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4 年前
COLUMN-U.S. motorists do not gain from oil export ban: Kemp
2014年1月10日 / 下午2点32分 / 4 年前

COLUMN-U.S. motorists do not gain from oil export ban: Kemp

By John Kemp
    LONDON, Jan 10 (Reuters) - The prospect of lifting the ban
on U.S. crude oil exports has drawn strong opposition from some
refiners and politicians in Washington, who claim it would raise
pump prices for American motorists.
    But there is no evidence that lifting the ban would have an
adverse effect on drivers, and it could actually lower pump
prices and make them more stable.
    According to Senator Lisa Murkowski, the highest-ranking
Republican on the Senate Energy and Natural Resources Committee:
"Opponents will be quick to assert, too often without citing any
evidence, that exports of crude oil will raise gasoline prices
for American consumers." 
    "This claim is wrong, but it must be dealt with immediately,
and it must be dealt with head-on," she added, in a thoughtful
and well argued speech on Tuesday calling for an overhaul of
outdated export regulations.
    Valero, the largest independent refiner in the United
States, says, "It makes more sense to keep crude oil here in the
    The current system of export controls is "working well",
according to Valero. 
    "It has significantly reduced American dependence on foreign
oil, kept U.S. refining utilisation high, and insulated American
consumers from geopolitical shocks," it added. 
    Refiner PBF Energy is trying to rally rivals to form
a lobbying group to maintain the ban and held a conference call
with some of them on Wednesday. 
    The impact on U.S. consumers of maintaining or lifting the
ban is essentially an empirical question.
    It is worth considering each of the three arguments Valero
makes for preserving the ban to see if they make sense.
    First, Valero claims the ban has "significantly reduced
American dependence on foreign oil". But the ban has nothing to
do with falling oil imports.
    Domestic production has soared to its highest level since
the 1970s because of horizontal drilling and hydraulic
fracturing. Domestic consumption of gasoline has fallen owing to
a combination of biofuels and tougher mileage standards for cars
and trucks. None of this has anything to do with the export ban.
    Second, Valero claims the ban "kept U.S. refining
utilisation high". This is true. Access to domestic crude below
global prices has thrown a lifeline to U.S. refineries,
especially the relatively unsophisticated ones on the East
Coast, averting the threat of closure and supporting jobs.
    But the thousands of jobs saved at East Coast refineries
must be weighed against the tens of thousands that have been
created in oil and gas production as a result of the shale boom
and the potential for creating even more if exports are
    Reserving U.S.-produced crude and condensates for U.S.
refiners is effectively a subsidy to refiners paid for by oil
producers and people with mineral rights. It is not clear
whether this means a net gain for the U.S. economy as a whole.
In fact, trade theory strongly suggests it would be more
efficient to allow the crude to be exported.
    Finally, Valero claims the ban has "insulated American
consumers from geopolitical shocks". This is clearly wrong.
    While the crude market is segmented by the export ban,
leading to different prices for domestic and foreign oil, there
are no restrictions on the export of refined products such as
gasoline, which therefore trade in an integrated global market.
    U.S. pump prices track international gasoline prices, which
in turn track the price of benchmarks such as Brent, rather than
domestic oil markers such as West Texas Intermediate (WTI).
    The correlations in Tables 1 and 2 show that the change in
weekly pump prices is much more closely linked with Brent than
    Weekly crude oil and gasoline prices, first differences
 Table 1: Correlations 2009-2013
 On-road gasoline prices   WTI         Brent
 U.S.                      0.15        0.27
 PADD 1                    0.10        0.20
 PADD 2                    0.23        0.35
 PADD 3                    0.14        0.26
 PADD 4                    (0.02)      0.06
 PADD 5                    0.02        0.08
 Chicago                   0.23        0.32
 Table 2: Correlations 2011-2013 
 On-road gasoline prices   WTI         Brent
 U.S.                      0.33        0.39
 PADD 1                    0.31        0.36
 PADD 2                    0.35        0.40
 PADD 3                    0.31        0.36
 PADD 4                    0.05        0.10
 PADD 5                    0.14        0.18
 Chicago                   0.29        0.35
    Even in the Midwest - known in the industry as Petroleum
Administration for Defense District (PADD) 2 - and the city of
Chicago, which are far from the coast, pump prices track Brent
more closely than WTI.
    In fact, pump prices track Brent more closely than WTI in
every part of the United States from the East Coast (PADD 1), 
Gulf Coast (PADD 3) and West Coast (PADD 5) to geographically
remote markets in the Rockies (PADD 4).
    Pump prices continued to track Brent more closely than WTI
even when the two started to diverge in 2011. There is no
evidence the fall in WTI prices relative to Brent has been
reflected in lower prices for U.S. motorists.
    Pump prices, in both absolute terms and weekly changes,
continued to track Brent, as the correlations in Tables 3 and 4
    Weekly crude oil and gasoline prices, outright levels
    Table 3: Correlations 2009-2013
 On-road gasoline prices   WTI         Brent
 U.S.                      0.90        0.96
 PADD 1                    0.90        0.97
 PADD 2                    0.89        0.95
 PADD 3                    0.90        0.96
 PADD 4                    0.85        0.90
 PADD 5                    0.88        0.94
 Chicago                   0.87        0.92
    Table 4: Correlations 2011-2013
 On-road gasoline prices   WTI         Brent
 U.S.                      0.34        0.58
 PADD 1                    0.36        0.68
 PADD 2                    0.32        0.49
 PADD 3                    0.39        0.64
 PADD 4                    0.09        0.16
 PADD 5                    0.26        0.45
 Chicago                   0.31        0.40
    Lower prices for domestically produced crude have
represented a financial transfer from domestic oil producers to
refiners rather than to motorists.
    Nor has the export ban insulated U.S. consumers from turmoil
abroad. Pump prices have been hit by instability in the Middle
East through the link between domestic and foreign gasoline
    U.S. crude oil exports might actually bring more stability
and possibly even lower gasoline prices to both American and
foreign motorists.
    International crude prices are currently set by markers such
as Brent that have limited underlying physical liquidity.
    Permitting the export of U.S. shale oil, much of which is
light and sweet, would substantially deepen the pool of oil that
is deliverable into these markets, contributing to greater
liquidity and stability.
    By lessening dependence on producers in unstable areas such
as the Middle East and Africa, increased U.S. oil production and
exports would reduce fears about supply interruptions and reduce
risk premiums.
    Cheaper shale production would edge out high-cost deep
offshore projects and expensive oil production in the Middle
East, Africa and Central Asia.
    For all these reasons, allowing exports could actually
reduce gasoline prices and make them more stable.
    It was this point that was first made by researchers at
Citigroup last year and that was taken up by Senator Murkowski
on Tuesday.
    "Lifting the prohibition on crude oil exports will serve to
increase domestic oil production, and the entry of this oil onto
global markets will put downward pressure on international
prices," Murkowski noted. "All things equal, this combination
will help the American consumer."
    The export ban clearly favours independent refiners that
don't have their own oil production, especially the smaller and
older refineries on the East Coast. 
    But there is no evidence whatsoever that it lowers prices
for U.S. motorists.

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