The United States is awash in crude oil and technology, which is allowing the oil industry to find more oil at less expense. Allowing exports of this oil would yield economic and national security benefits and remove an outdated barrier to the free market, helping to advance the cause of liberty in the U.S.
According to media reports, however, champions for lifting the crude export ban seem to be in a negotiating mood. In exchange for lifting the ill-fitting 1970s ban, some in Congress are considering a list of terrible energy policies to include in the $1.1 trillion omnibus spending bill or the tax extenders package.
Such trades are completely unnecessary and counterproductive. The oil export ban will likely be lifted regardless because the benefits of reform are something both Republicans and Democrats can agree on.
- The U.S. is now the world’s largest oil producer, thanks to innovation in drilling techniques. U.S. oil production has skyrocketed from some 5 million barrels of oil per day in 2006 to over 9 million barrels per day at present. Much of this oil remains pent up without access to international markets. Lifting the export ban would allow U.S. companies to better compete with the likes of Saudi Arabia and other oil producing nations which have flooded the market and pushed oil prices to historic lows.
- According to a Government Accountability Office (GAO) review, gas prices could fall 1.3 cents per gallon to as much as 13 cents per gallon. That’s money American businesses and families can spend or save elsewhere. Likewise, the economic ripple effect could be massive, creating some 300,000 jobs and $38 billion in gross domestic product by 2020, according to ICF International.
- Liberalizing U.S. oil markets would put decisions in the hands of more flexible and responsive marketplaces rather than in those of Washington officials, opening up the opportunity not only for new markets but also for innovation and competition that ultimately benefits U.S. consumers.
- Enabling U.S. companies to compete in the international marketplace dilutes the ability of countries like Russia to leverage energy markets to bully smaller nations and create political pressure.
Make no mistake: lifting the ban is the right thing to do. But no one in Congress should trade one good policy—eliminating the oil export ban—for concessions that sign Americans up for decades of bad energy policy. On the list of energy policies being considered as “fair trades” are measures to:
- Reintroduce the wind and renewable energy production tax credit, which expired last year but is still diverting $16.6 billion tax dollars over the next few years even if Congress does nothing, according to the Joint Committee on Taxation. An extension would cost billions more.
- Re-extend the solar investment tax credit, which even some in the solar industry believe needs to go and only partially masks the real damageS. tariffs on solar equipment do.
- Permanently renew and fully fund the Land and Water Conservation Fund, which has lost its original purpose and no longer supports states or good environmental management.
Whereas liberalizing U.S. oil exports would reopen an industry and Americans to the benefits of the free market, it appears too many in Congress are willing to extort good policy for the sake of grabbing special favors for their pet projects and subsidies in a must-pass bill. At the end of the day, that would be nothing more than an expensive plate of tripe with a little sugar sprinkled on top.