Posted 10/20/15 (Tue)
By Neal A. Shipman
After 40 years, the United States is finally getting closer to lifting a ban on exporting crude oil. The lifting of that ban could lead to lower gasoline prices for Americans, increase jobs in the country, and provide a much needed boost to this country’s oil industry.
U.S. firms have been unable to export crude oil since 1974 when President Gerald Ford put the ban in place in response to an oil embargo by Arab OPEC nations against the U.S. for its support of Israel in the 1973 Arab-Israeli war.
For 40 years, the United States has been unable to export oil, with the exception of oil to Canada, and oil that was produced in Alaska. But today a lot has changed both domestically and internationally that makes repealing that ban the right decision to make.
First, because of new technology, such as hydraulic fracturing, America has become a leading producer of oil and natural gas. As a result, the United States is not as reliant on foreign countries for its energy needs as it once was. The United States is now producing enough oil that it can afford to sell some of its surplus to its allies instead of forcing these friendly nations to buy all of their oil from Russia or OPEC.
Second, the United States does not have the capacity to refine the oil that this country is capable of producing, which hurts our domestic energy industry. As a result, the United States oil industry is reducing the number of drilling rigs operating and slowing down production from existing wells.
To compound the problem, currently United States refineries are set up to process the heavy crude oils that come from Mexico, Venezuela and other foreign countries not the light, sweet crude oil that is coming from places like the Bakken in North Dakota.
If producers were able to export their excess crude oil, they would likely increase production, which would lower global oil prices.
Third, studies have shown however, that ending the ban would help the U.S. economy by adding an estimated 630,000 jobs, increase manufacturing and boost the gross domestic product in the long-term.
In today’s environment, it makes sense that the United States be able to compete with other foreign oil producers on the world market.
Which is why it was encouraging to see the U.S. House of Representatives overwhelmingly approve the repeal of the ban.
But even with the passage of the repeal by the House, the bill still has to get through the U.S. Senate before it faces a promised veto by President Obama.
Why the Senate and the president of the United States would oppose the repeal of the ban is a perplexing question.
Are they opposed to providing gasoline price stability to United States consumers, increasing the number of American jobs, and giving a much needed boost to the American economy and to the nation’s oil industry?
No good argument can be made for keeping the ban on exporting U.S. oil in place. After having a 40-year ban on exporting United States’ oil, it’s time to allow American energy companies to compete with foreign oil producers. It’s time for the ban to go away.