Barry DuVal, president and CEO of the Virginia Chamber of Commerce, says it’s time for the U.S. to scrap its 40-year-old ban on exporting domestic oil.
"We’re the only major oil-producing nation in the world with a self-imposed ban on exporting our crude oil to other nations," DuVal said in an Aug. 25 radio interview on "The John Fredericks Show," a Hampton Roads-based broadcast.
We wondered whether DuVal was correct. Chamber spokesman Paul Logan backed the statement by pointing us to an Aug. 11 editorial in the Richmond Times-Dispatch that made a similar statement. Logan provided no other materials, so we did some digging on our own.
The export ban
The U.S. put the ban in place in 1975, two years after an embargo by the Organization of Arab Petroleum Exporting Countries halted crude oil deliveries to the United States. Adam Sieminski, administrator of the Energy Information Administration, told Congress last December that the embargo seriously curtailed U.S. oil imports and highlighted U.S. dependence on foreign oil.
The export ban covers the vast majority of crude oil produced in the U.S. -- but it’s not an absolute prohibition. For example, it doesn’t bar crude exports to Canada as long as the oil is used in that country. There are other exemptions as well. Some heavy crude produced in California, for example, is not subject to the ban, according to the U.S. Bureau of Security and Industry.
The U.S. exported 401,000 barrels of crude oil a day, most of it to Canada, in July 2014, according to the Congressional Research Service. That month, EIA figures show the U.S. produced almost 8.8 million barrels of crude daily.
We should also note that although the ban affects raw crude oil, it does not prohibit export of "refined" petroleum products, such as gasoline.
There have been several unsuccessful congressional attempts to lift the ban in recent years in the wake of rising U.S. oil production. Amid the shale fracking boom, production increased from 5.4 million barrels a day in 2009 to 8.7 million barrels a day last year, according to EIA statistics.
Efforts to lift the ban are ongoing. On Sept. 10, a House Energy and Power subcommittee approved a bill that would end the prohibition.
Is the U.S. ban unique?
EIA officials told us they weren’t aware of any other country with an export ban similar to the U.S. ban. But they stressed they couldn’t provide a definitive answer on whether the U.S. is the only nation among major oil producers that has such a limitation.
So we turned to a couple of energy market analysts for further insight.
Kenneth B. Medlock, senior director at the Center for Energy Studies at Rice University, told us in an email that DuVal’s statement is correct. "The US is the only major producing country that does not allow exports of raw crude oil," he wrote in an email.
Charles Ebinger, a senior fellow at the Energy Security and Climate Initiative at the Brookings Institution, also told us the U.S. is alone among major oil-producing countries in having the export ban.
American Petroleum Institute, which supports scrapping the export ban, released a report this month saying "the U.S. and China are the only major oil producers in the world that don’t export a significant amount of crude."
Ebinger, who also backs lifting the U.S. ban, says China’s tiny export of oil is not caused by a national ban. Instead, the low export is driven by high internal demand for oil within the nation, he said.
DuVal said the U.S. is the only major oil-producing nation in the world that bans export of its crude oil.
Two experts we contacted agreed with DuVal’s statement, and officials at the EIA said they’re not aware of any other country with similar export restrictions. But the ban is not absolute -- a small portion of U.S. crude is exported to Canada.
So we rate his DuVal’s statement Mostly True.