RPT-U.S. energy security, prices at risk from crude oil exports-report

Tue Jan 28, 2014 3:31pm EST

By Valerie Volcovici
    WASHINGTON, Jan 28 (Reuters) - Lifting a decades-old ban on
the export of most U.S. crude oil would raise domestic gasoline
prices and squander the United States' new-found energy
security, according to an analysis published Tuesday by a group
with close ties to the Obama administration.
    The Center for American Progress, a Washington think tank 
founded by John Podesta, who is now a senior adviser to
President Barack Obama, issued a policy brief ahead of the
Senate energy committee hearing on Thursday.
    Daniel Weiss, CAP's director of climate strategy, will be
among those testifying at the panel, the first by Congress to
debate the pros and cons of updating restrictions on crude oil
that have been largely unchanged since the 1970s.
    Oil producers and groups like the U.S. Chamber of Commerce
are agitating for change, arguing that domestic refineries built
for handling heavier types of imported crude oil cannot handle
the growing glut of light, sweet crude oil from the domestic
shale boom in the Bakken region of North Dakota. 
    U.S. Energy Secretary Ernest Moniz raised eyebrows last
month when he said this and other energy policies, crafted
during an era of scarcity, should be revisited.
    Weiss, a co-author of the CAP brief, argued that Obama
should retain the sweeping ban on exports in order to keep
protect consumers at the gasoline pump, who have benefited from
"enhanced gasoline price stability."
    "The lower domestic price for oil benefits families,
businesses, and the overall economy," the brief said.
    CAP's analysis said lifting the ban would result in higher
gasoline prices for U.S. consumers. It pointed to the example of
West Coast gasoline prices, which jumped as a result of the 1996
lifting of the ban on crude oil from Alaska, which supplied most
of the region's supply.
    Citing a 2006 report by the Congressional Research Service,
the CAP said that prior to 1996 West Coast gasoline prices were
only five cents per gallon higher than the national average. By
1999, that differential rose to 15 cents per gallon.
    After Alaska crude exports ceased in the early 2000s, the
differential between West Coast gasoline prices and national
prices narrowed again.
    "This experience suggests that lifting the crude oil export
ban could similarly raise gasoline prices because 68 percent of
the price of a gallon of gasoline is the price of oil," the CAP
report said.  
    "Additionally, domestic oil exported overseas would be
replaced by more-expensive imported oil, which could then be
reflected in higher gasoline prices."
    CAP also said easing or removing crude oil export
restrictions could jeopardize the relative energy security that
has resulted from rising production in the United States. 
    According to the Energy
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