June 10, 2015 / 2:01 PM / 4 years ago

U.S. should ditch 'outdated' oil export ban -Harvard

By Richard Valdmanis
    BOSTON, June 10 (Reuters) - The United States must lift an
"outdated" ban on oil exports to take full economic and
geopolitical advantage of its hydraulic fracturing boom,
according to a Harvard Business School study released on
Wednesday.
    Lifting the 40 year-old ban imposed after the Arab oil
embargo and easing restrictions on liquefied natural gas export
terminals would add $23 billion to the economy by 2030, create
tens of thousands of jobs, and provide the United States with
additional clout overseas, the paper said.
    "Our energy resources have given the U.S. important new
diplomatic tools that can aid allies and counteract the ability
of unfriendly countries to use oil and gas access to achieve
political aims," according to the research authored by three
Harvard Business School professors in conjunction with the
Boston Consulting Group. 
    "Today, the ban on crude exports ... is reducing market
opportunities for producers and reducing U.S. growth, with no
clear offsetting benefits for America or Americans," said the
study, which outlined several steps the country should take to
fully benefit from the fracking boom.
    The call comes during intensifying debate in Washington on
whether to reverse the oil export ban after Republicans
introduced bills in both the House and the Senate in recent
months. Oil producers eager to ship to markets in Asia and
Europe say the ban has led to a glut of U.S. sweet crude that
could eventually choke the domestic drilling boom. Some
Democrats have been cool to the idea, citing concerns that
exports would raise domestic energy prices.
    The rise of fracking technology, which involves pumping
water, sand and chemicals into a well to extract oil or gas, has
helped lift U.S. production of natural gas by 35 percent since
2005 and oil by 45 percent since 2010.
    The Harvard paper said fracking now contributes about $430
billion to annual U.S. gross domestic product and supports more
than 2.7 million jobs. It called the industry "perhaps the
largest single opportunity to change America's competitiveness."
    It said, however, that the oil industry and regulators
needed to work hard to counter weak public support for fracking,
mainly by addressing concerns about potential air and water
pollution, and the practice's links to earthquakes. 
    A report by the U.S. Environmental Protection Agency this
month said fracking had not led to widespread pollution of
drinking water, but it added that some drilling activities could
cause health risks.
   

 (Editing by Lisa Von Ahn)
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