May 24, 2015

Ending U.S. Crude Oil Export Ban Would Create Hundreds Of Thousands Of Jobs Along Energy Supply Chain

Sen. Lisa Murkowski (R-AK) and a group of colleagues recently introduced legislation, S. 1312, the Energy Supply and Distribution Act of 2015, that would end the U.S. ban on crude oil exports. (The ban has been in effect since the 1970s.) Sen. Murkowski said ending the ban would allow the U.S. to “fully harness our resources here at home, level the playing field in the global energy market, and support our energy security by making sure our allies get energy resources from us instead of volatile regions.” 

According to a report highlighted earlier this year by the Energy Equipment and Infrastructure Alliance (EEIA), which MSCI is a member of, lifting the ban would create nearly 440,000 supply chain jobs by 2018. It would also add $64 billion to GDP by the same year. The benefits would continue through at least 2030. The executive summary of the reports says, “Lifting the ban on crude oil exports increases supply chain jobs and economic activity by stimulating capital investment, increasing crude oil production, and lowering gasoline prices. … [T]he positive impact on the crude oil supply chain of lifting the export ban is expected to add $26 billion to $47 billion to GDP and support 124,000 to 240,000 jobs per year on average during the 2016-30 period.” 

The report, conducted by IHS Energy/IHS Economics, shows ending the ban will benefit every state and every congressional district and will even have significant benefits for states where there is little crude oil production. For example, the report found even though there is little energy production in Illinois, the state accounts for about 10 percent of the overall supply chain impact because manufacturers there provide products and services to U.S. energy producers. MSCI members can find detailed summaries of how ending the ban would impact their states and congressional districts at the IHS website

At this time, the Energy Supply and Distribution Act of 2015, which the Senate Energy and Natural Resources Committee could consider this summer, has 13 cosponsors, including one Democrat: Sen. Heidi Heitkamp of North Dakota. 

Legislation to lift the ban has also been introduced in the U.S. House. (See the EEIA’s statement on the House legislation here.) It is unclear if and when the bill will move through that chamber, but MSCI will advocate for quick approval by both the House and Senate when it does.