ILTA Joins Joint Energy Industry Association Letter Voicing Opposition to Potential Diesel Export Ban

On September 23, ILTA joined a coalition of over 30 energy associations on a letter to President Trump urging him to reject calls to ban or otherwise limit the exports of diesel and other products. Please see the letter below.

Dear Mr. President,

On behalf of U.S. businesses, manufacturers, refiners, and oil & gas producers, thank you for your continuing commitment to an unsurpassed U.S. energy industry. More American energy means a stronger economy, greater energy security, and less leverage for our adversaries. Your policies have helped the U.S. lead the world in the production of oil and refined products.

In service of this shared goal, we urge you to reject calls to ban or otherwise limit the exports of diesel and other products that have made the U.S. energy industry so strong. Export bans would lead to less fuel production, tighter supplies, and rising costs for American families, farmers, and truckers.

With 10 percent of global refining capacity offline, U.S. refiners are running at full capacity to supply the U.S. and to help stabilize global fuel markets. The U.S. produces more diesel than it consumes, allowing us to meet domestic demand and to supply our allies in Latin America and Europe. U.S. crude oil exports have likewise helped keep refineries running in other parts of the world as disruptions occurred through the Strait of Hormuz.  

You have been asked by some to ban or limit the export of diesel to help lower prices, when in fact the opposite would occur. We, and indeed virtually every expert in the fuels market, fully agree with Secretaries Wright and Burgum that an export ban would force reductions in refining utilization, increase prices for gasoline and jet fuel, and lead to retaliatory actions from other countries.  

Exports allow U.S. refineries to balance their systems and maximize production. An export ban would require refineries to throttle utilization to reduce diesel production to equal domestic demand. Falling utilization would result in less gasoline and jet fuel production and higher prices for those products as well. Meanwhile, areas of the U.S. that import fuel (primarily the Northeast) would face higher prices for all fuels that would now be in even shorter supply globally. This could not come at a worse time for consumers as home heating oil season is about to begin.

Beyond price impacts, restricting exports would be a gift to our competitors. American energy dominance comes from being a reliable supplier to the world. If we pull back, other countries will step in, our influence will shrink, and our adversaries will gain ground. America’s energy exports are a source of economic and geopolitical strength.

While we understand the urge for a silver bullet, there are no easy answers. We encourage you to continue the positive steps this Administration has taken to tamp down energy prices. For instance, targeted Jones Act waivers have helped keep more than 50 million gallons of fuel in the U.S. and helped to back out imports. Longer term, continuing to work with global partners on bringing more fuel supply back to the market and reducing barriers to producing and moving energy is critical, and will help attract more investment in refining capacity.  

The U.S. energy industry is the largest and most efficient in the world, and an indispensable economic and national security asset. We urge you to help maintain this advantage and to reject calls to ban the export of our products.