Tuesday, April 21, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

It’s time to rethink the outmoded oil-export ban

By
From page A8 | January 20, 2014 |

The booming U.S. energy industry is on pace to produce more oil than Saudi Arabia by next year, but it can’t sell a drop of that crude overseas.

The United States has banned crude-oil exports since 1975, two years after the Arab oil embargo sent gasoline prices soaring and made Americans nervous about energy security.

The gas lines of the 1970s are a distant memory, but the policies of that era live on. Some people in Washington are starting to talk about rescinding the export ban.

Sen. Lisa Murkowski, R-Alaska, said last week that retaining the export ban will eventually reduce U.S. production and cost jobs. The president of the American Petroleum Institute also argued that getting rid of the export ban would be “pro-growth” policy.

Even Energy Secretary Ernest Moniz said recently that the ban needs to be revisited “in an energy world that looks nothing like the 1970s.”

He’s right, but getting the rest of Washington to agree will require confronting some persistent energy-policy myths. The biggest one is that keeping American oil in America somehow results in lower prices for gasoline.

It’s not true. Although American producers can’t export crude oil, they can and do export refined products like diesel fuel and gasoline. Petroleum products, in fact, have been among the fastest-growing U.S. exports in recent years. Some European refiners have been driven out of business by the flood of U.S. products.

The result has been that U.S. gasoline prices track more closely with the European benchmark, Brent crude, than with the cheaper West Texas Intermediate. “The windfall has been going to the refineries,” says William O’Grady, chief market strategist at Confluence Investment Management in Webster Groves.

Allowing crude exports from the U.S. would reduce refiners’ profit margins, O’Grady says, but make no difference to the price we pay at the pump.

Nor is there a good national security argument for not selling oil to our trading partners. “It actually gives us a bit more geopolitical clout by being able to export.” O’Grady argues.

The export ban could hurt the U.S. as domestic production continues to grow. Refineries will eventually run into capacity constraints, and U.S. crude-oil prices will fall even farther below the world benchmark. That will put a damper on the very drilling activity that has made the shale-oil revolution possible.

“If we want this industry to continue to expand, lifting this export ban is one of the things we’re going to have to do to make sure that expansion takes place,” O’Grady says.

Even in a sharply divided Washington, and even in a congressional election year, this tweak to U.S. energy policy should be a no-brainer. It won’t affect the budget deficit, and it should reduce our trade deficit.

Some politicians might characterize allowing exports as a handout to Big Oil, but it’s not. In fact, part of the oil industry– the refineries – would be hurt by the policy change, because they would lose their monopoly on domestic crude. Drilling companies would be helped, but they’re the ones creating jobs and bringing the U.S. closer to energy self-sufficiency, a goal that has been illusory for every president since Richard Nixon.

Disco music, wide lapels and other 1970s artifacts have been out of fashion for a long time. It’s time for that era’s energy policy to join them on the scrap heap of history.

David Nicklaus is a columnist for the St. Louis Post-Dispatch. Follow him on Twitter at www.twitter.com/dnickbiz.

David Nicklaus

LEAVE A COMMENT

Discussion | 7 comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Danny BuntinJanuary 20, 2014 - 12:20 am

    Trust me, if big oil could lose a nickel on this suggested change Mr. Nicklaus would certainly be singing a different tune. Is this what goes for opinion these days? A planted corporate shill, writing not from his heart/truth, but from his accounts receivable. Drill baby drill, then sell it to the highest bidder despite country loyalty. The U.S. can be their private army, but you must let us trade a national security commodity because we want more money. Privatize the profits and turn over any down side to the tax payer. Yep, business as usual.

    Reply | Report abusive comment
  • Skeptic ScroogeJanuary 20, 2014 - 2:36 am

    Keep our oil in the USA! Exporting oil will cause prices to skyrocket.

