Opening the spigot on U.S. oil exports would stimulate production, lower domestic prices for gasoline and create nearly one million jobs, according to a new study by energy industry-friendly consultancy IHS Inc.

Doing away with export restrictions, which have been in place since the 1970s, would also lift U.S. household income, gross domestic product (GDP) and government revenues, according to an IHS study. “The resulting increase in domestic oil production would be so great that it would cut the U.S. oil import bill by an average of $67 billion per year,” the firm said in its study titled “U.S. Crude Oil Export Decision: Assessing the Impact of the Export Ban and Free Trade on the U.S. Economy.”

“The 1970s-era policy restricting crude oil exports — a vestige from a price controls system that ended in 1981 — is a remnant from another time,” said IHS Chairman Daniel Yergin. “It does not reflect the dramatic turnaround in domestic oil production, led by tight oil, which has reversed the United States’ oil position so significantly. The United States has cut its dependence on foreign oil in half since 2005, and its production gains have exceeded that of the rest of the world in recent years. The economic contributions of this turnaround have been substantial. Allowing the free trade of oil would expand those gains for consumers and the wider economy.”

Booming domestic oil production from U.S. shale plays is not well suited to existing U.S. refining capacity, which was developed in years past to handle heavier crudes imported from overseas. Thanks to light tight oil production, U.S. domestic oil output has grown from 5 million b/d in 2008 to 8.2 million b/d as of last March, IHS said.

“…[A]s a result of the boom in tight oil production, the U.S. is exceeding its capacity to process that type of crude,” said IHS Director James Fallon. “Current export restrictions mean that light crude has to be sold at a sharp discount to compensate for the extra cost of refining it in facilities that were not designed for it. That gridlock is preventing additional investment and production — and the additional economic benefits — that could otherwise take place.”

Allowing export of domestic crude would relieve gridlock around domestic refining capacity, IHS said. It also would stimulate $746 billion of industry investment during the study period 2016-2030 and lead to 1.2 million b/d of additional oil production per year.

The call for relaxing or eliminating crude oil export restrictions has grown louder over recent months, with energy industry leaders asserting that there is just too much domestic production not to allow exports.

Speaking at a recent industry conference, industry analyst Tom Petrie said the Obama administration seems reluctant to deal with export restrictions, but “it is now clear that our ability to produce oil is going to exceed our ability to refine it and the demand for it domestically. We are very likely to need to export some oil to premium markets, while importing other oil that is better suited for certain of our refineries [see Shale Daily, May 27].”

Gasoline prices would not rise due to crude exports because gasoline is traded in a global market, with U.S. pump prices reflecting global prices, IHS said. “If crude oil export restrictions were lifted, the resulting increase in oil production would increase supply and actually lower gasoline prices,” said Kurt Barrow, IHS vice president for downstream energy. “The gasoline trade and price fundamentals are clear.”

That additional supply of crude oil would lower gasoline prices by an annual average of 8 cents per gallon, according to the study. The combined savings for U.S. motorists during the 2016-2030 period would translate to $265 billion compared to a scenario in which export restrictions remain in place.

Hundreds of thousands of jobs would be created per year over the study period if export of domestic crude were allowed, IHS said.

“The study finds that the growth in economic benefits would be rapid, with many of the economic impacts reaching peak levels in the next few years before maintaining elevated levels throughout the remainder of the study period,” IHS said. “This is due to an immediate surge in investment that would result from pent-up potential to be unlocked if crude exports were permitted. However, as a result of the increase in overall oil supply, the annual reductions in the price of gasoline remain largely consistent throughout.

“If exports restrictions were removed, the resulting increase in domestic oil production would be to such a degree that U.S net imports of petroleum would be less than they be would under current policies.”

The removal of export restrictions would lower net petroleum imports to the United States by nearly 1 million b/d in 2016 for a savings of more than $43 billion. The annual savings would grow until peaking at nearly $87 billion (nearly 2 million b/d lower) in 2025. The savings remains significant for the remainder of the study period, averaging more than $74 billion (1.8 million b/d lower) per year during that time, according to the study.

Allowing U.S. crude oil exports would continue to lower petroleum and petroleum products’ portion of the total U.S. goods trade deficit. In 2008, petroleum and petroleum products made up nearly 47% of the total U.S. net imports of foreign goods, and that figure remained at or above 40% through 2012 before declining significantly to 33% in 2013.