Congress should pass bill to allow foreign sale of America’s abundant oil and gas resources
Now that U.S. oil and gas production is booming, there’s little justification for maintaining the ban on liquefied natural gas exports. Removing the 1970s ban would stimulate domestic energy production, keep the fracking-induced job boom going and increase national economic output.
Domestic crude oil production recently reached its highest level since 1972, hitting 9.1 million barrels per day. According to the International Energy Agency, the United States is now the world’s largest oil and gas producer, ahead of Saudi Arabia and Russia.
Hydraulic fracturing and other technologies have opened up production, especially in Texas and North Dakota, which produced almost half the nation’s oil in April 2014, according to the Energy Information Agency (EIA).
Yet only one export permit has been approved since 2010 to provide natural gas to a country with which the U.S. doesn’t have a Free Trade Agreement. Last year the Obama administration approved exporting a lighter crude oil, a condensate, that’s passed through distillation towers and is therefore considered a petroleum byproduct. That gave two Texas companies the green light to export the condensate.
The House Energy and Commerce Committee, under the leadership of Rep. Fred Upton, has persistently pushed for Congress and the Obama administration to move on bipartisan legislation that would lift the ban. This year and last, the House passed bills to expedite the approval process for natural gas exports. The Senate is considering similar measures, and President Barack Obama has acknowledged advantages to opening up exports.
Those opposed to exports fear global competition will hike domestic gas prices. Manufacturing and chemical companies in particular have been fighting efforts to lift the ban, including Dow Chemical of Midland.
Opening up exports might increase natural gas prices in the U.S., but the current market provides enough price cushion to at least test out the impact of expanded exports. Further, the domestic natural gas market would respond to increased demand, likely with more production.
Even from an environmentally-conscious perspective, opening up exports makes sense. The modest increase in natural gas prices might push consumers to turn to alternative energy sources, including renewables. Data from an October 2014 EIA study backs this up.
The U.S. economy could add up to 300,000 or 400,000 jobs over the next several decades by expanding exports, and could reduce the trade deficit by $22 billion. A Brookings Institute study found crude exports could add between $600 billion and $1.8 trillion to GDP by 2039.
The perceived oil scarcity that led to the LNG export ban is no longer an issue for the United States.
Energy policy is critical to the country’s economic growth, and it’s time this outdated ban is lifted.