Changing Crude Oil Markets: Allowing Exports Could Reduce Consumer Fuel Prices, and the Size of the Strategic Reserves Should Be Reexamined
Published: 2014-09-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Almost 4 decades ago, in response to the Arab oil embargo and recession it triggered, Congress passed legislation restricting crude oil exports and establishing the SPR to release oil to the market during supply disruptions and protect the U.S. economy from damage. After decades of generally falling U.S. crude oil production, technological advances have contributed to increasing U.S. production. Meanwhile, net crude oil imports—imports minus exports—have declined from a peak of about 60 percent of consumption in 2005 to 30 percent in the first 5 months of 2014. According to Energy Information Administration forecasts, net imports are expected to remain well below 2005 levels into the future.
GAO was asked to provide information on the implications of removing crude oil export restrictions. This report examines what is known about (1) price implications of removing crude oil export restrictions; (2) other key potential implications; and (3) implications of recent changes in market conditions on the SPR. GAO reviewed four studies on crude oil exports, including two sponsored by industry, and summarized the literature and views of a nonprobability sample of stakeholders including academic, industry, and other experts.
section_title: What GAO Found
paragraphs: The studies GAO reviewed and stakeholders interviewed suggest that removing crude oil export restrictions is likely to increase domestic crude oil prices but decrease consumer fuel prices. Prices for some U.S. crude oils are lower than international prices—for example, one benchmark U.S. crude oil averaged $101 per barrel in 2014, while a comparable international crude oil averaged $109. Studies estimate that U.S. crude oil prices would increase by about $2 to $8 per barrel—bringing them closer to international prices. At the same time, studies and some stakeholders suggest that U.S. prices for gasoline, diesel, and other consumer fuels follow international prices, so allowing crude oil exports would increase world supplies of crude oil, which is expected to reduce international prices and, subsequently, lower consumer fuel prices. Some stakeholders told GAO that there could be important regional differences in the price implications of removing crude oil export restrictions. Some stakeholders cautioned that estimates of the implications of removing export restrictions are uncertain due to several factors such as the extent of U.S. crude oil production increases, how readily U.S. refiners are able to absorb such increases, and how the global crude oil market responds to increasing U.S. production.
The studies GAO reviewed and stakeholders interviewed generally suggest that removing crude oil export restrictions may also have the following implications:
Crude oil production. Removing export restrictions would increase domestic production—8 million barrels per day in April 2014—because of increasing domestic crude oil prices. Estimates range from an additional 130,000 to 3.3 million barrels per day on average from 2015 through 2035.
Environment. 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 from crude oil transportation.
The economy. Removing export restrictions is expected to increase the size of the economy, with implications for employment, investment, public revenue, and trade. For example, removing restrictions is expected to contribute to further declines in net crude oil imports, reducing the U.S. trade deficit.
Changing market conditions have implications for the size, location, and composition of Department of Energy's (DOE) Strategic Petroleum Reserve (SPR). In particular, increased domestic crude oil production and falling net imports may affect the ideal size of the SPR. Removing export restrictions is expected to contribute to additional decreases in net imports in the future. As a member of the International Energy Agency, the United States is required to maintain public and private reserves of at least 90 days of net imports but, as of May 2014, the SPR held reserves of 106 days—worth about $73 billion—and private industry held reserves of 141 days. DOE has taken some steps to assess the implications of changing market conditions on the location and composition of the SPR but has not recently reexamined its size. GAO has found that agencies should reexamine their programs if conditions change. Without such a reexamination, DOE cannot be assured that the SPR is sized appropriately and risks holding excess crude oil that could be sold to fund other national priorities.
section_title: What GAO Recommends
paragraphs: In view of changing market conditions and in tandem with activities to assess other aspects of the SPR, GAO recommends that the Secretary of Energy reexamine the size of the SPR. In commenting on a draft of this report, DOE concurred with GAO's recommendation.

section_title: Letter
paragraphs: Almost 4 decades ago, Congress passed legislation restricting U.S. crude  oil exports and establishing the Strategic Petroleum Reserve (SPR) in  response to the Arab oil embargo and economic recession it triggered. In  recent years, however, crude oil market conditions have changed,  reversing decades-long trends in declining domestic crude oil production  and increasing crude oil imports. Monthly crude oil production has  increased by almost 68 percent from 2008 through April 2014, and  increases in production in 2012 and 2013 were the largest annual  increases since the beginning of U.S. commercial crude oil production in  1859, according to the Energy Information Administration (EIA). With  growing production, net crude oil imports—imports minus exports—have  declined from a peak of about 60 percent of consumption in 2005 to about  30 percent in the first 5 months of 2014. In response, some members of  Congress proposed legislation to remove crude oil export restrictions,  while others argued that restrictions should remain in place and not be  modified. Recent congressional hearings stressed the need to  understand how changing crude oil export restrictions could affect crude  oil prices and the prices of consumer fuels refined from crude oil, such as  gasoline and diesel.
At the same time, crude oil market changes may have implications for the  SPR, the largest government-held emergency stockpile of crude oil in the  world. The SPR holds 691 million barrels of crude oil in underground salt  caverns along the Gulf Coast in Louisiana and Texas. In the event of a  crude oil supply disruption, the SPR relies on the existing commercial  distribution and refining system to transport and process crude oil into  usable products for sale to the public. Increasing crude oil production,  shrinking crude oil imports, changing crude oil and fuel distribution  patterns, and an evolving U.S. refining industry could have important  implications for the SPR.
You asked us to provide information on the implications of removing  crude oil export restrictions. This report examines what is known about:  (1) the potential effect of removing crude oil export restrictions on prices  of crude oil and consumer fuels; (2) other potential implications of  removing crude oil export restrictions; and (3) implications for the SPR, if  any, from recent changes in crude oil market conditions.
