HS vice chairman Daniel Yergin tells TheStreet’s Joe Deaux that gas prices could drop by as much as 8 cents per gallon if the United States lifts its crude oil export ban. According to a Wednesday story in The Hill, the Obama administration has issued a formal veto threat against a measure that would lift the 40-year-old oil export ban. The ban, which was imposed in the wake of the first Arab oil embargo, is judged by most analysts to be obsolete. Thanks to the fracking boom and the advent of advanced drilling technologies, domestic oil and gas producers are awash in the product that could be sold overseas. The White House, however, believes that such a policy move would interfere with its drive to end fossil fuels and switch to a “non-carbon based” economy based on solar, wind, and other renewables.
The glut in the domestic product, as USA Today editorialized, has devastated the oil and gas industry, with wells being shut down and production plummeting. Opening up export markets would allow domestic oil and gas producers to sell some of the excess product, keeping production capacity open, and thus keeping the price of oil and gas low. The policy change would also create American jobs.
Exporting oil and gas would also help to displace product sold by unfriendly countries, such as Russia and Venezuela, imposing economic pressure. Exports to Europe would help wean countries there from dependency on Russia, thus decreasing that country’s influence on American allies.
The Obama administration’s knee-jerk opposition to lifting the export ban is inexplicable from an economic and foreign policy perspective. The stance represents a “stuck on stupid” attitude based on ideological hostility to the oil and gas industry and an unjustified fear of global warming.
