(Chuck Muth) – The United States imports foreign cars from other countries while simultaneously exporting American-made cars to other countries. Ditto a wide variety of consumer products. One does not preclude the other.
Except when it comes to oil.
Back in the 1970s, after two gas crises triggered by the Mideast oil cartel, Congress passed a ban on exporting domestic U.S. oil. But that was long before modern-day oil exploration technologies, including “fracking,” pumped new life and an abundance of oil into the domestic American energy industry.
So the circumstances the precipitated Congress’ oil export prohibition over 30 years ago simply do not exists any longer. Nevertheless, 13 Democrats in the U.S. Senate recently inked an open letter to President Barack Obama urging him to maintain the ban.
But Margo Thorning, vice president and chief economist for the American Council for Capital Formation, inked a rebuttal that was published last week in The Hill which obliterates the restrictivists’ arguments.
For example, Thorning points out that, claims to the contrary, “crude oil exports would increase U.S. gross domestic product, foster new investment in the U.S. energy sector and generate opportunities for small and mid-sized businesses along the supply chain.”
In other words, repealing the oil export ban would likely create jobs, not kill them.
Thorning also disabused the “misconception” that ending the oil export ban would result in higher oil and gas prices here at home.
“The reality is,” Thorning wrote, “that repealing the ban on crude oil exports would allow domestically produced crude oil to enter the global marketplace where economic principles dictate an increase in the global supply of oil would put downward pressure on the international price of crude oil.”
In other words, repealing the oil export ban would likely lower prices, not raise them.
“The benefits of finally removing the 1970s-era ban on crude oil exports are undeniable,” Thorning concludes. “Despite counterproductive efforts, the energy sector is booming as a result of the era of domestic energy abundance that we live in. In order to keep this renaissance alive, we must throw our hat in the ring that is the global energy market, capitalizing on the extraordinary opportunity before us.”
What she said.