To conduct this work, we reviewed information, including studies by  federal agencies, consultants, and academics, and summarized the  results of interviews from a nonprobability sample of 17 stakeholders. We  identified relevant information by conducting a literature search and  obtaining suggestions from stakeholders we interviewed. We identified  and summarized the results of four recent studies that estimate the  potential implications of removing crude oil export restrictions. Two of  these studies were sponsored by industry and conducted by consultants,  another was sponsored by a research organization and conducted by  consultants, and the fourth was conducted at a research organization. To  assess the reasonableness of these studies, we conducted a high-level  review of the assumptions and methods used, interviewed the studies’  authors, and obtained views of other stakeholders. We determined that  these studies were reasonable for describing what is known about the  range of potential implications but identified several limitations, which we  discuss later in this report. We did not identify any other publicly available  primary studies of the implications of removing crude oil export  restrictions. Stakeholders included representatives of companies and  interest groups with a stake in the outcome of decisions regarding crude  oil export restrictions, as well as academic, industry, and other experts.  We selected stakeholders based on our literature review and  recommendations from agency officials and others. We asked the same  questions during each interview but also discussed individual  stakeholders’ perspectives, as appropriate. We summarized their views,  noting areas of consensus and disagreement. We may not have identified  all stakeholders with a view on this topic, but we sought to balance the  group with the range of perspectives. The views of stakeholders we  selected are not generalizable to all potential stakeholders, but they  provide illustrative examples of the range of views. To assess the  implications of recent trends on the SPR, we interviewed Department of  Energy (DOE) officials and reviewed agency and other documents. Data  in this report are primarily from EIA, the International Energy Agency  (IEA), and Bloomberg. To assess the reliability of these data, we  reviewed relevant documentation, interviewed EIA and Bloomberg  officials, and compared the data with similar data published in other  sources. We determined these data to be sufficiently reliable for the  purposes of this report. Appendix I provides additional information on the  four studies we reviewed, and appendix II lists the stakeholders we  interviewed.
We conducted this performance audit from April 2014 to September 2014  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: This section describes crude oil export restrictions, the SPR, and recent  trends in U.S. crude oil production and the petroleum refining industry.
subsections: section_title: Crude Oil Export Restrictions
paragraphs: The export of domestically produced crude oil has generally been  restricted since the 1970s. In particular, the Energy Policy and  Conservation Act of 1975 (EPCA) led the Department of Commerce’s  Bureau of Industry and Security (BIS) to promulgate regulations which  require crude oil exporters to obtain a license. These regulations provide  that BIS will issue licenses for the following crude oil exports: exports from Alaska’s Cook Inlet, exports to Canada for consumption or use therein, exports in connection with refining or exchange of SPR crude oil, exports of certain California crude oil up to 25,000 barrels per day, exports consistent with certain international energy supply exports consistent with findings made by the President under certain exports of foreign origin crude oil that has not been commingled with  crude oil of U.S. origin.
Other than for these exceptions, BIS considers export license applications  for exchanges involving crude oil on a case-by-case basis, and BIS can  approve them if it determines that the proposed export is consistent with  the national interest and purposes of EPCA. In addition to BIS’s export  controls, other statutes control the export of domestically produced crude  oil depending on where it was produced and how it is transported. In  these cases, BIS can approve exports only if the President makes the  necessary findings under applicable laws. Some of the authorized  exceptions, outlined above, are the result of such Presidential findings.
According to NERA, no other major oil producing country currently  restricts crude oil exports.
BIS approved about 30 to 40 licenses to export domestic crude oil per  year from fiscal years 2008 through 2010. The number of BIS approved  licenses increased to 103 in fiscal year 2013. Meanwhile, crude oil  exports increased from less than 30 thousand barrels per day in 2008 to  396 thousand barrels per day in June 2014—the highest level of exports  since 1957. Nearly all domestic crude oil exports have gone to Canada.
section_title: The SPR
paragraphs: To help protect the U.S. economy from damage caused by crude oil  supply disruptions, Congress authorized the SPR in 1975. The SPR is  owned by the federal government and operated by DOE. The SPR is  authorized to hold up to 1 billion barrels of crude oil and has the capacity  to store 727 million barrels of crude oil in salt caverns located at sites in  Texas and Louisiana. According to DOE, the SPR held crude oil valuded  at almost $73 billion dollars as of May, 2014. From fiscal year 2000  through 2013, the federal government spent about $0.5 billion to  purchase crude oil, and spent $2.5 billion for operations and maintenance  of the reserve.
The United States is a member of the IEA and has agreed, along with 28  other member nations, to maintain reserves of crude oil or petroleum  products equaling 90 days of net imports and to release these reserves  and reduce demand during oil supply disruptions. The 90-day reserve  requirement can be made up of government reserves, such as the SPR,  and inventory reserves held by private industry.
Under conditions prescribed by the Energy Policy and Conservation Act,  as amended, the President and the Secretary of Energy have discretion  to authorize the release of crude oil from the SPR to minimize significant  supply disruptions. In the event of a crude oil supply disruption, the SPR  can supply the market by selling stored crude oil or trading crude oil in  exchange for an equal quantity of crude oil plus an additional amount as a  premium to be returned to the SPR in the future. When crude oil is  released from the SPR, it flows through commercial pipelines or on  waterborne vessels to refineries, where it is converted into gasoline and  other petroleum products, and then transported to distribution centers for  sale to the public.
section_title: Trends in U.S. Crude Oil Production and the Petroleum Refining Industry
paragraphs: Reversing a decades-long decline, U.S. crude oil production has  increased in recent years. According to EIA data, U.S. production of  crude oil reached its highest level in 1970 and generally declined through  2008, reaching a level of almost one-half of its peak. During this time, the  United States increasingly relied on imported crude oil to meet growing  domestic energy needs. However, recent improvements in technologies  have allowed producers to extract crude oil from shale formations that  were previously considered to be inaccessible because traditional  techniques did not yield sufficient amounts for economically viable  production. In particular, the application of horizontal drilling techniques  and hydraulic fracturing—a process that injects a combination of water,  sand, and chemical additives under high pressure to create and maintain  fractures in underground rock formations that allow crude oil and natural  gas to flow—have increased U.S. crude oil and natural gas production.  Monthly domestic crude oil production has increased from an average of  about 5 million barrels per day in 2008 to about 8.4 million barrels per day  in April 2014, an increase of almost 68 percent.
As we previously found, the growth in U.S. crude oil production has  lowered the cost of some domestic crude oils. For example, prices for  West Texas Intermediate (WTI) crude oil—a domestic crude oil used as a  benchmark for pricing—was historically about the same price as Brent, an  international benchmark crude oil from the North Sea between Great  Britain and the European continent. However, from 2011 through June  13, 2014, the price of WTI averaged $14 per barrel lower than Brent (see  fig. 1). In 2014, prices for these benchmark crude oils narrowed  somewhat, and WTI averaged $101 through June 13, 2014, while Brent  averaged $109. The development of U.S. crude oil production has  created some challenges for crude oil transportation infrastructure  because some production has been in areas with limited linkages to  refining centers. According to EIA, these infrastructure constraints have  contributed to discounted prices for some domestic crude oils.
Much of the crude oil currently produced in the United States has  characteristics that differ from historic domestic production. Crude oil is  generally classified according to two parameters: density and sulfur  content. Less dense crude oils are known as “light,” while denser crude  oils are known as “heavy.” Crude oils with relatively low sulfur content are  known as “sweet,” while crude oils with higher sulfur content are known  as “sour.” As shown in figure 1, according to EIA, production of new  domestic crude oil has tended to be light oils. Specifically, according to  EIA estimates about all of the 1.8 million barrels per day growth in  production between 2011 and 2013 consisted of lighter sweet crude  oils. EIA also forecasts that lighter crude oils will make up a significant  portion of production growth in 2014 and 2015—about 60 percent.
Light crude oil differs from the crude oil that many U.S. refineries are  designed to process. Refineries are configured to produce transportation  fuels and other products (e.g., gasoline, diesel, jet fuel, and kerosene)  from specific types of crude oil. Refineries use a distillation process that  separates crude oil into different fractions, or interim products, based on  their boiling points, which can then be further processed into final  products. Many refineries in the United States are configured to refine  heavier crude oils, and have therefore been able to take advantage of  historically lower prices of heavier crude oils. For example, in 2013, the  average density of crude oil used at domestic refineries was 30.8 while  nearly all of the increase in production in recent years has been lighter  crude oil with a density of 35 or above.
According to EIA, additional production of light crude oil over the past  several years has been absorbed into the market through several  mechanisms, but the capacity of these mechanisms to absorb further  increases in light crude oil production may be limited in the future as  follows:
Reduced imports of similar grade crude oils: According to EIA,  additional production of light oil in the past several years has primarily  been absorbed by reducing imports of similar grade crude oils. Light  crude oil imports fell from 1.7 million barrels per day in 2011 to 1  million barrels per day in 2013. There may be dwindling amounts of  light crude oil imports that can be reduced in the future, according to  EIA.  Increased crude oil exports: As discussed above, crude oil exports  have increased recently, from less than 30 thousand barrels per day  in 2008 to 396 thousand barrels per day in June 2014. Continued  increases in crude oil exports will depend, in part, on the extent of any  relaxation of current export restrictions, according to EIA.  Increased use of light crude oils at domestic refineries: Domestic  refineries have increased the average gravity of crude oils that they  refine. The average API gravity of crude oil used in U.S. refineries  increased from 30.2 degrees in 2008 to 30.8 degrees in 2013.  Continued shifts to use additional lighter crude oils at domestic  refineries can be enabled by investments to relieve constraints  associated with refining lighter crude oils at refineries that were  optimized to refine heavier crude oils.  Increased use of domestic refineries: In recent years, domestic  refineries have been run more intensively, allowing the use of more  domestic crude oils. Utilization—a measure of how intensively  refineries are used that is calculated by dividing total crude oil and  other inputs used at refineries by the amount refineries can process  under usual operating conditions—increased from 86 percent in 2011  to 88 percent in 2013. There may be limits to further increases in  utilization of refineries that are already running at high rates.
section_title: Removing Crude Oil Export Restrictions Is Expected to Increase Domestic Crude Oil Prices and Could Decrease Consumer Fuel Prices
paragraphs: The studies we reviewed and stakeholders we interviewed generally  suggest some domestic crude oil prices would increase if crude oil export  restrictions were removed, while consumer fuel prices could decrease,  although the extent of consumer fuel price changes are uncertain and  may vary by region.
subsections: section_title: Some Domestic Crude Oil Prices Are Expected to Increase
paragraphs: Studies we reviewed and most of the stakeholders we interviewed  suggest that some domestic crude oil prices would increase if crude oil  export restrictions were removed. As discussed above, increasing  domestic crude oil production has resulted in lower prices of some  domestic crude oils compared with international benchmark crude oils.  Three of the studies we reviewed also said that, absent changes in crude  oil export restrictions, the expected growth in crude oil production may not  be fully absorbed by domestic refineries or through exports (where  allowed), contributing to even wider differences in prices between some  domestic and international crude oils. By removing the export  restrictions, these domestic crude oils could be sold at prices closer to  international prices, reducing the price differential and aligning the price of  domestic crude oil with international benchmarks.
While the studies we reviewed and most of the stakeholders we  interviewed agree that domestic crude oil prices would increase if crude  oil export restrictions were removed, stakeholders highlighted several  factors that could affect the extent of price increases. The studies we  reviewed made assumptions about these factors, and actual price  implications of removing crude oil export restrictions may differ from those  estimated in the studies depending on how export restrictions and market  conditions evolve. Specifically, stakeholders raised the following three key  uncertainties:
Extent of future increases in crude oil production. As we recently  found, forecasts anticipate increases in domestic crude oil production  in the future, but the projections are uncertain and vary widely. Two  of the studies and two stakeholders told us that, in the absence of  exports, higher production of domestic light sweet crude oil would  tend to increase the mismatch between such crude oils and the  refining industry. In turn, one study indicated that a greater increase in  production would increase the price effects of removing crude oil  export restrictions. On the other hand, lower than anticipated  production of such crude oil would lower potential price effects as the  additional crude oil could more easily be absorbed domestically.
Extent to which crude oil production increases can be absorbed.  The domestic refining industry and exports to Canada have absorbed  the increases in domestic crude oil production thus far, and one  stakeholder told us the domestic refining industry could provide  sufficient capacity to absorb additional future crude oil production.  This stakeholder said that refineries have the capacity to refine  another 400,000 barrels a day of light crude oil, some of which is not  being used because of infrastructure or logistics constraints. The  industry is planning to develop or is in the process of developing the  capacity to process an additional 500,000 barrels a day of light crude  oil, according to this stakeholder. The current capacity that is not  being utilized plus capacity that is planned or in development would  constitute a total capacity to refine 900,000 barrels per day of light  crude oil. To the extent that light crude oil production increases by  less than this amount, the gap in prices between WTI and Brent could  close in the future as increased crude oil supplies are absorbed.  This would reduce the extent to which domestic crude oil prices  increase if crude oil export restrictions are removed. On the other  hand, some stakeholders suggested that the U.S. refining industry will  not be able to keep pace with increasing U.S. light crude oil  production. For example, IHS stated that refinery investments to  process additional light crude oil face significant risks in the form of  potentially stranded investments if export restrictions were to change,  and this could result in investments not being made as quickly as  anticipated.
