Oil producers are pressing President Obama to use his executive authority to lift the 40-year-old ban on crude oil exports, which would not require the approval of Congress.
Barry Russell, president and CEO of the Independent Petroleum Association of America, sent a letter to the president on Tuesday asking him to adjust the export control measure and open up a new global market for U.S. crude oil.
"To continue growing as an energy superpower, America must have policies that reflect modern energy markets, rather than policies based on a market that existed in the 1970s," Russell said. "Current law provides authority to the administration to approve oil exports without requiring any action from Congress."
The U.S. in a matter of a few years has become a major producer of oil derived from shale. The production comes from the use of hydraulic fracturing, or fracking, which uses a combination of sand, water and horizontal drilling techniques to force oil and natural gas from tight shale formations deep underground.
The production of oil from the formations has reduced the nation's demand for oil imports, and the energy industry believes enough shale oil exists in the U.S. to justify exporting it.
"By lifting the outdated exports ban, the United States would see more good-paying American jobs, reduced pressure on gasoline prices, increased investment in free trade, economic growth and a diminished need for imported foreign oil from volatile regions of the world, all while reducing the national trade deficit," Russell said.
In the letter, he says the administration has taken important steps toward removing the export ban and should build on those.
He points out that the Commerce Department's decision in recent years to allow the export of natural gas liquids, known as condensates, was a positive step toward lifting the ban on crude oil.
Russell says a similar step for crude oil could be taken without the need for Congress to get involved. He also said there could be export exemptions employed when shipping crude oil to U.S. allies.
"For example, granting exemptions for American allies would not only beneficially serve the national interest, it would also be consistent with the administration's broad free-trade agenda," Russell said. "More broadly, as the administration did by taking action regarding condensates, [the association] urges it to give impartial consideration to the economic and consumer benefits that could result in completely lifting the restrictions on U.S. crude oil exports as wholly in America's national interest."
Nevertheless, Congress stands ready to pass legislation to remove the ban, as the House Energy and Commerce Committee is holding a hearing Thursday on the issue. Although there is support for the measure, observers say many lawmakers still fear that lifting the ban could result in higher fuel prices at home.
Russell notes those fears in the letter, pointing out that several government and independent studies have shown that allowing oil exports would actually drive down fuel prices at home.
"Much of the concern about lifting the crude oil exports ban surrounds the impact it might have on American consumers and U.S. gasoline prices," he says. But a number of studies, including one by the Government Accountability Office, show that "repealing the crude oil export ban will benefit American consumers by putting downward pressure on gasoline prices."
The Brookings Institution, a nonpartisan think tank, said exporting crude "will make global oil prices fall" by injecting more supply into the commodity markets. "This will help lower gasoline prices in the United States," Russell said.
Texas congressmen Joe Barton, a Republican, and Henry Cuellar, a Democrat, in an op-ed published Monday in Roll Call, made a bipartisan pitch for removing the decades-old ban ahead of Thursday's hearing. "The advantages of lifting the ban on crude oil exports are not just theoretical talking points discussed in the halls of Congress, but rather supported by a large and growing body of research," they wrote.