It Is Time to Lift America's Crude Oil Export Ban
April 1, 2015
America's ban on crude oil exports was introduced to help enforce price controls in the fuel-hungry 1970s. It keeps American crude around $10 below the world price. Supporters of the ban argue that it not only keeps prices low, it protects jobs and helps national security by promoting self-sufficiency.
The ban undermines America's moral authority at the World Trade Organization. Free trade in crude would boost output, investment, jobs, pay, profits and tax revenues - and Gross Domestic Product (GDP) by $86 billion. Cash-strapped oilmen would like to sell their product abroad and are lobbying to lift the ban. Free trade would not raise petrol prices; most likely, they would slightly fall. American crude-oil exports would also hurt hostile petrostates such as Russia and Iran.
Some refiners would be sorry to lose their artificially cheap raw materials, but they would accept instead what they call a "comprehensive" policy, meaning laxer rules on renewable fuels, and a change in the Jones Act, which bans foreign ships from carrying cargo between American ports. It delights ship-owners and unions, but imposes a hefty cost on anyone wanting to send a tanker from a refinery on the Gulf coast to a port in the north-east.
Source: The Economist, "America's crude oil export ban does more harm than good," Business Insider, March 29, 2015.
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