Extent to which export restrictions change. Aspects of the export  restrictions could be further defined or interpreted in ways that could  change the pricing dynamics of domestic crude oil markets. Recently,  two companies received clarification from the Department of  Commerce that condensate—a type of light crude oil—that has been  processed through a distillation tower is not considered crude oil and  so not subject to export restrictions. One stakeholder stated that this  may lead to more condensate exports than expected.
Within the context of these uncertainties, estimates of potential price  effects vary in the four studies we reviewed, as shown in table 1.  Specifically, estimates in these studies of the increase in domestic crude  oil prices due to removing crude oil export restrictions range from about  $2 to $8 per barrel. For comparison, at the beginning of June 2014, WTI  was $103 per barrel, and these estimates represent 2 to 8 percent of that  price. In addition, NERA found that removing export restrictions would  have no measurable effect in a case that assumes a low future  international oil price of $70 per barrel in 2015 rising to less than $75 by  2035. According to NERA, current production costs are close to these  values, so that removing export restrictions would provide little incentive  to produce more light crude oil.
section_title: Consumer Fuel Prices Could Decrease, but Effects May Vary by Region
paragraphs: The studies we reviewed and most of the stakeholders we interviewed  suggest that consumer fuel prices, such as gasoline, diesel, and jet fuel,  could decrease as a result of removing crude oil export restrictions. A  decrease in consumer fuel prices could occur because they tend to follow  international crude oil prices rather than domestic crude oil prices,  according to the studies and most of the stakeholders. If domestic crude  oil exports caused international crude oil prices to decrease, consumer  fuel prices could decrease as well. Table 2 shows that the estimates of  the price effects on consumer fuels vary in the four studies we reviewed.  Price estimates range from a decrease of 1.5 to 13 cents per gallon.  These estimates represent 0.4 to 3.4 percent of the average U.S. retail  gasoline price at the beginning of June 2014. In addition, NERA found  that removing export restrictions has no measurable effect on consumer  fuel prices in a case that assumes a low future world crude oil price.
The effect of removing crude oil export restrictions on domestic consumer  fuel prices depends on several uncertain factors. First, it depends on the  extent to which domestic versus international crude oil prices determine  the domestic price of consumer fuels. Recent research examining the  relationship between domestic crude oil and gasoline prices concluded  that low domestic crude oil prices in the Midwest during 2011 did not  result in lower gasoline prices in that region. This research supports the  assumption made in all of the studies we reviewed that to some extent  higher prices of some domestic crude oils as a result of removing crude  oil export restrictions would not be passed on to consumer fuel prices.  However, some stakeholders told us that this may not always be the case  and that more recent or detailed data could show that lower prices for  some domestic crude oils have influenced consumer fuel prices.
Second, the extent to which domestic consumer fuel prices could decline  also depends on how the global crude oil market responds to the  domestic crude oil entering the market. In this regard, stakeholders  highlighted several uncertainties. In particular, the response of the  Organization of the Petroleum Exporting Countries (OPEC) could have a  large influence on any international crude oil price changes. The  projections in the RFF, IHS, and ICF International studies assumed that  OPEC would not respond by attempting to counterbalance the effect of  increased U.S. exports by reducing its countries’ exports. However,  OPEC could seek to maintain international crude oil prices by pulling  crude oil from the global market. In this case, the international crude oil  price would not be affected by removing export restrictions, and  consumer fuel prices would not decline. On the other hand, OPEC could  increase production to maintain its large market share, which would push  international crude oil prices and consumer fuel prices downward. NERA  examined two alternative OPEC response cases, and found that gasoline  prices would not generally be affected if OPEC reduces production, and  that consumer fuel prices would decrease further if OPEC maintains its  production in the face of lower global crude oil prices. In addition, one  stakeholder questioned whether international crude oil prices would be  affected by U.S. crude oil exports. Given the size of the global crude oil  market, this stakeholder suggested that U.S. exports would have little to  no effect on international crude oil prices.
Third, two of the stakeholders we interviewed suggested that there could  be important regional differences in consumer fuel price implications, and  that prices could increase in some regions—particularly the Midwest and  the Northeast—due to changing transportation costs and potential  refinery closures. For example, two stakeholders told us that because of  requirements to use more expensive U.S.-built, -owned, and -operated  ships to move crude oil between U.S. ports, allowing exports could enable  some domestic crude oil producers to ship U.S. crude oil for less cost to  refineries in foreign countries. Specifically, representatives of one refiner  told us that, if exports restrictions were removed, they could ship oil to  their refineries in Europe at a lower cost than delivering the same oil to a  refinery on the U.S. East Coast. According to another stakeholder, this  could negatively affect the ability of some domestic refineries to compete  with foreign refineries. Additionally, because refineries are currently  benefiting from low domestic crude oil prices, some studies and  stakeholders noted that refinery margins could be reduced if removing  export restrictions increased domestic crude oil prices. As a result, some  refineries could face an increased risk of closure, especially those located  in the Northeast. As EIA reported in 2012, refinery closures in the  Northeast could be associated with higher consumer fuel prices and  possibly higher price volatility. However, according to one stakeholder,  domestic refiners still have a significant cost advantage in the form of less  expensive natural gas, which is an important energy source for many  refineries. For this and other reasons, one stakeholder told us they did not  anticipate refinery closures as a result of removing export restrictions.
section_title: Removing Crude Oil Export Restrictions Is Expected to Increase Domestic Production and Have Other Effects
paragraphs: The studies we reviewed and stakeholders we interviewed generally  suggest that removing crude oil export restrictions would increase  domestic crude oil production and may affect the environment and the  economy.
