Allowing the export of U.S. crude would help level the playing field against foreign producers that have a lock on refining capacity in America, oil billionaire Harold Hamm said Monday—a move he argued would lower prices for consumers.
A longtime advocate for lifting the ban, Hamm described the problem facing U.S. oil companies during a CNBC "Squawk Box" interview.
In the late 1980s, foreign producers from Venezuela, Mexico, Saudi Arabia and Canada bought refineries on the cheap in the U.S. "when it looked like we had run out of oil," said the founder of Continental Resources.
Since then, he added, they've configured "two-thirds of our refining complex" to process their heavier type of oil, which contains a higher percentage of impurities, rather than the lighter crude produced in the U.S.
"With the oil renaissance that's come about here in American due to horizontal drilling, we have the resource developed and we should be exporting," Hamm said. Exploration in the Bakken Shale rock formation, which occupies about 200,000 square miles in North Dakota, Montana and Canada, has been at the leading edge of that renaissance. Continental Resources is the No. 2 producer in the Bakken.
In a Wall Street Journal op-ed, Hamm argued that lifting the U.S. oil export ban would lower prices for Americans:
"Exporting oil would not drive up prices at the pump. American drivers buy refined products, which the U.S. already exports. Many studies—from a range of institutions and government agencies, including the Congressional Budget Office and the Energy Information Administration—have shown that lifting the export ban could actually lower gas prices."
Appearing with Hamm on "Squawk Box" Monday, Sen. Heidi Heitkamp, D-N.D., said the export ban puts artificial restrictions on the market that distort prices—pushing back against critics who say a repeal would lead to higher prices.
"I don't know in what world increasing the global supply is actually going to raise the price," Heitkamp argued. "The more supply we can get into the marketplace, especially into Europe, the lower the international price is going to be."
"The price that our refiners are pricing their refined product on is the international global price," represented by costlier Brent crude not U.S. oil's West Texas Intermediate yardstick," she added.
"If you can sell the U.S. crude at a global price and eliminate that artificial differential ... it would increase the cash flow for companies like my companies," said Ryan Lance, chairman and CEO of No. 7 Bakken producer ConocoPhillips. "Reinvestment would go back into the business and drive more production down the road," he told CNBC.