- - Wednesday, October 29, 2014

ANALYSIS/OPINION:

Saudi Arabia is no longer king of the oil patch, and the United States can put the 1970s oil shortage down the memory hole and act again like the world’s No. 1 producer. American drillers pull 12.3 million barrels of oil out of the ground every day. The Saudis pump 11.6 million barrels daily. But American companies can’t sell any of the bounty overseas.

Only refined oil products may be sold abroad, and American refineries are shipping gasoline and diesel fuel abroad at historic rates. A ban on crude-oil exports has been in place for decades, a relic of the 1973 OPEC oil embargo. With a few exceptions — a barrel or two make their way to Canada and Mexico — oil can’t leave American shores.

The Brookings Institution estimates that eliminating the ban would boost America’s gross domestic product by $1.8 trillion. National Economic Research Associates figures 380,000 unemployed Americans would return to the workforce next year if the ban were eliminated. The domestic price of gasoline would tumble, thanks to the increased global supply of crude. Ordinary Americans could live like sultans (without the harems or sheep’s eyes soup), or at least better than they do today.

Much has changed since the era of Jimmy Carter to make the ban obsolete. Oil men have figured out how to extract the juice from previously inaccessible places. Instead of boomtowns, the shale revolution has created a boom state in North Dakota, which has defied the malaise with an unemployment rate half the national average.

The most important Asian trading partners, including Japan and South Korea, are clamoring to import American crude. The Europeans are eager to reduce reliance on the good graces of Vladimir Putin.

Apart from certain environmentalists and isolationists, the most important supporters of the restriction are the refiners, who don’t want a drop of oil to leave America unless it has gone through their refineries first.

Sen. Lisa Murkowski, Alaska Republican, has been leading the charge to get rid of the ban, and Sen. Ron Wyden of Oregon, the Democratic chairman of the Senate Finance Committee, says he wants to study the policy. President Obama could do it overnight with a telephone call to Commerce Secretary Penny Pritzker, who would then approve the necessary waivers to get the crude moving.

Mr. Obama is several yards shy of an economic legacy worth having, and here’s his opportunity. Republicans and Democrats could work together to exploit this wealth. This would make everybody happy.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide