WASHINGTON, Dec. 12 (UPI) -- It may be premature to ease restrictions on U.S. crude oil exports despite early indications of economic benefits, analysts told lawmakers on Capitol Hill.
The House Energy and Commerce Committee heard testimony Thursday on the validity of restrictions on U.S. crude oil exports at a time when production, largely from shale, is at 40-year highs. With U.S. oil production eclipsing 9 million barrels per day, those in the exploration and production sector say the time is ripe to consider repealing a 1970s-era ban on crude oil exports.
Studies conducted by the Brookings Institution, IHS Energy, the Dallas Federal Reserve Bank, and the U.S. Government Accountability Office found there would be consumer benefits, like low gasoline prices, from easing the restrictions, though each found lifting the ban did little to eliminate foreign dependency.
Deborah Gordon, director of energy programs at the Carnegie Endowment for International Peace, testified there were too many uncertainties in the global marketplace as well as the U.S. crude oil industry to rush ahead with new export policies.
With Asian economies slowing down, the appetite for U.S. oil may be dwindling, she said. Furthermore, the shale boom is still a relatively new phenomenon.
"Ironically, there is more detailed open data available about OPEC crudes than those oils in the Bakken, Permian, or Eagle Ford basins," she testified.
Charles Ebinger, a senior energy fellow at Brookings, testified there were indeed economic benefits that would come from easing the ban. But Lucian Pugliaresi, president of the Energy Policy Research Foundation, said there may be unintended consequences.
"Often these policies, in an attempt to either promote the development of alternatives to petroleum or to insulate consumers form price volatility, prevented more productive responses from both consumers and producers," he testified.
Some companies operating in U.S. shale basins have exported an ultra-light form of oil dubbed condensate, which may be classified as a petroleum product and not crude oil under existing rules.
Rep. Ed Whitfield, R-Ky., chairman of the subcommittee on energy and power, said in his opening remarks shale oil reserves are producing a product that many refineries in the United States aren't set up to process.
"This light oil is better suited to many foreign refineries, and for that reason there is a strong demand for American oil around the world," he said.
Crude oil exports are restricted under legislation enacted in response to the oil embargo from Arab members of the Organization of Petroleum Exporting Countries in the 1970s.