The Patriot Post® · A New Export Commodity?

A legacy of the 1970s oil crunch is a restriction placed on most oil exports. Put into place by Congress through a series of bills in the wake of the first major energy crisis, the laws require would-be exporters to receive special permission from a bureau of the Commerce Department. But the dam may be ready to break, as surging supplies of domestic oil provide the opportunity for suppliers to expand the market beyond the current level of just 95,000 barrels a day, which mostly goes to Canadian refineries.

Ironically, one problem with our current system of refineries is that they are set up for the heavier, lower-quality crude imported from Mexico, Venezuela and the Middle East. American crude oil is considered to be lighter and of a higher quality, making it desirable in other markets.

The drive to open up the export market got an unexpected boost from Energy Secretary Dr. Ernest Moniz, who told reporters that the issue “deserve(s) some new analysis and examination in the context of what is now an energy world that is no longer like the 1970s.” This approach, never mind the very suggestion of helping the domestic oil industry, stands in stark contrast to the heavy emphasis – and well-documented failed subsidies – on renewable energy under Moniz’s predecessor, Dr. Steven Chu.

Obviously the export of American crude would have an effect on the oil market, but experts can’t be sure how that would affect domestic gasoline prices. Opponents of lifting the ban claim gasoline prices would rise due to shorter domestic supplies, but until American refineries are retrofitted to accommodate better-quality oil it’s probable that lower overall crude oil prices will benefit American motorists. Furthermore, making America an export player in the global oil market can provide a counterweight to the geopolitical force of OPEC.

While the Energy Department cannot change the rules enacted by the Commerce Department, Moniz expressed the willingness to provide technical analysis on the issue. Congress can also pitch in by revisiting its four-decade old legislation and repealing it to embrace the new reality of America the bountiful.