A True Free Market
The United States is a free market. We are a capitalistic society. Pick your product and it can be imported and exported around the world – within reason. This idea of a free market society is what this great nation was founded upon several hundred years ago. The one caveat that makes this idea of a free market mostly true is crude oil.
For almost 40 years now, a ban has been in place that prevents exporting our nation’s crude oil supplies. This is an antiquated law that should have been lifted long before now. Travel to West Texas, North Dakota, across the Midwest or even to South Louisiana, and you will see rigs drilling for crude oil. Our nation’s crude oil production has grown over 90% just in the last eight years thanks to shale plays around the country. But then the problem begins. We cannot export this oil to allied countries around the world because of a 40-year-old ban.
Picture in your mind a world-class basketball player having to play with one hand tied behind his or her back. He or she might make an occasional basket or a quality pass to a teammate, but clearly the talent and ability to play competitively is greatly diminished. This perfectly explains the U.S. oil market. Over nine million barrels a day of crude oil are being produced and yet the oil cannot be exported.
The oil and gas market is experiencing the most trying of times literally since the first well was drilled. Prices have fallen from more than $100 a barrel in November of 2014 to less than $35 today. OPEC, the world’s dominant oil cartel made up of 13 countries, has been dictating global oil prices for far too long. U.S. allies around the globe have been dependent on the OPEC cartel for their supply of oil thanks in part to the export ban on oil in the United States.
Exporting crude oil to our allies pushes our country towards energy security. Not only does this help our nation, but also it further diminishes OPEC’s market share. Weakening our dependence on OPEC should be of chief concern to the United States for reasons far beyond oil prices.
In addition to the national security side of the equation should the ban be lifted, we can expect an increase in drilling in the United States to fulfill the new global demand for U.S. oil. With each new rig added across the nation, 180-240 direct and indirect jobs will be added. For a temporary time, a lifting of the ban would keep gasoline prices down but allow men and women to get back to work. Low gasoline prices and more dollars in the pockets of the workforce would only further strengthen a hurting economy.
As 250,000 global jobs have been lost in the last year alone, a lifting of the ban would encourage growth in the United States like we have not seen in many decades. Peak oil conversations are over. With a 100 year supply of oil and an over 200-year supply of natural gas, our nation is positioned to be a true world leader again – that is if we can become a true free market.
Don Briggs is President of the Louisiana Oil and