Posted on 08/29/2015 7:02:58 AM PDT by thackney
If the Iran deal goes through, the country’s oil exports will resume. Meanwhile, U.S. producers will still be banned from doing so. As Congress takes up the Iran nuclear deal next month, it ought to confront this paradox: The agreement allows the Iranians to do something Americans can’t—sell oil to the rest of the world.
Don’t get me wrong. I support the deal, under which Tehran would stop enriching weapons-grade uranium for the next 15 years in return for relief from economic sanctions. It’s not perfect, but President Obama is right that it’s better than what we’d have if his conservative critics got their way—no deal, leaving the Islamic Republic on the brink of acquiring nuclear weapons.
Still, freeing Iran to crank up its oil exports stands in stark incongruity to what’s happening here at home. Domestic oil production has soared by an amazing 68 percent over the past decade, yet we can sell very little of it abroad thanks to outdated laws banning U.S. oil and gas exports.
Passed during the energy crisis of the 1970s, these laws were intended to protect the nation’s then-dwindling oil and gas resources as a strategic reserve against supply disruptions like the Arab oil embargo. But the premise used to justify this deviation from our country’s free-trade principles—energy scarcity—has been shattered by America’s shale boom.
Now the United States is estimated to have a least a century’s worth of natural gas, and likely more. Last year, America momentarily passed Saudi Arabia and Russia to become the world’s biggest oil producer. And despite plunging oil prices, U.S. companies have managed to hold production this year fairly steady (over 9 million barrels a day) by becoming more efficient.
The global oil glut, however, is dampening U.S. energy investment, industry profits, and job creation. The forecast is for more of the same, owing to a combination of slow growth in China and Europe, falling U.S. demand and the return of oil-rich Iraq and Iran to world crude markets. Not that U.S. consumers will mind: White House economists estimate that the average family will save about $700 this year from lower gas prices.
Whether prices rise or fall, the United States won’t be able to reap the full benefit of its shale energy windfall so long as anachronistic laws lock our exports out of global markets. Yet the White House shows little urgency about repealing them. In fact, energy remains the great exception to Obama’s second-term push to open markets and expand trade.
Over fierce opposition from unions and globophobic activists, his administration is negotiating sweeping transpacific and transatlantic trade pacts aimed at boosting U.S. exports and growth. A clear commitment to lifting America’s export bans would make Obama’s efforts to curb foreign protectionism more credible and consistent.
It would also strengthen the U.S. economy. Opening foreign markets to U.S. gas and oil would stimulate more investment and production, especially as prices rebound. This would boost economic growth, create tens of thousands of jobs that pay decent, middle-class wages and have a moderating effect on prices at the pump, which are benchmarked to global crude prices.
Surging U.S. production already is reshaping the world’s geopolitical landscape, adding to America’s arsenal of “soft” power while undercutting the economic leverage of petro-states such as Russia, Iran, and Venezuela. U.S. net oil imports have been cut nearly in half, reducing our trade deficit and making our economy less vulnerable to supply disruptions and price shocks.
Allowing U.S. oil to flow into world markets also would enable our friends and allies to diversify their energy portfolio and reduce their dependence on unstable or unfriendly suppliers. Japan, for example, imports about 83 percent of its oil from the Middle East. European leaders, leery of the continent’s heavy reliance on Russian gas and oil, are calling on Washington to ease restrictions on U.S. energy exports, and to add an energy chapter to the Transatlantic Trade and Investment Partnership (TTIP) agreement.
The idea that America can at last achieve “energy independence” by hoarding its now abundant fossil resources is a strategic delusion. “If war in the Middle East, or the actions of a powerful regional hegemon seeking to blackmail the world should cut the flow of oil from the Middle East to Europe, India, China and/or Japan, the economic consequences to the United States would be enormous,” the historian Walter Russell Mead told Congress in recent testimony.