    Reply | Report abusive comment
  • The MisterJanuary 20, 2014 - 8:11 am

    Of course the government banned oil exports as Nixon closed the Gold Window. The reason is the same reason as the conspiracy with OPEC to create the Petro-Dollar (oil around the world could ONLY be traded for in US dollars). With the Gold Window closed, inflation was set to skyrocket... which it did. Instead of exporting oil in the 1970s, we began exporting our inflation. As every country had to buy their oil with US dollars, they sucked up our excess dollars anyway they could. Our excess dollars (caused by inflation... the issuing of excess dollars by the central banking system) suddenly had value because of the demand for them by other countries (and not righteous value added by the people). We made the world suffer because our centralized economy (government, banks, mega-corps) counterfeited the value of US dollars and sold it abroad under the threat of US military violence. Why do we hate Iran and Libya? Because they have made efforts to trade oil outside of the conspiracy of the petro-dollar. Our next war with Russia will be for the same reason. And here you just thought our politicians were stoopid. They might be, but they are just puppets doing what they are told to do. Research Ellen Brown (running for CA treasurer) and Bill Still to further your education.

    Reply | Report abusive comment
  • Mike KirchubelJanuary 20, 2014 - 12:46 pm

    American refineries are becoming a very closely-held oligarchy that can manipulate domestic prices at will. Just shut down a couple of refineries and prices shoot through the roof. Perhaps we should ban exporting refined oil products as well.

    Reply | Report abusive comment
  • JonesieJanuary 20, 2014 - 2:25 pm

    With all the money US refineries are making selling refined products overseas these companies still whine that they don't have enough money to upgrade & properly maintain their refineries.

    Reply | Report abusive comment
  • Rich GiddensJanuary 20, 2014 - 2:46 pm

    This may actually be a great idea today. If we are going to make this move, it must be done soon and quickly. As we speak there are new developments! Tesla motors is promising a 30k all electric vehicle by 2016 with over 200 miles range! That development along with more commercial vehicles using US produced natural gas mean a further reduction in oil use down from the current 17 million barrels a day of which currently 9 million is US produced. Isn't the future great? Europe is shrugging off it's environmental weenieism and will now embrace fracking along with horizontal drilling. Another exciting development is what Ford Motors is doing with solar cells to produce electricity to power vehicles. One of their tech geniuses asked ''what would happen if we put an optic magnifying glass atop a solar cell?!" Eureka!

    Reply | Report abusive comment
  • Mike KirchubelJanuary 20, 2014 - 2:53 pm

    From the March 5th, 2012 column, "Putting out the fire with gasoline, "If you’ve been taking notes, which I strongly suggest, you’ll recall that in my Jan. 30 Daily Republic column, “Keystone XL reality check,” I wrote: '. . . America currently has an excess of refined oil products. To prevent a domestic glut, refiners are now shipping record amounts of gasoline and diesel fuel overseas, keeping fuel pump prices elevated and oil company profits high.' Last year, for the first time since 1949, the U.S. exported more refined oil products than we imported. In fact, we exported a net average of 439,000 barrels per day. Every day. Dang, that’s a lot of gasoline. American oil refinery production problems, distribution and the ongoing industry monopolization are also extremely pertinent topics to address here, but they deserve more space."

    Reply | Report abusive comment
.

Solano News

 
Kids Day of Fishing began with $20 donation

By Amy Maginnis-Honey | From Page: A5

 
Chabad will begin Torah for Solano Jewish community

By Amy Maginnis-Honey | From Page: A5

Library foundation executive moves to Child Haven

By Susan Winlow | From Page: A5

 
Theater schedules free screening of Sundance film

By Amy Maginnis-Honey | From Page: A8

Vacaville plans recreation expo

By Amy Maginnis-Honey | From Page: A5

 
Frazier to discuss transportation at EDC breakfast

By Kevin W. Green | From Page: A5

 
Fairgrounds site of horse-betting seminar, brunch

By Susan Hiland | From Page: A8

Il Fiorello schedules vegetarian cuisine class

By Susan Hiland | From Page: A8

 
Fairfield police log: April 19, 2015

By Glen Faison | From Page: A12

Suisun City police log: April 19, 2015

By Glen Faison | From Page: A12

 
.

