The Domestic Energy Producers Alliance is a nationwide collaboration of 15 coalition associations – from California to West Virginia, Texas to Montana – representing about 10,000 individuals and companies engaged in domestic onshore oil and natural gas exploration and production (E&P). We believe in seeking common ground, and in common sense solutions to the challenges that face us in our businesses, including our relationship with the federal legislative and executive branches of government. In only its fifth year, DEPA now represents a majority of the individuals and companies responsible for the current renaissance in American oil and natural gas production.
Congress must lift the ban on US crude oil exports. The ban is a terrible relic of the Nixon era that harms the American economy. As Sen. Lisa Murkowski (R-AK) has pointed out, restrictions on oil trade effectively amount to domestic sanctions. Combined with a mismatch in refining capacity, the ban on oil exports is creating a significant discount for US light oil at no benefit to anyone except refiners and their foreign ownership. It has cost US states, producers and royalty owners $125 billion in lost revenue in four years, according to industry estimates.
While the SPR is being looked at as an asset to fund critical infrastructure improvements, it must be noted that to gain the most value and to fund as much infrastructure as possible, the sale of these assets will need to occur on the world market. Without crude exports, the sale of SPR, regardless of rate and term, would be detrimental to our domestic production industry by flooding our markets and reducing the price received for all oil sales in the US.
The reality is simple. Consumers and businesses buy refined products, not crude oil. Refineries buy crude oil. The cost savings US refiners gain from buying cheaper, export-restricted domestic crude and selling refined products at the world market price go straight into the pockets of refinery owners. The savings are not passed on to US consumers.