Baker Institute’s Medlock available to discuss impact of crude-oil exports

EXPERT ALERT

David Ruth
713-348-6327
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Jeff Falk
713-348-6775
jfalk@rice.edu  

Baker Institute’s Medlock available to discuss impact of crude-oil exports
Medlock: Removing ban would not increase the price of gasoline in the US

HOUSTON – (Dec. 18, 2015) – Next week, President Barack Obama is expected to sign a bill to lift the 40-year-old ban on U.S. oil exports, changing the dynamic of U.S. producers in the world energy market. Kenneth Medlock, senior director of the Center for Energy Studies at Rice University’s Baker Institute for Public Policy, is available to discuss the local and global impacts of this development with media.

KENNETH MEDLOCK

Earlier this year, Medlock authored a comprehensive study, “To Lift or Not to Lift? The U.S. Crude-Oil Export Ban: Implications for Price and Energy Security,” which analyzed the economic and energy security impacts of the oil export ban that was put in place in 1975. The study found that lifting the ban would level the playing field for the U.S. as it has faced discounted domestic crude-oil prices relative to internationally traded crudes (Brent, for example) due to the oil export ban. In fact, the study shows that because the majority of light tight oil produced from U.S. shale formations is of higher quality than both West Texas Intermediate (WTI) and Brent crude oil, if it were exported it would fetch higher prices than WTI and Brent in the international market.

“Some have argued that crude-oil exports would increase gasoline prices in the U.S.,” Medlock said. “However, because refined products, such as gasoline, can be freely exported, the prices of refined products sold in the U.S. are in parity with international refined product prices. Thus, the discounted prices of oil produced in the U.S. are not reflected in U.S. gasoline and refined product prices. Removing the crude export ban, although it would raise the price of crude oil domestically, would not increase the price of gasoline in the U.S.

“Counterintuitive to some, removing the ban generates distinct energy security benefits. Diversification of oil supply options, especially by adding supply from stable producing countries such as the U.S., is one means of mitigating the risk of an oil market disruption. To this end, the U.S. shale-oil boom has already provided significant energy security benefits. From 2008 to 2013, increased oil output from the U.S. has offset the production declines in countries such as Libya, Algeria, Syria and Iran that were due to local strife or sanctions. The importance of U.S. oil exports as a potential source of incremental supply over the longer term cannot be overstated.”

To schedule an interview with Medlock, contact Jeff Falk, associate director of national media relations at Rice, at jfalk@rice.edu or 713-348-6775.

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Related materials:

Medlock bio: http://bakerinstitute.org/experts/kenneth-b-medlock-iii.

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Founded in 1993, Rice University’s Baker Institute ranks among the top 10 university-affiliated think tanks in the world. As a premier nonpartisan think tank, the institute conducts research on domestic and foreign policy issues with the goal of bridging the gap between the theory and practice of public policy. The institute’s strong track record of achievement reflects the work of its endowed fellows, Rice University faculty scholars and staff, coupled with its outreach to the Rice student body through fellow-taught classes — including a public policy course — and student leadership and internship programs. Learn more about the institute at www.bakerinstitute.org or on the institute’s blog, http://blogs.chron.com/bakerblog.