subsections: section_title: Removing Export Restrictions Is Expected to Increase Domestic Production, but Projections Vary
paragraphs: Studies we reviewed and stakeholders we interviewed generally agree  that removing crude oil export restrictions would increase domestic crude  oil production. Monthly domestic crude oil production has increased by  almost 68 percent since 2008—from an average of about 5 million barrels  per day in 2008 to 8.3 million barrels per day in April 2014. Even with  current crude oil export restrictions, given various scenarios, EIA projects  that domestic production will continue to increase and could reach 9.6  million barrels per day by 2019. If export restrictions were removed,  according to the four studies we reviewed, the increased prices of  domestic crude oil are projected to lead to further increases in crude oil  production. Projections of this increase varied in the studies we  reviewed—from a low of an additional 130,000 barrels per day on  average between 2015 and 2035, according to the ICF International  study, to a high of an additional 3.3 million barrels per day on average  between 2015 and 2035 in NERA’s study. This is equivalent to 1.5  percent to almost 40 percent of production in April 2014.
One stakeholder we spoke with told us that, although domestic demand  for crude oil is not expected to change, production will rise as a result of  increased international demand, primarily from Asia. For example,  according to EIA, India was the fourth-largest consumer of crude oil and  petroleum products in the world in 2013, and the country’s dependence  on imported crude oil continues to grow. Another stakeholder stated that  removing export restrictions could lead to increased local and regional  opposition to crude oil production if the crude oil was primarily for export,  which could affect domestic production.
section_title: Removing Export Restrictions Is Expected to Affect the Environment
paragraphs: Two of the studies we reviewed and most stakeholders we spoke with  stated that the increased crude oil production that would result from  removing the restrictions on crude oil exports may affect the environment.  In September 2012, we found that crude oil development may pose  certain inherent environmental and public health risks; however, the  extent of the risk is unknown, in part, because the severity of adverse  effects depend on various location- and process-specific factors, including  the location of future shale oil and gas development and the rate at which  it occurs, as well as geology, climate, business practices, and regulatory  and enforcement activities. The stakeholders who raised concerns  identified the following risks related to crude oil production, about which  GAO has reported in the past:
Water quality and quantity: Increased crude oil production,  particularly from shale, could affect the quality and quantity of surface  and groundwater sources, but the magnitude of such effects is  unknown. In October 2010, we found that water is needed for a  number of oil shale development activities, including constructing  facilities, drilling wells, generating electricity for operations, and  reclamation of drill sites. In 2012, we found that shale oil and gas  development may pose a risk to surface water and groundwater  because withdrawing water from streams, lakes, and aquifers for  drilling and hydraulic fracturing could adversely affect water  resources. For example, we found that groundwater withdrawal  could affect the amount of water available for other uses, including  public and private water supplies. One of the stakeholders we  interviewed suggested that water withdrawal is already an important  consideration, particularly for areas experiencing drought. For  example, the stakeholder noted that crude oil production and  associated water usage already has implications for the Edwards  Aquifer, a groundwater system serving the agricultural, industrial,  recreational, and domestic needs of almost two million users in south  central Texas. In addition, removing export restrictions may affect  water quality. Another stakeholder told us that allowing crude oil  exports would lead to more water pollution as a result of increased  production through horizontal drilling.
Air quality: 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 production process  often involves the direct release of pollutants into the atmosphere  (venting) or burning fuels (flaring). Two stakeholders told us that  venting and flaring has escalated in North Dakota, in part because  regulatory oversight and infrastructure have not kept pace with the  recent surge in crude oil production in the state. In January 2014, the  North Dakota Industrial Commission reported that nearly 30 percent of  all natural gas produced in the state is flared. According to a 2013  report from Ceres, flaring in North Dakota in 2012 resulted in  greenhouse gas emissions equivalent to adding 1 million cars to the  road. Another stakeholder told us that allowing crude oil exports  would lead to more air pollution as a result of increased production  through horizontal drilling and hydraulic fracturing. RFF estimated the  potential environmental effect of removing export restrictions,  estimating that increases in crude oil production and consumption  would increase carbon dioxide emissions worldwide by almost 22  million metric tons per year. By comparison, U.S. emissions from  energy consumption totaled 5,393 million metric tons in 2013  according to EIA. NERA estimated that increased crude oil production  and use of fossil fuels would increase greenhouse gas emissions by  about 12 million metric tons of carbon dioxide equivalents per year on  average from 2015 through 2035.
Transportation challenges: Increased crude oil production could  exacerbate transportation challenges. In March 2014, we found that  domestic and Canadian crude oil production has created some  challenges for U.S. crude oil transportation infrastructure. Some of the  growth in crude oil production has been in areas with limited  transportation to refining centers. To address this challenge, refiners  have relied on rail to transport crude oil. According to data from the  Surface Transportation Board, rail moved about 236,000 carloads of  crude oil in 2012, which is 24 times more than the roughly 9,700  carloads moved in 2008. As we recently found, as the movement of  crude oil by rail has increased incidents such as spills and fires  involving crude oil trains have also increased—from 8 incidents in  2008 to 119 incidents in 2013 according to Department of  Transportation data. Some stakeholders told us that removing  export restrictions would increase the risk for crude oil spills by rail  and other modes of transportation such as tankers. On the other  hand, one stakeholder suggested that removing export restrictions  could reduce the amount of crude oil transported by rail, in some  instances, since the most economic way to export crude oil is by  pipeline to a tanker. As a result, the number of rail accidents involving  crude oil spills could decrease.
section_title: Removing Export Restrictions Is Expected to Affect the Economy
paragraphs: The studies we reviewed suggest that removing crude oil export  restrictions would increase the size of the economy. Three of the studies  project that removing export restrictions would lead to additional  investment in crude oil production and increases in employment. This  growth in the oil sector would—in turn—have additional positive effects in  the rest of the economy. For example, NERA projects an average of  230,000 to 380,000 workers would be removed from unemployment  through 2020 if export restrictions were eliminated in 2015. These  employment benefits largely disappear if export restrictions are not  removed until 2020 because by then the economy will have returned to  full employment. Potential implications for investment, public revenue,  and trade are as follows:  Investments: According to one of the studies we reviewed, removing  export restrictions may lead to more investment in crude oil  exploration and production, but this investment could be somewhat  offset by less investment in the refining industry. As discussed  previously, removing export restrictions is expected to increase  domestic crude oil production. Private investment in drilling rigs,  engineering services, and transportation and logistics facilities, for  example, is needed to increase domestic crude oil production.  According to IHS, this will directly benefit industries such as  machinery, fabricated metals, steel, chemicals, and engineering  services. At the same time, removing export restrictions may  decrease investment in the refining industry because the industry  would not need extensive additional investment to accommodate  lighter crude oils. For example, one stakeholder told us that, under  current export restrictions, refining additional light crude oils may  require capital investment to remove processing constraints at  refineries that are designed to process heavier crude oils. Officials  from one refining company told us that they had invested a significant  amount of capital to refine lighter oils. For example, the refinery  installed two new distillation towers to process lighter crude oils at a  cost of $800 million. Such investments may not be necessary if export  restrictions were removed.
