America’s energy sector has undergone major changes since the early 1970s. We produced millions of barrels per day of oil, but our fast-growing demand for gasoline and diesel fuel left us dependent on imports for nearly one-third of our daily supply. The Arab Oil Embargo of 1973 resulted in long-delayed development of huge Alaskan North Slope oil resources, but still our nation overreacted and implemented a ban on crude oil exports that has limited our economic growth at home and opportunities abroad ever since.
Last month, the U.S. House of Representatives passed bipartisan legislation to lift the ban. The message from lawmakers on both sides of the aisle was loud and clear: the time has come to modernize our nation’s energy agenda. Yet, in a move hardly surprising, the White House issued a veto threat on the measure mere days before its passage in the House.
We can overcome that veto threat and this outdated policy before the end of 2015 by attaching export repeal to the must-pass omnibus bill that Congress will approve in the coming weeks. The urgency has reached critical mass, with lawmakers confirming that chances to lift the ban will dwindle drastically following the New Year.
There are at least three critical reasons why ending this policy is long-overdue.
First, crude oil exports mean significant economic opportunities here at home. The United States is currently producing more than 9 million barrels of oil per day thanks to innovations in technology and operations. In fact, the country recently surpassed Russia as the world’s top producer of oil and natural gas.
Energy production in oil and gas supports 9.8 million jobs and fuels and provides feedstock for much of the U.S. economy. By all accounts, this historical energy boom will continue to pay economic dividends for years to come. According to a 2014 report by the Aspen Institute, crude oil exports could result in 630,000 new direct energy sector jobs by 2019. Another report by IHS estimates as many as 250,000 additional supply chain jobs in 2017 and a peak of 293,000 jobs in 2018. These are critical opportunities for the millions of Americans who continue to struggle to find work in the ongoing economic recovery.
Second, exporting oil to take advantage of our growing surplus will also mean increased domestic capital. Macroeconomic analysis conducted earlier this year by ICF International and EnSys Energy estimates U.S. GDP would increase by as much as $20 billion as early as 2020 if the ban were lifted. The government’s own Congressional Budget Office predicted an additional $1.4 billion in revenue between 2016 and 2025 based off domestic and international market trends.
Finally, the national security implications for allowing American crude oil exports into the international marketplace are too great to ignore. A growing number of the United States’ global allies remain dependent on crude oil imports from politically unstable areas like the Middle East. Iran treats its energy exports as political weapons. As a result, security threats for allies like South Korea and Japan—who remain more than 90 percent dependent on imports— are only increasing.
European allies dependent on energy imports from Russia are faced with similar security threats which can also be alleviated if American crude oil was allowed into the global marketplace. But antiquated energy policies which contradict the nation’s long-standing position on free trade are also undermining the nation’s ability to alleviate these potential crisis points.
Ending the ban on crude oil exports is one of those rare policies in which the resulting benefits are so clear-cut that one wonders why action has been delayed. Yet here we are, standing at a critical crossroad with very few options left this year for making a change. In fact, attaching language to end the ban to the final must-pass bill of the year – the omnibus appropriations bill – could also seemingly be the final chance for Congress to reverse the ban before the 2016 election cycle pushes most policy conversations to the backburner.
Of course, President Obama may decide to repeal the omnibus bill. That seems unlikely — this policy issue has not been overpoliticized like others recently. Let’s hope that logic and good policy will combine in this case.