Gov. John Hickenlooper is throwing his support behind a national call to allow the export of crude oil produced in the U.S.
Exports of domestic crude have been banned since the OPEC oil embargo in 1975.
Hickenlooper sent a letter Thursday to U.S. Commerce Secretary Penny Pritzker, saying the ban should be lifted.
His support makes him one of the highest-profile Democrats to advocate on the issue, which so far has been supported mostly by Republicans.
In the letter to Pritzker, Hickenlooper said that “ending the outdated and counterproductive ban on crude oil exports is the next logical step to ensuring that domestic producers continue to invest and that energy consumers benefit.
“We respectfully request your support and that of the broader (Obama) Administration for full legislative repeal of the crude oil export ban,” Hickenlooper wrote.
A key issue is what would happen to oil and gasoline prices. After dipping to a six-year low in January, gas prices are on the rise.
Supporters of lifting the ban argue that since oil is a global commodity, bringing U.S. crude into the international market would boost world supplies and bring down prices.
“We have a resource here that the world needs,” said Stan Dempsey, president of the Colorado Petroleum Association. “We’ve got a glut right now. It doesn’t seem that (lifting the export ban) would create an undersupply picture.”
Colorado was the nation’s sixth-largest oil producer in 2014 with an average daily production of 238,000 barrels, according to the U.S. Energy Information Administration. The Brookings Institution said ending the ban would boost wages and employment in the U.S., and also projected it would increase the gross domestic product by $550 billion on the low end and $1.8 trillion on the high by 2039.
“Our analysis demonstrates that lifting the ban will increase U.S. oil production, diversify global supply, reduce U.S. gasoline prices and provide net benefits to the U.S. economy,” Brookings senior fellow Charles Ebinger said in a report last fall.
But the Crude Coalition, a group of U.S. independent oil refiners, maintains that consumers would be hurt if domestic crude exports were allowed.
“We believe that if the ban is lifted, gasoline prices will go up for American consumers,” said Jay Hauck, the coalition’s executive director. “We still import 7 million barrels a day of crude oil, half of it from OPEC countries. Lifting the ban only puts more power in the hands of OPEC.”
Hauck termed as “false” the supporters’ argument that U.S. oil exports would bring down global prices for crude. Instead of international prices going down to match lower domestic prices, he said, the U.S. benchmark price of West Texas Intermediate crude would likely rise to the level of the more-expensive international Brent crude index. U.S. crude dropped 48 cents Friday to $59.15 a barrel. Brent fell 32 cents to $66.46 a barrel.
Public support for lifting the ban is beginning to grow. A Reuters-Ipsos poll in January showed that 45 percent of U.S. voters agreed that oil producers should be allowed to export domestic crude abroad; just over 30 percent disagreed. An earlier poll in September had showed supporters and opponents evenly split.
But voter support weakens when the prospect of higher gasoline prices is considered. According to the survey, only 22 percent would support lifting the export ban if it meant that gas prices would rise.
Steve Raabe: 303-954-1948, sraabe@denverpost.com or twitter.com/steveraabedp
