As Americans dust off their Santa hats and untangle holiday lights, lawmakers are scrambling to address a laundry list of items before wrapping up the 114th Congress. The wish list of must-pass legislation before years end range from refugees to the ongoing battles over our nations healthcare system. But one issue of paramount importance to our nations future that must not get lost in the legislative shuffle is ending the ban on crude oil exports.
Established 40 years ago, Americas policy banning exports of domestically produced crude oil other than to Canada was meant to help combat the perils of the Arab Oil Embargo. Since then, new technology has allowed the United States to utilize its previously untapped natural resources and become the worlds leader in oil and natural gas production. Unfortunately, the outdated export ban undermines Americas ability to take advantage of the economic and national security benefits flowing from the shale revolution, and ultimately threatens our nations leadership in the global energy market.
It is undisputed that the oil and gas industry is a leading contributor to Americas economy. Last year alone, the industry added $1.2 trillion to U.S. gross domestic product (GDP), impacting businesses well beyond those directly tied to the industry. However, owing to tumbling crude oil prices and stockpiles reaching all-time highs, fossil fuel production is falling dramatically. The number of active U.S. drilling rigs has been cut considerably and 48,000 jobs have evaporated since November 2014all while leaders in Washington continue questioning whether or not to lift the ban.The domestic benefits of ending the ban are significant. Multiple studies have confirmed that crude oil exports would bolster U.S. GDP, speed job growth, and maintain or even reduce todays low fuel prices. Specifically, the Brooking Institution concluded that eliminating the ban on crude oil exports would inject from $600 billion to $1.8 trillion into Americas economy. Even President Obamas former economic adviser, Steve Rattner, a proponent of ending the ban, has said that exports would bring More production, more jobs, and less reliance on imports and an improvement in our trade balance.
In addition, American consumers would receive needed economic relief in the forms of greater job security and even more affordable fuel prices. An IHS report concluded that, Lifting the ban would support an average of 394,000 new jobs annually and reduce gas prices by an annual average of eight cents per gallon. The U.S. Department of Energy also released a report in September 2015 stating, Petroleum product prices in the United States, including gasoline prices, are either unchanged or slightly reduced without crude oil exports restrictions. Opening the nation to the global energy market encourages producers and sellers to produce high-quality products at competitive prices, further improving Americans standard of living.
The benefits of crude exports would also extend far beyond the United States. Currently, unstable energy-producing nations have flooded the global market and are using oil and gas to gain geopolitical leverage. Russias energy exports now reach as far as the Asia-Pacific region through deals with China and, following the recent nuclear agreement, Iran is preparing to export its own natural resources as early as Jan. 1. Without action by Washington, our allies in both Europe and Asia will continue to depend upon energy supplies from these politically volatile nations.
The benefits of ending the export ban at home and abroad are real and tangible. And, thankfully, Congress is taking notice. The House passed legislation lifting the embargo in October, and more legislation now is in the pipeline, including an all-inclusive energy bill that recently passed in the House. It is to be hoped that Congress will stay on course to repeal this antiquated law and help ensure that going into 2016, domestic energy policy is brought into the 21st century and an egregious example of counterproductive trade protectionism is ended for good.