All crude oil is not the same. Crude oil ranges from light to heavy, high to low sulfur and sour to sweet. The oil being produced from tight rock and shale is a lighter type. The oil produced from the oil sands in Canada and certain areas of California is the heaviest. Oil fields across the U.S. produce different types across the range. These different types are used for different purposes: transportation fuels, fuel oils for heating and electricity generation and the petroleum-based materials found in nearly everything we use today.
Because not all oil is the same, U.S. refineries are configured to process different types of oil. Over the years, U.S. oil production had become heavier, so U.S. refineries are built to process more heavy oil than light. They’re not configured to handle the light oil that is currently being produced. To use more light crude domestically, U.S. refineries would require steep domestic crude devaluation and would run in a suboptimal fashion or require a significant investment in new capacity. These discounts would threaten domestic oil production.
Crude oil exports
The law banning U.S. crude oil exports dates back to the 1970s when supplies were short and it was thought that domestic production was peaking. Circumstances are quite different today, as the U.S is now one of the top oil producers in the world. Refined products such as gasoline are already exported from the U.S. to other countries, but domestically produced crude oil is not.
Global free trade of oil benefits the U.S. economy, our balance of trade and creates domestic jobs. Studies indicate that U.S. crude exports would increase global supply and reduce international crude prices, which, in turn, would reduce prices at the pump.
The ability to export crude oil also has a direct impact on job growth in the oil and natural gas industry within the U.S. Direct job creation has a spillover effect, which means it creates additional jobs beyond companies and states within the sector. For example, steel manufacturers in Ohio benefit as they produce the raw materials needed to build oilfield equipment that is used across the continent. Retail businesses, from restaurants and hotels to auto dealers, benefit from the economic growth generated from oil and natural gas production.
Benefits from free trade of crude oil are distributed throughout the U.S. Jobs growth and economic benefits are continent-wide and not just in large oil producing states due to substantial supply chains supporting the field production, capital spending, transportation, and refining of crude oil. For example, 24% of the future jobs supporting the oil industry are located in states that essentially produce no crude oil.
according to IHS study, U.S. Crude Oil Export Decision: Assessing the Impact of the Export Ban and Free Trade on the U.S. Economy.