Public revenue: Two of the studies we reviewed suggest that  removing export restrictions would increase government revenues,  although the estimates of the increase vary. One study estimated that  total government revenue would increase by a combined $1.4 trillion  in additional revenue from 2016 through 2030 while another study  estimated that U.S. federal, state, and local tax receipts combined  with royalties from drilling on federal lands could increase by an  annual average of $3.9 to $5.7 billion from 2015 through 2035.
Trade: According to the studies we reviewed, removing export  restrictions would contribute to further declines in net petroleum (i.e.,  crude oil, consumer fuels, and other petroleum products) imports and  reduce the U.S. trade deficit. Three of the studies we reviewed  estimated the effect of removing export restrictions on net petroleum  imports, with ICF projecting a decline in net imports of about 100,000  to 300,000 barrels per day; IHS projecting a decline, but not providing  a specific estimate; and NERA projecting a decline of about 0.6 to 3.2  million barrels per day. Further, according to one study, removing  export restrictions could also improve the U.S. trade balance because  the light sweet crude oils are usually priced higher than heavy, sour  crude oils. One study estimated that removing export restrictions  could improve the trade balance (narrow the U.S. trade deficit) by $8  to $15 billion per year on average from 2015 through 2035. Another  study estimated that removing crude oil export restrictions would  improve the trade balance by $72 to $101 billion per year from 2016  through 2030.
section_title: Changing Market Conditions Raise Questions about the Size, Location, and Composition of the SPR
paragraphs: Changing market conditions—most importantly the significant increase in  domestic production of crude oil from shale—have implications for the  role of the SPR, including its appropriate size, location, and composition.  DOE has taken some steps to reexamine the location and composition of  the SPR in light of these changes, but has not recently reexamined its  size.
subsections: section_title: Changing Crude Oil Market Conditions Affect the SPR
paragraphs: Recent and expected changes in crude oil markets have important  implications for the role of the SPR, including its size, location, and  composition. DOE has recognized that recent increases in domestic  crude oil production and correlating reductions in crude oil imports have  changed how crude oil is transported around the United States, and that  these changes carry potential implications for the operation and  maintenance of the SPR. As discussed above, removing crude oil export  restrictions would be expected to increase domestic crude oil production  and contribute to further declines in net imports. Our review of DOE  documents, prior GAO work, and discussions with stakeholders highlight  three primary implications for the SPR.
Size: Increased domestic crude oil production and falling net petroleum  imports may affect the ideal size of the SPR—how much the SPR should  hold to optimize the benefits of protecting the economy from damage with  the costs of holding the reserves. One measure of the economy’s  vulnerability to oil supply disruptions is to assess net petroleum imports— imports minus exports. Net petroleum imports have declined from a peak  of 60 percent of consumption in 2005 to about 30 percent in the first half  of 2014. In 2006, net imports were expected to increase in the future,  increasing the country’s reliance on foreign crude oil. However, imports  have declined and, according to EIA’s most recent forecast, are expected  to remain well below 2005 import levels into the future. (See fig. 3.) As  discussed above, removing crude oil export restrictions would be  expected to contribute to additional decreases in net petroleum imports in  the future.
To the extent that changes in net imports reflect changes in vulnerability,  these and other changes in the economy may have reduced the nation’s  vulnerability to supply disruptions. For example, a recent report by the  President’s Council of Economic Advisers suggests that decreased  domestic petroleum demand, increased domestic crude oil production,  more fuel efficient vehicles, and increased use of biofuels, have each  contributed to reducing the vulnerability of the nation’s economy to  international crude oil supply disruptions. Although international crude  oil supply and price volatility remains a risk, the report suggests that  additional reductions in net petroleum imports could reduce those risks in  the future. In addition, the SPR currently holds oil in excess of  international obligations. As a member of the IEA, the United States is  required to maintain reserves of crude oil or petroleum products equaling  at least 90 days of net imports, which it does with a combination of public  and private reserves. According to IEA, as of May 2014, the SPR held  106 days of net imports, and private reserves held an additional 141 days  of imports for a total of 247 days—well above the 90 days required by the  IEA. In light of these factors, some of the stakeholders we interviewed  raised questions about whether such a large SPR is needed in the future.  For example, one stakeholder indicated that SPR crude oil is surplus and  no longer needed to protect the economy. However, other stakeholders  highlighted the importance of maintaining the SPR. For example, one  stakeholder said that the SPR should be maintained at the current level,  and another said that the SPR serves an important “energy insurance”  service. DOE officials and one other stakeholder highlighted that, in  addition to net imports, there are other factors that may affect the  appropriate size of the SPR.
Location: According to DOE, changes in how crude oil is transported  throughout the United States and in the existing infrastructure  surrounding SPR facilities have implications for the location of the SPR.  Crude oil in the SPR is stored along the Gulf Coast, where it can take  advantage of being in close proximity to a major refining center, as well  as distribution points for tankers, barges, and pipelines that can carry  crude oil from the SPR to refineries in other regions of the country. Most  of the system of crude oil pipelines in the United States was constructed  in the 1950s, 1960s, and 1970s to accommodate the needs of the refining  sector and demand centers at the time. According to DOE officials, the  existing infrastructure was designed primarily to move crude oil from the  southern United States to the North. The SPR has historically been able  to rely on this distribution system to reach a large portion of the nation’s  refining capacity. But, with increases in crude oil production in the  Northern U.S. and imports of crude oil from Canada, the distribution  system has changed to increase crude oil flows south to the Gulf Coast.  Such changes include new pipeline construction and expansions, flow  reversals in existing pipelines, and increased utilization of terminals and  marine facilities. Such changes may make it more difficult to move crude  oil from the SPR to refineries in certain regions of the United States, such  as the Midwest, where almost 20 percent of the nation’s refining capacity  is located, according to EIA data. Some stakeholders raised questions  about the location of the SPR. One stakeholder also suggested that  holding SPR crude oil in the western United States may better ensure  access to crude oil in the case of a disruption, since the West has no  pipeline connectivity to the Gulf Coast. According to DOE, recent changes  to crude oil distribution in the United States could have significant  implications for the operation and maintenance of the SPR.
