As I mentioned last week, 2013 has marked the year of the United States’ biggest acceleration in domestic oil production, ever, and we’re not too far off from bypassing our own record for total crude-oil output — which makes it rather inconvenient that the United States is still operating under the anti-free trade policies of a bygone era of artificial scarcity. Back in the 1970s, in the midst of a tussle with the Middle East, the U.S. enacted an embargo on any exports of crude oil with the misguided goal of enhancing America’s domestic energy security. The shale revolution recently brought on by hydraulic fracturing, however, means that we’re newly awash with oil and gas products — and the only way to take full advantage of that boom is to unleash American competitiveness on the global market and allow energy companies to reap the economic benefits.
The Chicago Tribune gets it, and they broke it down in a useful editorial this morning:
U.S. crude can be exported only if the federal government deems the shipments consistent with the national interest. That vague legal standard has in effect made it impossible for oil producers to export crude, except a small amount sent to Canada, although exports of gasoline and other refined products have been soaring lately.
Like free trade in general, selling American oil overseas would be good for our economy. It would make the oil market more efficient, encourage a build-out of the U.S. energy network and stabilize prices over time for consumers.
This is no small matter: By some estimates, drillers could be generating billions of dollars in annual revenues from exports within a few years if the ban were lifted. That additional business would translate into job creation as the oil industry invested in refineries and transportation networks to handle the light, high-quality crude being produced domestically. …
Lifting the export ban also would demonstrate Washington’s commitment to free and fair commerce as trade negotiations get rolling with Europe and Asia.
There have already been avowals both for and against the lifting of the embargo, but the Obama administration has tentatively hinted they might be open to reexamining the issue — and with energy companies newly minted access to more crude oil than they can sell or refine on the strictly American market, they’re going to pushing this issue bigtime in 2014.
Join the conversation as a VIP Member