Gas prices are the lowest Americans have seen in quite some time. This is partly due to the basic principle that as supplies rise prices fall. And in the past few years we have seen supplies of both oil and gas increase substantially in this country, as we are using new technology to reach energy resources that were previously unavailable to us. Add in discoveries in shale formations across the country and we can see how truly blessed we are.
What many may not know is that America recently became the world’s top producer of natural gas, and soon the U.S. may pass Saudi Arabia in oil production. This is a significant turn of events that very few people could have imagined over the past 40 years. During the oil crisis of the 1970s, we found out just how dependent we were on foreign oil. Americans lined up at gas stations, canceled vacations and watched gas prices rise, along with the cost of just about every product that required transportation or depended upon petroleum.
Yet now with low prices and abundant resources, our policies should reflect this changing landscape of energy development. A positive step is that just last week, Senate Finance Committee Chairman Sen. Ron Wyden (D-Ore.) wrote in a letter to Secretary of Energy Ernest Moniz that “some policy provisions put in place as recently as 2007 are now at best irrelevant, or at worst detrimental, to national environmental and economic goals.”
In that case, the ban on crude oil exports has certainly passed its expiration date.
But there are glimmers of good news coming from Washington, D.C. Earlier this year, the Department of Commerce allowed two companies to export condensate oil (the result of gas from shale deposits that condensates into ultralight oil at the surface). And in another small step forward, it is also seeking input through questionnaires from other companies that are interested in exporting condensate oil.
This should be a harbinger of things to come. The world is very different than it was in the 1970s. One sign that the time is right for crude oil exports is the number of emerging studies showing the benefits to the United States. In short, such a move would boost the economy, grow jobs, help keep gas prices low and strengthen the energy security of America and our allies.
For example, the Brookings Institution found that lifting the ban soon could benefit our gross domestic product by between $600 billion and $1.8 trillion over the next 25 years, depending on how quickly the ban is lifted. It could reduce unemployment by about 200,000 annually from 2015 to 2020. Just imagine what an impact that would have on the American economy and the daily lives of families. Taxpayers would also reap the benefits by people going back to work and not collecting unemployment benefits.
One might think that exporting crude oil could negatively impact gas prices in America, but the opposite is true. According to Lawrence H. Summers, president emeritus of Harvard University and former secretary of the Treasury Department under President Bill Clinton, exporting oil will reduce the price because “all oil is not the same … if you want to help American consumers consume gasoline at lower costs, you want there to be more oil exports.”
The Brookings study found similar results – and points out that the more abundant the exports, the greater the fall in the price at the pump.
Beyond pricing and economic benefit, the bottom line is that exporting crude oil is just the right thing to do. We are a country based on principles of free trade, and we lose credibility when we hold on to outdated rules that contradict these principles. All Americans and taxpayers benefit from a healthy and expanding economy
In addition, by exporting crude oil, we would have the power to help our allies should their primary supplies face disruption. We can provide our allies with oil to meet their growing demand, while lessening their (and our) dependence on energy from countries that don’t always have our best interests at heart.
There simply are no good reasons in this day and age to maintain the last century’s policy of banning crude oil exports. For reasons of economic development, job growth and energy security, the United States should move to lift the crude oil export ban as quickly as possible.