Composition: In 2006, we reported that the type of crude oil in the SPR  was not compatible with all U.S. refineries. We reported that some U.S.  refineries processed crude oils heavier than those stored in the SPR. We  found that in the event of a disruption in the supply of heavy crude oil,  refineries configured to use heavy crude oil would not be able to  efficiently refine crude oil from the SPR and would likely reduce  production of some petroleum products. As we reported, in such  instances, prices for heavy crude oil products could increase, reducing  the SPR’s effectiveness to limit economic damage. Refinery officials we  spoke with noted that the SPR should contain heavier crude oils that  domestic refineries could refine in the event of a supply disruption. Since  our 2006 report, domestic production of light sweet crude oil has  increased. According to EIA, roughly 96 percent of the 1.8 million-barrel  per day growth in production from 2011 to 2013 consisted of light sweet  grades with API gravity of 40 or above. As a result, imports of light crude  oils have declined, and U.S. reliance on imported heavy crude oil has  increased from 37 percent of total imports in 2008 to 50 percent of total  imports in 2013, as shown in figure 4. However, DOE officials raised  concerns about the prospect of storing additional heavy crude oil in the  SPR. According to DOE officials and a 2010 report by DOE, storing heavy  crude oil in the SPR would limit the SPR’s ability to respond to nonheavy  crude oil disruptions, such as a loss of Middle East medium sour crude  oils. In addition, storing more heavy crude would require infrastructure  improvements. At the same time, DOE officials also stated that, based  on recent conversations with refinery officials, no U.S. refineries would  have difficulty using SPR crude oils. Another issue raised by some  stakeholders we interviewed is that the SPR holds primarily crude oil, and  some stakeholders told us that holding additional consumer fuels could  be beneficial. Many recent economic risks associated with supply  disruptions have originated from the refining and distribution sectors  rather than crude oil supplies.
section_title: DOE Has Taken Steps to Reexamine Some Aspects of the SPR but Has Not Recently Reexamined Its Size
paragraphs: DOE has taken some steps to assess the appropriate location and  composition of the SPR in view of changing market conditions, but has  not recently re-examined its size. We previously found that federal  programs should be re-examined if there have been significant changes  in the country or the world that relate to the reason for initiating the  program. In that report, we identified a set of reexamination criteria that,  when taken together, illustrate the issues that can be addressed through  a systematic reexamination process. We found that many federal  programs and policies were designed decades ago to respond to trends  and challenges that existed at the time of their creation. Given fiscal  constraints that we are likely to face for years to come, reexamination  may be essential to addressing newly emergent needs without unduly  burdening future generations of taxpayers. DOE has taken some steps to  reexamine how recent changing market conditions could affect the  location and composition of the SPR as follows:  In March 2014, DOE conducted a test sale of SPR crude oil to  evaluate the SPR’s ability to draw down and distribute SPR crude oil  through multiple pipeline and terminal delivery points within one of its  distribution systems. DOE officials told us they were reviewing the  results of the test sale including data on the movement of crude oil  through the system.
DOE officials also told us they are working to establish a Northeast  Regional Refined Petroleum Product Reserve in New York Harbor  and New England to store refined consumer fuels. Although the  northeast reserve will not store crude oil, it will be considered part of  the SPR and hold 1 million barrels of gasoline at a cost of $200  million.
DOE officials told us that they are conducting a regional fuel resiliency  study that will provide insights into whether there is a need for  additional regional product reserves and, if so, where these reserves  should be located and the capacity. We did not assess this effort  because the study was ongoing at the time of our review.
DOE finalized an assessment in 2010 of the compatibility of crude oil  stored in the SPR with the U.S. petroleum refining industry. DOE  decided against storing heavy crude oil in the SPR at the time, but  committed to revisiting the option of storing heavy crude oil in the  future.
However, DOE has not recently reexamined the appropriate size of the  SPR. DOE last issued a strategic plan for the SPR in May 2004. The plan  outlined the mission, goals, and near-term and long-term objectives for  the SPR. In 2006, we recommended that the Secretary of Energy  reexamine the appropriate size of the SPR. In 2007, while DOE was  planning to expand the SPR to its authorized size of 1 billion barrels, the  Administration reevaluated the need for an SPR expansion and decided  that the current level was adequate. In responding to our  recommendation, DOE stated that its reexamination had taken the form of  more “actionable items,” including not requesting expansion-funding in its  2011 budget and canceling and redirecting prior year’s expansion funding  to general operations of the SPR. Officials from DOE’s Office of  Petroleum Reserves told us that the last time they conducted a  comprehensive re-examination of the size of the SPR was in 2005. At that  time, DOE’s comprehensive study examined the costs and benefits of  alternative SPR sizes. Officials told us that they have not conducted a  comprehensive reexamination since 2005 because the SPR only recently  met the IEA requirement to maintain 90 days of imports. However, the  IEA requirement is for total reserves, including those held by the  government and private reserves. As shown in figure 5, such reserves in  the United States are currently in excess of the nation’s international  obligations and, in some scenarios, are expected to be in excess in the  future. In July 2014, DOE’s Office of Inspector General recommended  that the Office of Fossil Energy perform a long-range strategic review of  the SPR to ensure it is best configured to respond to the current and  future needs of the United States. DOE concurred with the  recommendation. DOE stated that it expected to determine the  appropriate course of action by August 2014, and according to DOE, it  has initiated a process to conduct such a review.