US / World

Lawmakers seek FDA review of ingredients used in cosmetics

By The Associated Press | From Page: B2

 
 
 
Sheriff’s domestic violence-related conviction erased

By The Associated Press | From Page: B2

Utah woman gets up to life in prison in deaths of 6 newborns

By The Associated Press | From Page: B2

 
 
Lawyer: Washington Post reporter in Iran faces 4 charges

By The Associated Press | From Page: B2, 2 Comments | Gallery

 
Bombs shatter houses in Yemen capital, hit near Iran Embassy

By The Associated Press | From Page: B2

 
Questions, answers about federal anti-radicalization effort

By The Associated Press | From Page: B2

 
Where US sees terror prevention, some Muslims see profiling

By The Associated Press | From Page: B2, 4 Comments | Gallery

 
Chemistry Ph.D. student illustrates her thesis in comic book

By The Associated Press | From Page: B3 | Gallery

Public memorial held for the Rev. Robert Schuller

By The Associated Press | From Page: B2

 
SC paper wins Pulitzer for reporting on domestic abuse

By The Associated Press | From Page: B2

 
.

Opinion

 
Why does Fed insist on targeting inflation?

By Ramesh Ponnuru | From Page: A11, 2 Comments

Income disparity study results ironic

By Dan Walters | From Page: A11, 22 Comments

 
.

Living

Community Calendar: April 21, 2015

By Susan Hiland | From Page: A2

 
.

Entertainment

 
Bobby Brown’s lawyer: Bobbi Kristina Brown has opened eyes

By The Associated Press | From Page: B3

US writer who fled Austria to escape Holocaust dead at 90

By The Associated Press | From Page: B3

 
Vice News, NPR, CNN, WNYC win double Peabody Awards

By The Associated Press | From Page: B3

HBO planning to deal Web pot sitcom ‘High Maintenance’

By The Associated Press | From Page: B3

 
Kolbert’s ‘Sixth Extinction’ wins Pulitzer for nonfiction

By The Associated Press | From Page: B3

Wolfe’s ‘Anthracite Fields’ wins Pulitzer for music

By The Associated Press | From Page: B3

 
Anthony Doerr wins Pulitzer Prize for fiction

By The Associated Press | From Page: B3

Elizabeth A. Fenn wins Pulitzer Prize for history

By The Associated Press | From Page: B3

 
Gregory Pardlo’s ‘Digest’ wins Pulitzer Prize for poetry

By The Associated Press | From Page: B3

David I. Kertzer wins Pulitzer for biography-autobiography

By The Associated Press | From Page: B3

 
Stephen Adly Guirgis wins Pulitzer for drama

By The Associated Press | From Page: B3

.

Sports

Mustangs rally in seventh inning to top Falcons

By Daily Republic staff | From Page:

 
AP source: Peterson stays home from Vikings workouts

By The Associated Press | From Page: B1

Report: 2 teams needed to make California stadium profitable

By The Associated Press | From Page: B1

 
Data deluge: MLB rolls out Statcast analytics on Tuesday

By The Associated Press | From Page: B1

Former Chicago Bears linebacker Doug Buffone dead at 70

By The Associated Press | From Page: B1

 
New format means injured drivers no longer must race

By The Associated Press | From Page: B1

Saunders: ‘I’m the coach until I say I’m not’

