Oil exports worked for Alaska, and will for the Lower 48

In April 1996 President Bill Clinton ended a 23-year-old ban on exporting Alaska North Slope crude oil that was put in place when the Trans-Alaska Pipeline was built in the 1970s. At the time the ban was enacted, America believed we needed to hoard as much of our petroleum resources as possible. Even as early as 1996, however, it was clear to economists and policymakers that America is more secure and prosperous when we engage in robust energy trade with allies and trading partners.

Three years after Clinton began allowing Alaskan oil exports, the Government Accountability Office issued a comprehensive report examining the effects of removing the ban. Among the findings were that North Slope oil production would increase for years to come: “new oil fields developed in Alaska since the ban was lifted are expected to increase Alaskan North Slope oil production by an average of 115,000 barrels per day for the next two decades.” The report also found that although prices for crude oil paid by West Coast refiners increased by about $1 per barrel, “no observed increases occurred in the prices of three important petroleum products used by consumers on the West Coast – gasoline, diesel, and jet fuel.” In other words, lifting the ban generated greater oil production, while not increasing consumer prices.

{mosads}What was true for Alaska in the 1990s is equally true today for crude oil produced from our country’s prolific shale formations. Removing the United States’ outdated ban on crude oil exports will help grow our economy, lower gasoline prices at the pump, create and protect jobs, and enhance our national security by providing allies with a stable source of energy. The experience of Alaska, and of the primary consumers of its crude oil on the West Coast, is a noteworthy case study for the rest of America.

Data from the United States Energy Information Administration shows that the U.S. has been the largest producer of crude oil in the world since 2013. Every analysis of the impacts of removing the oil export ban shows that allowing trade with international markets will boost our production at home and grow our economy. For example, the Brookings Institution found that removing the ban “will have a positive impact on GDP and welfare” in every case analyzed and if lifted in 2015 will lead to increased production of approximately 1.3 – 2.9 million barrels per day by 2020.

Increased production, more U.S. exports and economic growth all support American jobs. In fact, the Obama administration estimates that every one billion dollars in exports support 5,000 jobs here at home.  That’s why labor unions, like the Laborers’ International Union of North America (LIUNA) and the International Union of Operating Engineers, wrote to Congress this summer to say that “opening global markets to U.S. producers will support added domestic production that will create hundreds of thousands of new jobs and contribute tens of billions of GDP dollars in the supply chain.”

Lifting the export ban would also put downward pressure on domestic gasoline prices. The estimates of such a decrease vary – Columbia University says up to twelve cents per gallon, energy consultancy IHS says eight cents per gallon – but the main finding from dozens of studies is that lifting the ban will help American consumers. This will mean important savings for families driving home for the holidays, small business owners transporting materials to a job site, and anyone who needs a car to make a living.  

During my time in the Senate I fought hard to get our government to take on global climate change and to implement policies that would reduce global greenhouse gas (GHG) emissions. This remains an issue we must address, however maintaining the ban on oil exports, as some environmental groups are advocating, is not an effective policy to curb GHG emissions. Any oil exported from the U.S. would substitute for other sources of production – like Iran and Russia – and not add to global consumption of petroleum, therefore not contributing in any significant way to the global carbon footprint.

In Alaska, I worked with not only the oil industry, but also with environmentalists and Alaska’s Native communities to ensure that we have the best operators and regulatory regime in the world to ensure responsible development. To this point, John P. Holdren, senior advisor to President Obama for science and technology, said recently “if you’re going to be using oil and gas, it’s better to produce it here than somewhere else. We have by far the strongest environmental and safety oversight of any country.”

Alaska’s experience with oil exports should be a model for the nation. We can and should produce and export our petroleum resources responsibly. This will make the country stronger, and put us in a better position to tackle more difficult issues like national security concerns and climate change.

Begich represented Alaska in the Senate from 2009 to 2015. He is now the president and CEO of Northern Compass Group, a consulting firm located in Anchorage, Alaska. He also serves as a strategic adviser to Brownstein Hyatt Farber Schreck.

Tags Bill Clinton

More Energy & Environment at The Hill News

See All
See all Hill.TV See all Video