Ban on U.S. Oil Exports No Longer Makes Sense
As a 17-year-old, I had a job pumping gas at a nearby service station. I can still remember the long lines and the angry expressions of the drivers. The Arab oil embargo of 1973, in response to U.S. support of Israel during the Yom Kippur War, created a shortage that hit close to home for every American. The price of oil and gasoline jumped dramatically, dealing a blow to the U.S. economy. Oil had been used as an economic weapon by hostile foreign governments, and U.S. officials vowed never to be so vulnerable again. In 1975, Congress passed the Energy Policy and Conservation Act, which banned most exports of U.S.-produced crude oil and created a strategic petroleum reserve for emergencies.
That was a long time ago. The tables have turned. Thanks to new drilling techniques, North America is arguably the biggest energy producer in the world. It’s time for America’s energy policy to reflect the new political realities.
Pro-business organizations, including the Steel Manufacturers Association, support the exporting of U.S. crude oil for its many economic benefits. The American Petroleum Institute estimates that lifting the ban would create 300,000 jobs and add $38.1 billion to the economy. Last month, the House approved H.R. 702, a bill that would lift the ban. Comparable legislation is pending in the Senate.
“Today, the U.S. is a world-class leader in the production of oil and other energy resources. We have an opportunity to leverage these resources in foreign markets to the benefit of the domestic economy and its workforce. The export ban serves as an impediment to free and fair trade. Energy companies are unable to invest and produce to the extent that they would in an open market,” says SMA President Philip K. Bell.
The domestic steelmakers represented by SMA have been hard hit by collapsing energy prices this year, which have sharply curtailed drilling in North America’s oilfields. Compounding their woes is competition from imported steel pipe and tube products, much of which they contend is unfairly traded.
“We do not expect the U.S. to become a major crude oil exporter overnight. However, we are well on our way to energy self-sufficiency. It’s time to address this outdated ban and advance a policy that will create jobs in the U.S., increase the demand for U.S. steel products, and increase U.S. crude oil exports,” says Bell.
Oil is no less a political football today than it was 40 years ago. The Obama administration is opposed to lifting the ban for the same basic reason it opposes the Keystone XL pipeline—it wants to reduce the country’s dependence on fossil fuels. Republicans generally support oil exports, but are reluctant to back the change too loudly in an election year. Neither party wants to take the blame if such a policy shift were to raise gasoline prices for voters.