U.S. energy exports provides critical stability to the global market, supports our allies across the world who depend on American energy to meet their needs and strengthens American energy security here at home. If the U.S. is not exporting energy, it leaves the door open for unstable nations or those with less stringent environmental standards to fill the void and reap the benefits.”
“As this analysis shows, lifting the ban on crude exports in 2015 saved Americans money at the pump, supported thousands of good-paying American jobs, and reduced our country’s dependence on foreign oil. At a time when Americans are hurting from the price at the pump, it’s clear that increasing the global supply of crude oil is critical to lower energy prices here at home and greater energy security around the globe,” said AXPC CEO Anne Bradbury.
The new study analyzes the changes that have occurred in U.S. oil and natural gas markets since Congress enabled crude oil exports compared to a hypothetical scenario where the ban on U.S. oil exports remained in place. The study found that lifting the ban on U.S crude oil exports has over a six-year period:
- Increased U.S. Crude Oil Production by 1.8 billion barrels: Allowing U.S. domestic oil prices to converge with international benchmarks, spurred more drilling activity leading to higher crude oil production, as well as higher production of associated natural gas and NGLs that come from oil wells.
- Decreased U.S. Consumer Expenditures on Refined Products and Natural Gas by $92 billion: Higher U.S. oil production expanded global oil supply, reducing global crude oil and refined product prices. Because there is free trade in petroleum products, U.S. fuel consumers have benefited from these lower product prices.
- Increased U.S. GDP by $161 billion: The benefits of lower fuel costs for U.S. consumers and higher revenues for U.S. oil producers (due to higher output and higher domestic crude prices) outweighed margin losses for U.S. refiners, resulting in a net benefit to U.S. GDP.
- Improved the U.S. Trade Balance by $178 billion: Higher U.S. exports have improved the U.S. trade balance, reducing the U.S. trade deficit by a measurable amount.
- Increased U.S. Employment by an average of 48,000 jobs: Lifting the crude export ban has increased U.S. employment, including direct jobs in the Upstream oil & gas sector, such as petroleum engineers and geologists, industrial machinery installation and maintenance, derrick operators, rotary drill operators, roustabouts, and service unit operators. The policy change has also created indirect and induced jobs.
Click here for more information on the ICF analysis.