The Patriot Post® · Oil Exports Endorsed by IEA

There may be a surprising bright spot in this era of Big Government and regulation; even more surprising is the affected industry and the source of the support. Dr. Ernest Moriz, Barack Obama’s new Energy Secretary, has indicated a willingness to reevaluate the restrictions placed on U.S. oil exports during the 1970s. In December, Moriz appeared to be much more receptive to lifting these restrictions than his predecessor, Stephen Chu.

Moriz’s position received additional support from the International Energy Agency this week. The IEA recently acknowledged that American oil production has surpassed even the best estimates. Indeed, reports the IEA, “U.S. crude oil supply in 2013 registered the fastest absolute annual supply growth of any country in the last two decades, rising 15 percent in 2013.” The IEA added that increased exports would help meet greater world demand. However, while both Moriz and the IEA wield considerable power, it’s up to Congress and/or the Commerce Department to remove the restrictions.

In the meantime, American companies would love to take full advantage of this economic opportunity. Since the U.S. has been the world’s largest importer of oil for decades, its refineries are outfitted for the heavier crude from Mexico and the Middle East. Oil companies have been renovating their refineries to accommodate the lighter, higher-quality American shale oil, but if the export restrictions are not lifted, they won’t be able to sell their oil outside the U.S. and Canada. These restrictions will drive prices down and – since producers of shale oil say prices must remain between $80 and $90 a barrel to be profitable – hamper the industry. For now, all we can do is wait to see whether this typically anti-business administration will move toward a freer market.