House E&C Crude Oil Exports Hearing Summary

Executive Summary for the House Subcommittee on Energy and Power Hearing on H.R. 702 – Legislation to Prohibit Restrictions on the Export of Crude Oil

crude oil

July 9, 2015


Mr. Peter Gandalovic (Ambassador to the United States, Czech Republic)

Mr. Mark Kreinbihl (Group President, The Gorman-Rupp Company)

Commander Kirk Lippold (President, Lippold Strategies)

Dr. W. David Montogmery (Senior Vice President, NERA Economic Consulting)


On July 9, 2015, the House Subcommittee on Energy and Power held a hearing on H.R. 702 – a bipartisan bill to lift the export ban on American crude oil. In light of the recent boom in U.S. oil production, many federal lawmakers argue it is time to lift the 1970s-era ban on most exports of American crude oil. Supporters of the bill argue the reasons for the export restrictions are no longer valid. Most significantly, the U.S. has gone from a nation with dwindling petroleum output to the world’s leading producer of liquid hydrocarbons. American production is so robust that the domestic supply of oil is now outstripping demand. This is especially true for the lighter grades of crude oil not suitable for most domestic refiners but very much in demand around the world. Supporters of the bill argue that allowing American companies to serve this global market would provide both substantial economic and geopolitical benefits.

Opponents of the bill argue it is not yet time to lift the ban because the U.S. still relies on oil imports. They believe the reasons for the ban – such as creating U.S. energy independence and protecting the U.S. from state owned OPEC nations – still stand. Rather than hastily lifting the ban, opponents argue the U.S. should wait until it is less dependent on foreign imports.

In his opening remarks, Chairman Whitfield (R-KY) expressed support for H.R. 702. He argued that allowing our allies to import American crude oil rather than crude oil from Russia or OPEC members is in the best interest of U.S. national security. Further, he provided examples of reports from the Government Accountability Office and the Congressional Budget Office that predict oil exports would in fact help lower domestic gas prices.

Mr. Gandalovic discussed the impact the bill would have on European countries, particularly the Czech Republic. While he admittedly could not guarantee that Czech refiners would purchase American crude, he said the mere option to import American crude would send a strong global message that democracies stick together. He also claimed that energy security is a priority for several of the U.S.’s European allies, and energy security means access to global markets that do not view energy as a tool for control.

Dr. Montgomery and Mr. Kreinbihl adamantly supported H.R. 702. Dr. Montgomery discussed the results of a recent study conducted by NERA, which found that across all the scenarios it examined, restrictions on oil exports reduce U.S. GDP, slow down job growth and recovery from the recession, and cause higher gasoline prices. Dr. Kreinbihl provided examples of how lifting the ban would have a substantial positive impact on his company, which manufactures liquid transfer pumps.

Conversely, Commander Lippold opposed lifting the ban because of national security concerns. Through his service in the Navy, he has seen first hand the “devastating effects of relying on foreign oil.” He expressed concern with the amount of foreign oil the U.S. still imports, despite the shale revolution. He also expressed concern with the fact that the U.S. is unable to control where the oil is exported. He feared many of the exports would go to Asia, not to our allies in Europe.

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