WASHINGTON — Energy writer Daniel Yergin and his consulting group say exports of American crude oil would allow U.S. producers to raise production enough to knock global oil prices down and cut gasoline costs by 8 to 12 cents a gallon.
In a study released Thursday, IHS Energy found that lifting the current ban on crude oil exports would align U.S. and global oil prices, giving producers more profits to invest in drilling. The study, sponsored by Exxon Mobil Corp. and several other oil companies, said the current situation is leading to a domestic surplus of some types of oil — a surplus that is dropping producer prices in North Dakota and Texas without benefiting gasoline consumers.
“When you step back and look at it, the ban on crude exports, and where it all came from, is actually very odd,” said Yergin, a vice chairman of IHS and the author of The Quest: Energy, Security and the Remaking of the Modern World. “It’s the remnant of this other era, the 1970s price controls on oil.”
Congress restricted oil exports in 1975 to keep producers from getting higher prices in international markets than they were allowed to charge in the United States. The controls were lifted in 1981 under President Ronald Reagan.
During the administration of President Bill Clinton, the export ban was lifted for crude oil produced in Alaska. For a few years, producers sold Alaskan oil in Asian markets. Alaskan production has steadily declined, however, making exports less viable.
The ban still has considerable support, however. Lifting it would raise U.S. crude oil prices closer to a global price.
The United States still imports about 30 percent of its crude oil requirements. While that is far less than the 60 percent import peak of 2005, exporting oil goes against the grain of 40 years of economic insecurity.
Exports are also opposed by several independent oil refiners, such as Dallas-based Alon USA and San Antonio’s Valero. For the last several years, these refiners have been able to buy discounted domestic crude oil and refine it into globally priced gasoline, diesel and other products.
That’s led to high profits for refiners but little relief for consumers.
“When it comes to gasoline, we are part of a global market,” Yergin said. “Gasoline prices in the U.S. derive from global oil prices, not U.S. prices.”
To lower gasoline prices, Yergin said, the U.S. should eliminate the export ban. More oil in international markets would depress prices worldwide, he said.
The issue is a sensitive one in Congress. Opponents of lifting the ban say it would raise U.S. gasoline prices by raising U.S. oil prices. Arguing the opposite seems “counterintuitive,” said IHS Energy vice president Kurt Barrow.
Crude oil prices in the global market are pegged to North Sea Brent, which was selling for $110.02 a barrel Wednesday. West Texas Intermediate, the mark for U.S. crude oil prices, was selling for $104.11. U.S. prices have been below the global price since U.S. production began to surge in the last five years.
Despite the ban on crude oil exports, U.S. refiners have been able to export oil products for many years. U.S. refiners exported about 3 million barrels a day of gasoline and other oil products last year to Latin America, Europe and elsewhere.
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