With U.S. Oil Supply Climbing, Some Call For End To Export Ban
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The U.S. is in the middle of an oil-drilling boom that has some rethinking the country's four-decade ban on exporting crude oil. In fact now a campaign is underway to lift the ban. But as NPR's Jeff Brady reports, backers must first win over a skeptical public.
JEFF BRADY, BYLINE: The ban on exporting oil produced in the U.S. dates back to 1973.
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JOHN CHANCELLOR: This is "NBC Nightly News," Wednesday October 17.
BRADY: Anchor John Chancellor told Americans that Arab countries, upset over U.S. support for Israel, were using their oil as a political tool.
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CHANCELLOR: They will reduce oil production by 5 percent a month until the Israelis withdraw from occupied territories.
BRADY: The Arab oil embargo lasted five months. Crude prices quadrupled. There was rationing and long lines at gas stations. In response, the U.S. banned oil exports as part of a plan to insulate the country against supply and price shocks. Jake Dweck began practicing as an energy lawyer in Washington, D.C. around this time. Four decades later, he's part of a campaign to lift the export ban.
JAKE DWECK: Over the past six years or so, we've lived through a phenomenal oil revolution that has made the U.S. the number-one oil producer in the world.
BRADY: That revolution was made possible by technologies like hydraulic fracturing, and it was unexpected. Refinery owners thought they'd be handling heavier oil that comes from other countries, not the light, sweet crude produced here. Dweck says if too much of the lighter U.S. oil stays in the country, prices will drop, and that could slow down the current boom.
DWECK: And the results would be reduced production, possibly shutting productions over time and reduced economic activity for the U.S. economy as a whole.
BRADY: At a gas station in Philadelphia, Stephanie Torain says she remembers the 1973 oil embargo. She understands Dweck's argument but is skeptical that lifting the ban is a good idea.
STEPHANIE TORAIN: Well, if it's going to help the economy, yes, and if it's not going to benefit us, no. But I don't want us to sell all our oil so in the future we won't have none when our children get old.
BRADY: Torain says she's concerned exporting U.S. oil would raise gasoline prices, but backers of lifting the ban say opening new markets would prompt the industry to drill for even more crude here. They argue it would actually decrease gasoline prices in the U.S. Nearby, Desmond Ward is filling up his SUV and says he's willing to hear out the industry's arguments.
DESMOND WARD: If they can actually prove that it's not going to affect us over here, then I'm for it.
BRADY: There's plenty of opposition, including the refineries that can handle the lighter crude oil produced here. Jeffrey Peck is a lobbyist representing four such refineries. He says having plenty of supply in the U.S. helps the country. Take the situation now, with turmoil in several oil-producing countries, prices are actually going down.
JEFFREY PECK: There is one reason, one reason only, that consumers are not paying $5 and $6 a gallon of gas at the pump, and that's because of the oil being produced in the United States.
BRADY: President Obama could end the export ban with an executive order. His former chief economic advisor, Larry Summers, says if Congress won't do it, then the president should. The White House says there's no change in policy yet. Also opposing the effort to lift the export ban are some environmental groups. Lorne Stockman is with Oil Change International, and he's concerned that ending the ban would lead to more drilling.
LORNE STOCKMAN: We really need to address climate change and actually start to think about which reserves, which fossil fuel reserves we're going to leave in the ground.
BRADY: At stake in the export issue are billions of dollars in profits and whatever the White House decides could determine winners and losers. The campaigns are just starting, and you can expect much more in the months to come. Jeff Brady, NPR News.
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