During the past several years, our nation has left behind decades of energy scarcity and has become a worldwide leader in energy production. Fossil fuels have led the way and will continue to take the lead in providing most of the world’s energy needs well into this century. President Barack Obama’s Energy Information Administration estimates 25 years from now, fossil fuels will account for 80 percent of the country’s energy consumption. Today, the U.S. is the No. 1 producer of oil and natural gas in the world. We should take full advantage of this unique global energy leadership position.
The U.S. energy renaissance is endangered by two key factors: 1) OPEC manipulation by predatory pricing practices to drive U.S. producers out of business, and 2) The combination of restricted U.S. refining capacity and an archaic export ban on U.S. crude oil.
Lifting the ban on U.S. crude oil exports would add to GDP growth, reduce the U.S. trade deficit, de-intensify the Middle East’s strategic importance, end OPEC dominance, reduce European allies’ dependence on Russia, put Americans back to work here, lower and stabilize gasoline prices for U.S. consumers and more. Harnessing the benefits of America’s energy renaissance will require lawmakers and regulators to re-examine policies that were enacted long before the U.S. transitioned from a period of energy scarcity to our current position of energy abundance.
In the long term, any oversupply of unrefined crude oil might discourage more energy production here at home. Lifting the crude oil export ban would allow U.S. oil producers to stay in the game. Even if margins are low, revenue from new global markets would allow U.S. producers to compete for a share of the world market and narrow the price differential between global oil price and that received by U.S. producers. So, if U.S. crude oil can reach the global market, then consumers should begin to see higher global supplies, more production and consumer-level benefits. We must lift our own self-imposed crude oil export restrictions.
In a domestic market awash with oil, keeping the 1970s-era crude oil export restrictions in place discriminates against U.S. producers and threatens investment in new supply, thereby jeopardizing economic, security and trade gains from the energy sector. Policymakers should lift the crude oil export ban to bring export policy in line with present market circumstances, to promote free trade and responsible growth in the energy sector, and to reap the geopolitical advantages of having a larger and more flexible role in the global oil market.
We are in a new era of American energy, but our energy trade policies are stuck in the 1970s. According to recent studies by the Energy Information Administration and others, lifting the 1970s-era restrictions on U.S. crude oil exports would lead to further increases in domestic oil production, resulting in lower gasoline prices while supporting more than 300,000 additional jobs this decade. The additional crude oil supply in the global crude oil market would lower gasoline prices by an annual average of 8 cents per gallon, according to the studies. It is time to let free trade unlock more of the benefits of our energy abundance for U.S. consumers and further strengthen our position as a global energy superpower.
