The United States is reaping the benefits of rapidly increasing domestic oil and natural gas production for the first time in decades. The United States produced over 7.5 million barrels of crude per day in 2013 and that number is expected to increase to over 8.3 million in 2014. As of January 23, 2014, the price for West Texas Intermediate crude was slightly under $98 per barrel.
At the same time, imports of crude oil have dropped from about 9 million barrels per day in 2010 to below 7 million barrels per day in January 2014, and the U.S. is expected to rely on foreign imports for a record-low 42 percent of its crude oil use in 2014. Increasing supplies and decreasing imports of crude oil have led government and industry officials and other stakeholders to re-examine the best uses for America's crude oil resources, including the question of exporting domestic crude. Per current regulation, the resumption of crude oil exports is contingent on the Obama Administration making an affirmative determination that such a move is in the public interest.
Key developments on this issue include:
- Energy Secretary Ernest Moniz has stated that the United States may need to re-examine our current policy on crude oil exports, as circumstances have dramatically changed since the ban was imposed.
- Leading industry representatives, including the U.S. Chamber of Commerce and the American Petroleum Institute, have expressed support for lifting the ban.
- The refining industry does not have a unified position on exports but is considering options going forward.
- Increases in production in the lower 48 states (mainly North Dakota and Texas) have raised questions about future prices and future demand for Alaska North Slope Crude.
- Senator Mary Landrieu (D-LA), the incoming chairwoman of the Senate Energy and Natural Resources Committee, is a strong supporter of oil and gas production and has signaled interest in this topic.
- The ranking Republican on the Senate Energy & Natural Resources Committee, Lisa Murkowski of Alaska, has announced her support for lifting the export ban.
- Other members of Congress, including strong supporters of fossil fuel production and those who have supported liquefied natural gas (LNG) exports, have expressed concern about lifting the ban on crude oil exports.
- Congress has announced it will examine and hold hearings on this issue.
As this debate unfolds, the Administration, Congress and industry stakeholders will look at issues such as national security, trade, energy costs, jobs and the President's climate agenda. The Administration will likely establish a complex regulatory process involving numerous agencies and offices, while the final decision will be made at the highest levels of the White House.
Interested parties in Washington, D.C. and across the United States are hard at work formulating their approach to this new public policy issue. Those who want to influence the direction of this debate and process will want to do the same, and soon, if they are to have a seat at the table.