Energy

As Industry Pushes for Exports, Voters Fear Price Increases

For more than four decades, federal law has prohibited U.S. energy companies from selling unrefined American crude oil abroad without a special license. But that policy is under scrutiny since the Commerce Department approved two applications to export a type of light oil called condensate.

A $40 million shipment of oil from Texas departed for South Korea last week, the result of a campaign fueled by “determined energy companies, loophole-seeking lawyers, and an unprecedented boom in American drilling that could create a glut of ultralight oil,” the Wall Street Journal reported.

Most of that effort has been behind-the-scenes, but major oil companies have also increased their public calls for an export policy change in recent months.

With midterm elections approaching, they may be facing an uphill battle on that front, according to Morning Consult polling data. Although domestic oil production has increased nearly 50 percent since the end of 2011, likely voters worry about the impact that expanding energy exports could have on their wallets.

More than half of those polled—55 percent—think more oil or natural gas exports could raise prices in the U.S. Still, 28 percent have no opinion on the matter. Far fewer—17 percent—disagree that exports might increase their electric bills or gasoline prices.

But at the same time, 55 percent of likely voters favor expanding oil exports, according to a separate poll from July.

 

Democrats were more likely than Republicans to expect price increases. They were also split, 50-50, on whether the government should expand oil exports. Among Republicans, however, 67 percent favor expanding oil exports.

The results might seem contradictory. More than half of voters expect they would spend more if the U.S. expanded energy exports. But more than half also say they are in support of exporting more oil. And that’s the key problem for policymakers right now.

“The politics of it all are really quite complicated specifically because nobody knows what public opinion would be,” said Sarah O. Ladislaw, director and senior fellow in the Energy and National Security Program at the Center for Strategic and International Studies.

Most people assumed the public would be totally against crude oil exports, but others disagreed because they argued Americans support product exports generally, Ladislaw said.

What it comes down to, Ladislaw says, is a lack of public understanding about how oil prices—and therefore gasoline prices—are determined.

Voters have been hearing from their representatives in Congress that a ramp up of oil and natural gas production has made the U.S. more energy independent. And they’ve been told by proponents of exports that they would expand the market, spur even more production and lead to lower gasoline prices. But over the last few years as companies have extracted more and more oil from American soil, gasoline prices have not plummeted. So voters see a disconnect.

Ladislaw says that’s because voters, understandably, don’t know enough about global markets and how situations around the world, in places like Iran and Nigeria, have kept gasoline prices higher than they might otherwise be.

In any case, the industry-supported narrative of an increasingly energy independent America doesn’t seem to be breaking through.

Our polling data from early June showed that voters are largely split on whether they believe the U.S. is becoming energy independent or becoming an energy superpower.

And when you ask voters more generally about energy exports, 25 percent want to increase them, while 75 percent want to decrease them or keep them the same.

While it appears voters are already conflicted about energy exports, Ladislaw expects the public dialogue on the issue will only become more complicated. Voters are having to contemplate a whole new slate of issues, like how conflicts between Russia and Ukraine affect global natural gas supplies and how cold winters can disrupt regional power systems despite abundant energy resources.

But at the end of the day, the biggest factor in public opinion is how exports might impact people  on a day-to-day basis when they pay for gasoline.

“It will be interesting to see how the public responds to a more complicated mosaic of where energy security actually comes from and how that impacs their wallets and their sense of stability,” Ladislaw said.

 

Morning Consult