With one action, the U.S. Congress could reduce the nation’s trade deficit, grow U.S. jobs, increase revenue and assure more U.S. influence across the world.
But because of Congressional inaction, the export ban remains in place 40-plus years later. The ban was enacted by Congress following the 1973 Arab oil embargo. That embargo created a domestic energy crisis, causing shortages, lines for gasoline and mayhem across the U.S.
For most of the period since, the U.S. remained generally an importer of energy. In those circumstances, the ban was not a cause for concern. Times are different now.
Thanks to new technology that allows oil producers to extract oil from previously hard to get shale sands, the U.S. is now the largest petroleum producer in the world, recently surpassing Russia and Saudi Arabia.
While exporting crude oil is banned, petroleum products refined from crude, such as gasoline and diesel fuel, can be. In fact, in 2014 the U.S. exported $147 billion worth of refined petroleum products. The U.S. also exports coal, natural gas and natural gas liquids – making crude oil the only form of energy banned from export.
Lifting that ban would not just help U.S.-based oil producers create more American jobs and revenue, but would give the U.S. considerably more non-military influence in foreign policy.
“The pathway to achieving U.S. goals also can be economic,” wrote former U.S. Central Intelligence Agency director and Defense Secretary Leon Panetta, along with former National Security Advisor Stephen Hadley, in the Wall Street Journal recently.
“The U.S. can provide friends and allies with a stable alternative to threats of supply disruption,” [from Russia] the two wrote. “This is a strategic imperative as well as a matter of economic self-interest.”
The authors also wrote to dispel the common fear that exporting crude oil would cause domestic gasoline prices to rise.
They pointed to several studies that show oil exports would actually put downward pressure on prices.
“Too often foreign-policy debates in America focus on issues such as how much military power should be deployed ...” Panetta and Hadley wrote. “Ignored is a powerful, nonlethal tool: America’s abundance of oil and natural gas. The U.S. remains the great arsenal of democracy. It should also be the great arsenal of energy.”
Congress should act to remove the ban on oil exports.