The SPR currently holds oil valued at over $73 billion, and without a  current reexamination of the SPR’s size, DOE cannot be assured that the  SPR is sized appropriately. The SPR may therefore be at risk of holding  excess crude oil. In addition, DOE officials told us that SPR infrastructure  is aging and will need to be replaced soon. Conducting a reexamination  of the size of the SPR could also help inform DOE’s decisions about how  or whether to replace existing infrastructure. If DOE were to assess the  appropriate size of the SPR and find that it held excess crude oil, the  excess oil could be sold to fund other national priorities. For example, in  1996, SPR crude oil was sold to reduce the federal budget deficit and  offset other appropriations. If, for example, DOE found that 90 days of  imports was an appropriate size for the SPR, it could sell crude oil worth  about $10 billion.
section_title: Conclusions
paragraphs: Increasing domestic crude oil production, and declines in consumption  and crude oil imports have profoundly affected U.S. crude oil markets  over the last decade. These changes can have important implications for  national energy policies and programs. The SPR is a significant national  asset, and it is important for federal agencies tasked with overseeing  such assets to examine how, if at all, changing conditions affect their  programs. DOE has recently taken several steps to reexamine various  aspects of the SPR in light of these changes, including its location and  composition; however, DOE’s most recent comprehensive examination of  the appropriate size of the SPR was conducted in 2005 when the general  expectation was that the country would increasingly rely on foreign crude  oil. At about that time, however, it began to become clear that this was  not to be the case. Removing export restrictions would be expected to  lead to further decreases in net imports that would further affect the role  of the SPR. Without a reexamination of the SPR that considers whether a  smaller or larger SPR is in the national interest in light of current and  expected future changes in market conditions, DOE cannot be assured  that the SPR is holding an appropriate amount of crude oil in the SPR,  and its ability to make appropriate decisions regarding maintenance of the  SPR could be compromised.
section_title: Recommendation for Executive Action
paragraphs: In view of recent changes in market conditions and in tandem with DOE’s  ongoing activities to assess the content, connectivity, and other aspects  of the SPR, we recommend that the Secretary of Energy undertake a  comprehensive reexamination of the appropriate size of the SPR in light  of current and expected future market conditions.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOE and Commerce for their review  and comment. The agencies provided technical comments, which we  incorporated as appropriate. In its written comments, reproduced in  appendix III, DOE concurred in principle with our recommendation.  However, DOE stated that conducting a study of only the size of the SPR  would be too narrow in scope and would not address other issues  relevant to the SPR carrying out its mission of providing energy security  to the United States. DOE stated that a broader, long-range review of the  SPR is needed. We agree that such a review would be beneficial. We do  not recommend that DOE undertake an isolated reexamination of the size  of the SPR, but that such a reexamination be conducted in tandem with  DOE’s other activities to assess the SPR and we clarified our  recommendation accordingly.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Secretaries of Energy and Commerce,  and other interested parties. In addition, the report will be available at no  charge on the GAO website at http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-3841 or ruscof@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix IV.
section_title: Appendix I: Additional Information on Four Studies of the Implications of Removing Crude Oil Export Restrictions
paragraphs: We identified four studies that examined the price and other implications  of removing crude oil export restrictions. These four studies are as  follows:
Resources for the Future (RFF). Crude Behavior: How Lifting the  Export Ban Reduces Gasoline Prices in the United States.  Washington, D.C.: Resources for the Future, February 2014, revised  March 2014.  ICF International and EnSys Energy (ICF International). The Impacts  of U.S. Crude Oil Exports on Domestic Crude Production, GDP,  Employment, Trade, and Consumer Costs. Washington, D.C.: ICF  Resources, March 31, 2014.  IHS. US Crude Oil Export Decision: Assessing the impact of the  export ban and free trade on the US economy. Englewood, Colorado:  IHS, 2014.
NERA Economic Consulting (NERA). Economic Benefits of Lifting the  Crude Oil Export Ban. Washington, D.C.: NERA Economic  Consulting, September 9, 2014.
Table 3 describes these studies and several key assumptions, Table 4  summarizes their findings regarding prices, and Table 5 summarizes their  findings regarding other implications of removing crude oil export  restrictions.
section_title: Appendix II: List of Stakeholders Interviewed
section_title: Appendix III: Comments from the Department of Energy
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact:
section_title: Staff Acknowledgments:
paragraphs: In addition to the individual named above, Christine Kehr (Assistant  Director), Philip Farah, Quindi Franco, Cindy Gilbert, Taylor Kauffman,  Celia Rosario Mendive, Alison O’Neill, and Barbara Timmerman made  key contributions to this report.
section_title: Related GAO Products
paragraphs: Petroleum Refining: Industry’s Outlook Depends on Market Changes and  Key Environmental Regulations. GAO-14-249. Washington, D.C.: March  14, 2014.
Oil and Gas: Information on Shale Resources, Development, and  Environmental and Public Health Risks. GAO-12-732. Washington, D.C.:  September 5, 2012.
Energy Markets: Estimates of the Effects of Mergers and Market  Concentration on Wholesale Gasoline Prices. GAO-09-659. Washington,  D.C.: June 12, 2009.
Strategic Petroleum Reserve: Issues Regarding the Inclusion of Refined  Petroleum Products as Part of the Strategic Petroleum Reserve.  GAO-09-695T. Washington, D.C.: May 12, 2009.
Energy Markets: Refinery Outages Can Impact Petroleum Product Prices,  but No Federal Requirements to Report Outages Exist. GAO-09-87.  Washington, D.C.: October 7, 2008.
Energy Markets: Increasing Globalization of Petroleum Products Markets,  Tightening Refining Demand and Supply Balance, and Other Trends  Have Implications for U.S. Energy Supply, Prices, and Price Volatility.  GAO-08-14. Washington, D.C.: December 20, 2007.
Strategic Petroleum Reserve: Available Oil Can Provide Significant  Benefits, but Many Factors Should Influence Future Decisions about Fill,  Use, and Expansion. GAO-06-872. Washington, D.C.: August 24, 2006.
Motor Fuels: Understanding the Factors That Influence the Retail Price of  Gasoline. GAO-05-525SP. Washington, D.C.: May 2, 2005.
Alaskan North Slope Oil: Limited Effects of Lifting Export Ban on Oil and  Shipping Industries and Consumers. GAO/RCED-99-191. Washington,  D.C.: July 1, 1999.