U.S. Oil Exports Would Worsen Global Warming, Government Auditors Say

Looked at from the vantage point of the climate crisis, GAO report discussing several benefits of lifting the oil export ban is more disturbing.

Picture of refinery at dawn/Credit: Greg Euloth

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Allowing United States oil producers to export crude would not only sway markets at home and abroad, it would also worsen global warming and present other environmental risks, the Government Accountability Office said in a new survey of experts.

“Additional crude oil production may pose risks to the quality and quantity of surface groundwater sources; increase greenhouse gas and other emissions; and increase the risk of spills,” said the report.

That finding dampened what otherwise read as a win-win conclusion—that oil producers would get higher prices, production would rise and consumers would pay less at the pump if exports were allowed.

With U.S. production booming, world oil prices have already been dropping, as has the price received by domestic producers. On the global market, the new supplies would help keep world crude prices down. In turn, that would push down world prices for gasoline, and American drivers would see fuel prices decline too, since gasoline sold here typically tracks the global gas price.

But lifting the export restrictions on unrefined oil would narrow the price differential between international and domestic crude (which is discounted here because domestic oil is landlocked). So American producers could get higher prices overall, and therefore they would increase production even more than they already have, the report said.

Senator Lisa Murkowski, the Republican from Alaska who ordered up the study and released it on October 20, said it bodes well for economic growth and called it “a welcome addition to the growing body of analysis supporting the case for greater oil exports.”

But looked at from the vantage point of the climate crisis, the report’s findings are more disturbing.

Lower consumer prices for gasoline might make Americans buy fewer electric, hybrid or other fuel-efficient cars, and that would mean higher tailpipe emissions of greenhouse gases. Ditto lower crude oil prices worldwide: They discourage conservation.

The increased drilling, meanwhile, comes with its own greenhouse gas penalty, from the flaring of natural gas in the oilfields and other leakage of pollutants. And shunting domestically produced light oil off to refineries abroad discourages U.S. refineries from switching to refining cleaner, lighter homegrown crude, instead of importing Canadian tar sands and other dirtier foreign crude. That, again, worsens the carbon footprint of the U.S. refinery sector.

“Increased crude oil production may increase greenhouse gases and other air emissions because the use of consumer fuels would increase, and also because the crude oil process often involves the direct release of pollutants into the atmosphere,” the report said.

One study it cited by Resources for the Future estimated that removing export restrictions would increase carbon dioxide emissions worldwide by almost 22 million metric tons a year. Another, by NERA Economic Consulting, put the figure lower at 12 million tons (and called it an extraordinarily costly means of addressing the problem).

Those figures may seem small in comparison to last year’s emissions of 5.4 billion tons from American energy consumption, but they are not trivial, roughly equivalent to the carbon footprint of 1 or 2 million typical homes.

And the GAO did not discuss another implication of lifting the export ban. While different studies vary widely over how much extra oil would be produced—NERA says there would be an additional 3.3 million barrels a day for the next 20 years—there seems to be no question that production would go up, without any limit. So even if the United States made astonishing strides in cutting its consumption of petroleum, the oil industry could go on producing and exporting crude and refined oil to its heart’s content.

From a global warming standpoint, this means following the business-as-usual pathway toward busting the world’s carbon budget. And it means disregarding the imperative expressed in the latest consensus recommendations of the international science establishment: to reduce global emissions sharply while leaving most fossil fuel reserves in the ground.