Political pressure is building to repeal the 1979 ban on U.S. exports of crude oil to the rest of the world. I blogged on that issue recently in Inside Sources, which was picked up by Orangeburg, South Carolina’s Times and Democrat. Other blogs on that policy issue are forthcoming.
Several reasons for lifting the export ban are evident to anyone who grasps the benefits of free international trade, but the most compelling of those is that the United States now produces more crude oil than it has the capacity to refine, while the refining capacities of other nations exceed their domestic oil supplies. The potential gains from trade could not be more obvious to anyone who has taken Econ 101.
President Jimmy Carter signed the Export Administration Act in 1979, a time when OPEC ruled the global crude oil market. Now that the United States is the world’s leading oil producer, it makes no sense to ban exports of crude oil to nations other than Canada, which is required to process all U.S. crude into gasoline and heating oil and to consume all of it in what some people other than me refer to as our 51st state.
World prices will be lower and less volatile if we can participate directly in the international oil marketplace.