Great news for American consumers who yearn for lower gas prices (I think that’s all of us): help could soon be on the way.
Last week, the U.S. Energy Information Administration, the analytical division of the Energy Department, released a report on the effects of lifting the nation’s four-decade-old ban on oil exports. Before we go any further, read that last sentence again; for the past forty years, American oil companies have been forbidden from selling their products on the global market.
This policy originated in the mid-1970s, when American demand for oil far outweighed available supplies. In an effort to stabilize domestic prices, American lawmakers banned the exportation of crude oil.
The prohibition was shortsighted at the time of its implementation, and it is mind-boggling that it remains in place forty years later. But times have changed, and American innovation has made the policy less tenable than ever before.
Today, American energy companies pump 9.3 million barrels a day, which is 70% higher than just five years ago. Commercial crude stockpiles of oil and natural gas are approaching all-time highs. And the share of foreign-sourced petroleum consumed in the United States has fallen to 27%, the lowest since 1985.
Introducing American oil and gas to the global marketplace would have astounding effects on the economy. One study, released earlier this year, found that lifting the ban would grow jobs, investment, pay, profits, and tax revenues, and would increase America’s GDP by $86 billion. While supporters of the ban contend it keeps prices low, their argument holds very little weight in practice: adding American oil to the global marketplace would increase the global supply (which drives prices more than any other variable), invariably dropping prices for consumers not just domestically, but across the globe.
In a time of continued sluggish growth, America has a fantastic – and fantastically easy – opportunity to pump its way to prosperity. If ever there was such a thing as a policy slam dunk, lifting the archaic ban on American oil exports would be it. Hopefully our lawmakers see it as such.
What do you think? Should we give it a shot? Feel free to share your thoughts and ideas on our Facebook page, and learn more about energy independence here.