A federal ban dating back decades that restricts exports of crude oil is suddenly in Washington's crosshairs. Should we get rid of it?
Since 2008, U.S. oil production has increased 56 percent, and our imports have correspondingly fallen to the lowest level since the mid-1990s. In response to this oil boom, refineries have been exporting at record amountsgasoline, diesel, and other products refined from oil, which do not face the same federal restrictions as crude oil.
In response to this trend and the broader oil and natural-gas boom, companies including Exxon Mobil and Continental Resources are calling on Congress to lift the ban. Newspapers like The Washington Post, Chicago Tribune, Bloomberg News, and Financial Times have made similar statements.
Calls to preserve the ban appear to be fewer. Senate Foreign Relations Committee Chairman Robert Menendez, D-N.J., says lifting the ban would benefit only major oil companies and could end up hurting U.S. drivers in the long run with higher gasoline prices.
The ban dates back to the 1973 OPEC oil embargo, which sent domestic oil prices soaring. In the wake of that incident, Congress decided to restrict exports of crude in most cases as a means to limit future oil-price shocks. In the few cases exports are allowed—mostly to Canada—companies must obtain a specific license from the Commerce Department in order to do so.
What are the pros and cons of lifting the ban? Is there a middle ground between leaving it as-is and eliminating it altogether? What should be this debate's driving factors, such as gasoline prices and economic growth? How could lifting the ban affect the environment, including, potentially, encouraging more drilling?
Do you think Washington has the political appetite to change the law? Or, will this be a debate with a lot of talk but no action?
Should Washington Lift the Oil Export Ban? The short answer is that such a decision must be accompanied by strategic changes in U.S. policy.
Oil should be viewed as a valuable commodity, like corn, wheat, textiles, and manufactured goods; all essential to our economic well-being. Talk of increasing exports for any given commodity naturally leads to concern that costs will rise as goods or resources needed here at home become scarce.
The oil and gas sector is no different, and this is where the U.S. needs some strategic planning and policy decisions. We need to do more to ensure we have abundant oil and natural gas resources not just to meet our needs, but to help supply the world as well. To ensure that this energy renaissance continues we must open up more of our offshore areas to oil and natural gas exploration.
The onshore natural gas boom has put us on the edge of being able to be an energy exporter, but that effort needs to be complemented by a consistent, reliable energy program that will allow for exploration in federal waters in the Atlantic Ocean, the Eastern Gulf of Mexico, the Pacific Ocean and offshore Alaska.
Having multiple sources of energy will not only make the U.S. more energy secure, but will provide the cushion we need to be able to export vital energy to the world.