November 23, 2020

New GAO Report Requested by Markey Finds Lifting Oil Export Ban Results in Higher Costs for American Consumers, No Reduction in Foreign Oil Dependency

Government report requested by Senators Markey and Carper also highlights how lifting ban led to decreased profits for smaller refiners, declines for U.S. shipping industry

Washington (November 23, 2020) – Senator Edward J. Markey (D-Mass.), member of the Environment and Public Works Committee, today released the following statement after the Government Accountability Office (GAO) released the new report “Crude Oil Markets: Effects of the Repeal of the Crude Oil Export Ban,” which revealed that the repeal of the crude oil export ban increased U.S. crude exports—while imports remained largely unchanged—and resulted in higher oil costs. In 2015, Congress passed the 2016 Consolidated Appropriations Act, which repealed the crude oil export ban and allowed for the free marketing and sale of U.S. crude oil on the global market. As a result, record-breaking amounts of U.S. oil have gone to foreign nations without lowering prices for American consumers, lowering American dependence on foreign fuels, or lowering the national impact on the climate crisis. Senator Markey and Senator Tom Carper (D-Del.), Ranking Member on the Environment and Public Works Committee, originally requested the report in May 2018.

In 2016, after the ban was lifted, Senator Markey said: “Exporting American crude oil could be a disaster for independent refineries in regions such as the East Coast. It could raise prices for consumers who are currently saving $700 a year at the pump and $500 on heating oil this winter because of low oil prices. And it could harm U.S. shipbuilders who are experiencing a shipbuilding renaissance in this country.”

“This new report confirms what I’ve said all along: repealing the crude oil export ban benefits Big Oil at the expense of the American consumer and the climate,” said Senator Markey. “Lifting the export ban did nothing to cut our national dependence on foreign oil and pulls the curtain back on the fossil fuel industry’s empty sales pitch of American energy independence. Armed with this information, it’s time we reinstate the crude oil export ban and transition toward a clean energy economy that will free us from our fossil fuel addiction.”

A copy of the GAO report can be found HERE.

Key findings from the report include:

After the repeal of the ban, the market for U.S. producers expanded, allowing for an increase in exports from 465,000 barrels per day to ten countries in 2015 to almost three million barrels per day to 43 countries in 2019.
According to data, total production of U.S. crude oil rose by roughly one-third, from approximately 9.3 million barrels per day just before the repeal of the ban in December 2015 to approximately 12.8 million barrels per day in December 2019.
Prior to the repeal of the export ban, U.S. imports of crude oil were trending down, from about 9.2 million barrels per day in 2010 to about 7.4 million barrels per day in 2015. After the repeal of the ban, U.S. imports of crude oil increased for 2 years—from about 7.4 million barrels per day in 2015 to about 8 million barrels per day in 2017—before decreasing again in 2018 and 2019.
Imports of foreign crude oil to the East Coast rose by 35 percent in 2016, likely to replace the decline in shipments of domestic crude oil from the Gulf Coast.
Shipments of U.S. crude oil by Jones Act tankers and barges from the Gulf Coast to the East Coast fell by 57 percent in 2016. At the same time, imports of foreign crude oil to the East Coast rose by 35 percent in 2016, likely to replace the decline in shipments of domestic crude oil from the Gulf Coast. Taken together, these two factors led to a decline in the demand for Jones Act tankers to transport U.S. crude oil from points within the United States in the years after the repeal of the ban.

In 2019, Senators Markey, Ron Wyden (D-Ore.), and Jeff Merkley (D-Ore.) reintroduced legislation to reinstate the ban on sending American crude abroad. The Block All New (BAN) Oil Exports Act would amend the Energy Policy and Conservation Act to reinstate the ban on the export of crude oil and natural gas produced in the United States.