U.S. policy should aim instead at promoting energy security. In addition to diluting the ability of any resource-rich nation to manipulate oil prices or restrict supplies, rising U.S. exports would provide a politically stable and reliable source of energy and thereby help to make global markets more resilient against conflicts or natural disasters.
Opposition to lifting the export bans comes mainly from environmentalists, who fear that the glut of cheap gas and oil will delay the growth of costlier renewable energy options like wind and energy. This is a reasonable fear, but it’s best addressed by pricing carbon accurately, not depriving Americans of the economic and security benefits of energy abundance.
The export bans are likely to figure prominently in the coming debate on the Iran nuclear deal. A key lawmaker, Senate Energy and Commerce Committee Chair Lisa Murkowski (R-Alaska), is flagging the issue. “The general prohibition on exporting domestic crude oil amount to a de facto sanctions regime against U.S. producers,” declares a committee staff report.
President Obama can defuse such criticism—and strengthen the case for the deal—by leading the charge to restore free trade in energy.
Texans in Congress Again Target Oil Export Ban
https://www.texastribune.org/2015/08/27/higher-hopes-lifting-oil-export-ban/
A handful of Texas congressional delegation members say they have an antidote for the anxiety low oil prices have inflicted on the Texas economy: repeal a 40-year ban on exporting U.S. crude oil to the international market.
After returning to the U.S. Capitol this fall, they say they are determined to move the legislation to President Obama’s desk by Christmas.
But the nation’s capital is bracing for a frenetic fall. At best, Congress can expect an exhausting, four-month legislative slog through everything from Iran to abortion; at worst, the government could shut down. How such a charged atmosphere will affect the push for lifting the oil export ban is anyone’s guess.
As it stands, American companies may export refined petroleum products like gasoline or diesel fuel to the international market, but not crude oil. U.S. Rep. Joe Barton, R-Ennis, one of the members most invested in eliminating the ban, calls it the last vestige of energy policy from the 1970s oil shortage crisis.
“We’ve repealed every one of those except the ban on crude oil exports,” he said, saying he moved other pieces of legislation in 2005. “The only reason we didn’t repeal it then is nobody brought it up. I wish I’d repealed it back in 2005 because it would have sailed through.”
“It’s not perfect, but President Obama is right that it’s better than what we’d have if his conservative critics got their way—no deal, leaving the Islamic Republic on the brink of acquiring nuclear weapons.”
Like they will be anyway.
I don't read what idiots have to say.
This is President Obama’s Jihadist Stimulus package. 150 billion of freed up money when sanctions are dropped, billions more from the ability to freely sell their oil on the world markets. Obama has created more jobs for terrorists than he has for Americans. Too bad our idiot media will not ask our first pharoah in there best John Effen Kerry(who served in Vietnam if you didn’t know) How can you ask a man to be the first man to die for a mistake///
“Stopped reading here: Don’t get me wrong. I support the deal”
Yeah me too, the world has seen this kind of insane weak and desperate appeasement before:
It’s not perfect, but Prime Minister Chamberlain is right that it’s better than what we’d have if his conservative critics got their way—no deal, leaving the German Government on the brink of acquiring the whole of Czechoslovakia.
Warren Buffet just purchased a LARGE amount of Phillips 66 stock. I expect the export ban to be lifted shortly.
A better plan would be to use our own oil, stop buying foreign oil and let them pound sand. I wouldn’t mind $3/gal gas if that were the case.
Exporting the expensive light sweet crude while importing the cheaper heavy sour our refineries are designed to use is better for lower US prices.
Don’t force refineries to use more expensive types of oil and less efficiently.
I was just saying I wouldn’t mind pay a little more at the pump if it meant not giving money to those that hate us.
Keystone XL would be a better source of that heavy crude...
More rail capacity to the East and West Coasts for light sweet.
Remove the strangling Jones Act that makes it cheaper to bring oil to New Jersey from the Middle East than from the Gulf Coast.
Like the export ban, the government is the source of the problem, not the solution to better Independence from OPEC.
That's true, like President Reagan said, government isn't the solution to the problem,government is the problem.
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