By The Associated Press | From Page: B1

 
Faldo to make final appearance at British Open this year

By The Associated Press | From Page: B1

Braves’ McKirahan suspended 80 games for positive drug test

By The Associated Press | From Page: B1

 
Raptors Lou Williams wins NBA Sixth Man Award

By The Associated Press | From Page: B1

Ugly Olympic conflict breaks into open at Sochi conference

By The Associated Press | From Page: B1

 
Pacquiao gets in 2 words before conference call cancelled

By The Associated Press | From Page: B1

Eagles sign quarterback Tim Tebow to 1-year contract

By The Associated Press | From Page: B1

 
McLellan out after 7 years as coach of San Jose Sharks

By The Associated Press | From Page: B1

Pelicans coach says Warriors arena noise might be too loud

By The Associated Press | From Page: B1

 
Police: LA Kings’ Jarret Stoll had cocaine, Ecstasy in Vegas

By The Associated Press | From Page: B1

Desisa wins 119th Boston Marathon; Rotich takes women’s race

By The Associated Press | From Page: B1

 
Jockey Chris Antley leads Racing Hall of Fame class

By The Associated Press | From Page: B1 | Gallery

.

Business

Judge returns ultra-rich club founder Tim Blixseth to jail

By The Associated Press | From Page: B4

 
Running out of time: Limited-time deals can be limiting

By The Associated Press | From Page: B4

$134M proposed for 10 BP-funded oil spill recovery projects

By The Associated Press | From Page: B4

 
Hormel says bird flu outbreak will hurt turkey sales

By The Associated Press | From Page: B4

Bird flu confirmed at Iowa farm with 5.3 million chickens

By The Associated Press | From Page: B4

 
US stocks gain, rebounding from Friday’s slump; Hasbro jumps

By The Associated Press | From Page: B4

 
Survey: US businesses expect sales rebound, more hiring

By The Associated Press | From Page: B4

Bristol-Myers: 2 cancer drugs beat 1 against melanoma

By The Associated Press | From Page: B4

 
Halliburton says has cut 9,000 jobs in wake of oil’s drop

By T. Burt McNaughton | From Page: B4

Labor group seeks rehiring of workers at 5 Wal-Mart sites

By The Associated Press | From Page: B4

 
Frederick’s of Hollywood files for Chapter 11 bankruptcy

By The Associated Press | From Page: B4

Willie Nelson becomes latest celebrity in marijuana business

By The Associated Press | From Page: B4 | Gallery

 
Kraft Mac & Cheese shedding the dyes

By The Associated Press | From Page: B4

ESPN says Verizon’s new FiOS TV packages violate agreements

By The Associated Press | From Page: B4

 
Lawsuit: Southwest failed to respond to medical emergency

By The Associated Press | From Page: B4

.

Obituaries

.

Comics

Bridge April 21

By Daily Republic Syndicated Content | From Page: B8

 
Get Fuzzy April 21

By Daily Republic Syndicated Content | From Page: B7

Peanuts April 21

By Daily Republic Syndicated Content | From Page: B7

 
Rose is Rose April 21

By Daily Republic Syndicated Content | From Page: B7

Frank and Ernest April 21

By Daily Republic Syndicated Content | From Page: B7

 
Baby Blues April 21

By Daily Republic Syndicated Content | From Page: B7

For Better or Worse April 21

By Daily Republic Syndicated Content | From Page: B7

 
Word Sleuth April 21

By Daily Republic Syndicated Content | From Page: B8

Dilbert April 21

By Daily Republic Syndicated Content | From Page: B7, 1 Comment

 
Sally Forth April 21

By Daily Republic Syndicated Content | From Page: B7

Cryptoquote April 21

By Daily Republic Syndicated Content | From Page: B8

 
Garfield April 21

By Daily Republic Syndicated Content | From Page: B7

Crossword April 21

By Daily Republic Syndicated Content | From Page: B8

 
B.C. April 21

By Daily Republic Syndicated Content | From Page: B7

Wizard of Id April 21

By Daily Republic Syndicated Content | From Page: B7

 
Blondie April 21

By Daily Republic Syndicated Content | From Page: B7

Beetle Bailey April 21

By Daily Republic Syndicated Content | From Page: B7

 
Baldo April 21

By Daily Republic Syndicated Content | From Page: B7

Zits April 21

By Daily Republic Syndicated Content | From Page: B7

 
Pickles April 21

By Daily Republic Syndicated Content | From Page: B7

Sudoku April 21

By Daily Republic Syndicated Content | From Page: B8