The New York Times released an article droning on about the money oil executives have spent pushing for the ban on crude oil exports to be lifted.
In a continuously negative tone, the article points out that most information on the topic comes from sources paid for by energy companies, and names a number of legislators, from both parties, who support the lift as having “long standing ties to the industry” because they are from states that produce oil.
It does very briefly point out that the ban is opposed by the steel workers unions (representing refinery workers and environmental groups), and the refinery execs themselves who make quite a lot of money on the glut of domestic crude oil.
But what about the American people? Do they stand to gain or lose by this policy?
The individual American stands to gain enormously from an open energy export policy because of its effect on two things—the American Economy and American Foreign Policy—including its effect on American allies.
American crude oil production (like natural gas production) has grown exponentially in recent years due to innovations like hydraulic-fracturing and horizontal drilling. There was a time when U.S. oil production couldn’t keep up with local demand, but that time has since passed, and American production continues to grow.
Exporting crude oil will impact world markets positively for the American consumer. Gas prices are based on the price of crude oil not in the U.S., but on the world market. Once we begin exporting crude oil, that price will drop, and so will domestic gasoline prices. Lower gas prices mean a boost for every American citizen, but especially for poorer citizens, including Millennials. Lowering energy prices is one of the best things we can do to help those with less resources. High energy prices are always a regressive tax on the poor.
High energy prices have created a phenomenon called “energy poverty” in wealthy countries. Often this is associated with electricity and the incapacity to pay for the necessary energy to heat or cool homes. But it can also refer to the lack of resources to pay for gasoline to get to work.
Energy poverty exists in the United States, but it is especially rampant in Europe and the United Kingdom. Last winter in the UK alone 15,000 people died, and numbers from previous years are, in some cases, double that. To end fuel poverty both within the U.S. and abroad, regulations and restrictions should be relaxed, and oil and natural gas should be allowed to reach the world market.
Environmentalists have long fought against this policy claiming that “renewables” are just as good as fossil fuels. That claim is a patent lie as can be proven by the fact that countries that have switched to wind and solar fastest are the ones with the highest rates of energy poverty. It’s time to stand up against these lies that hurt the vulnerable the most. Affordable energy empowers the poor.
In addition to the beneficial impacts for those in poverty, allowing oil producers access to the world market will incentivize energy sector growth, which will mean a very large boost to job creation with an estimate of 394,000 to 859, 000 new jobs being created every year. States like Texas and North Dakota have seen huge economic boosts since the recent energy revolution began, including significant job creation and higher wages, and that could be repeated in many other states.
Changing this particular policy will also increase U.S. Gross Domestic Product (GDP), the main indicator of the condition of the American economy. The Brookings Institute estimates the boost to GDP could be from $550 billion to $1.8 trillion from 2015-2039, while The Aspen Institute estimates $105 billion to $165 billion from 2017-2021, ICF International estimates $10.1 billion to $27.1 billion from 2015-2035, and IHS estimates $86 billion to $170 billion from 2016-2030. The ranges represent lower and higher estimates of the amount of crude oil exported.
Exporting energy like crude oil also strengthens America as a world power. Major energy producers hold significant sway over those countries that consume that energy—putting consuming countries at risk of energy and economic destabilization or warfare if the producing country is hostile. The most recent and obvious example is Russian influence on Ukraine, Poland, Germany, and other European nations due to those countries’ reliance on Russian natural gas. An older example is the 1974 oil embargo—the reaction to which brought about America’s current export ban.
American technological ingenuity has created a situation in which we have the opportunity to lower world oil prices, boost our own economy, help those struggling in poverty—both at home and abroad—and stabilize energy markets and remove Russia’s and the Middle East’s capability to blackmail or bully consumers with threats of shutting off access to oil. A safer world for American allies means a safer world for America herself, and that means a safer world for American citizens, and American soldiers. A free-market policy is a win-win for everyone.