For Americans, the steep increase in U.S. supply of oil and gas has brought with it a bounty of benefits. The energy sector has increased employment in states that otherwise saw economic decline, and the growth in direct jobs has indirectly benefited communities throughout the country. At the same time, the taxes paid by the energy industry have helped bolster our national economy.
The same cannot be said of other nations.
Argentina sits atop oil and gas deposits said to rival one of the largest formations in the United States, yet its citizens are not seeing such benefits. Government control and mismanagement of the nation’s energy resources have left Argentines with few reliable institutions, a high investment costs, high inflation, deep debt, unexplored resources and a void of jobs.
In Venezuela, which boasts of some of the world’s largest oil and gas resources, the situation is even more severe. When former President Hugo Chavez kicked out 20,000 employees for not joining his 2006 “revolution,” those petroleum engineers, geologists and managers fled to other countries. Since then, Venezuela has fallen into despair. The buildings are crumbling, many shelves are empty across the country and the government is begging leaders of the Organization of the Petroleum Exporting Countries for a reprieve from the low gas prices because the high prices are funding it.
Fortunately, here at home, the energy industry hasn’t faced heavy-handed government regulation anywhere near the same level since the 1970s. That combined with access to private lands and advances in technology largely explain our success in reducing our dependence on foreign energy suppliers. But that’s not to say we haven’t edged in the wrong direction.
Our government has instituted restrictive policies in an effort to protect the United States from the global nature of the oil market. In 1975, President Gerald Ford signed into law the Energy Policy and Conservation Act that instituted restrictions on the export of most U.S. crude oil. The goal was to insulate the United States from the international market — a move that economists and policy makers alike since acknowledged was impossible. At the same time, exports of U.S. refined oil products were never restricted — so gasoline and diesel exports have steadily grown.
Despite being outdated and largely irrelevant, the ban on U.S. crude exports has gone unaddressed for the past 40 years simply because it remained a non-issue when U.S. energy production was declining. However, we have reached a turning point.
Most U.S. refineries, which were built when the country imports of crude oil were growing, are fitted to process heavy petroleum — not the light, sweet crude oil that represents the increase in domestic production. As a result, the impressive production growth over the last decade has largely outpaced our refining capabilities, creating a glut of light crude oil locked inside our borders.
This article appeared in Roll Call at http://www.rollcall.com/news/congress_needs_to_free_us_energy_resources_commentary-239612-1.html?pos=lopilr