Lifting a ban on crude oil exports from this country would more than likely be a boost to the economy and lessen our reliance on foreign oil.
Yet the Obama Administration says it will oppose a measure by House Republicans that would end a ban that dates to the 1970s and no longer makes sense.
According to the White House, it’s the Commerce Department that should decide whether to lift the ban, not Congress.
But with no clear signal from the White House that the Commerce Department will ease the ban anytime soon, the House Republicans are right to pursue a legislative fix.
“If ever there was a time to lift the oil export ban it’s now,” House Majority Leader Kevin McCarthy told a crowd gathered at a Houston Chamber of Commerce event this week. He hopes to bring the measure to a vote later this month, setting up a potential showdown with the Obama administration later in the year.
The ban was enacted in the 1970s to conserve domestic reserves, among other reasons. Fast-forward to 2015 and oil production in this country is at record levels. A dozen oil companies want to open foreign markets to crude oil sales from this country. The companies believe it would stimulate the economy and streamline U.S. petroleum production.
But as The Wall Street Journal reports, some domestic oil refineries and consumer groups claim a lifting of the ban would raise the price of gasoline at the pump for millions of American consumers. The claim is debunked by the government’s U.S. Energy Information Administration, which released a report that found a lifting of the ban would not increase prices at the pump and might actually lower them.
That conclusion is shared by the Council on Foreign Relations, a nonpartisan think tank that promotes free trade. In a policy paper, it points out that the United States has grown its oil production by more over the past five years than any other country despite a decline in oil consumption.
“Letting drillers reap extra profits from selling crude oil overseas, if the market dictates, would provide greater incentives for drilling, stimulating new supply,” the paper said. “As it stands, the primary beneficiaries of the export ban are a few fortunate oil refineries in the central United States — not U.S. consumers.” A lifting of the ban would lead to greater investment in domestic oil production, creating more jobs in the industry and in the support industries. It would also position the United States for greater security if foreign oil supplies were reduced or cut off.
The export ban only applies to crude, not the refined gasoline and diesel that can be shipped to overseas markets, making the ban all the more arbitrary. Exports of refined oil products have grown along with the nation’s production.
There’s no reason to believe the crude exports wouldn’t bring similar financial gains. The Council on Foreign Relations paper says a lifting of the ban could “generate upward of $15 billion a year in revenue by 2017.”
Passage of McCarthy’s measure in the House is likely, but it faces a tougher road in the Senate. A previous effort this year by a Senate panel to lift the crude export ban failed to gather a single vote from a Democrat.
The phenomenal output of oil in this country in the past several years has shown the many ways this country benefits from domestic production. Opening the door to crude exports is the logical next step.