The happy paradox of U.S. energy markets is that the domestic fossil-fuels boom has been overwhelming destructive federal government policy. The latest example of emerging common sense is Energy Secretary Ernest Moniz's suggestion last week that the U.S. may need to reconsider its 40-year ban on most oil exports.

"Those restrictions on exports were born, as was the Department of Energy and the Strategic Petroleum Reserve, on oil disruptions," Mr. Moniz told reporters at the Platts Global Energy Outlook Forum in New York. "There are lots of issues in the energy space that deserve some new analysis and examination in the context of what is now an energy world that is no longer like the 1970s."

Thank you, Mr. Secretary. The oil export ban was one result of the oil-price political panic of the 1970s, which created the worst energy policy in U.S. history until the Pelosi Congress arrived in 2007 to repeat some of the same mistakes. Mr. Moniz is right to raise the issue, and we hope his comments will spur Congress into action.

The U.S. oil boom driven by private investment and ingenuity has transformed North American oil markets, and the International Energy Agency estimates America will surpass Saudi Arabia and Russia as the world's largest oil producer by 2015. Yet with a few exceptions, U.S. producers are barred from exporting crude oil without a license from the Commerce Department.

Commerce has been granting more licenses, albeit fitfully, and the U.S. has been exporting a little less than 100,000 barrels a day on average, mainly to Canada. But this is far less than oil producers would be able to export if they didn't have to submit to such ad hoc bureaucratic review.

Oil exports would help with the U.S. trade balance, but far more important is that they would allow energy markets to operate more efficiently. Surging domestic production has led to a mismatch between the oil produced in U.S. fields and the types needed by U.S. refiners. The booming new U.S. fields often produce lighter crude that doesn't match the heavier, lower-quality crude from abroad that U.S. refiners typically handle. Without being able to export oil, U.S. drillers have a more restricted market for their high-quality crude and less incentive to expand production.

Opponents of exporting oil claim that lifting the ban would raise U.S. gasoline prices, but that misunderstands that oil is a global market. U.S. pump prices would continue to rise or fall with world oil prices regardless of exports. But lifting the ban would lead t
 


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01/24/2014 2:07am


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04/12/2014 2:53am

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09/03/2014 2:10am

I am very happy to read this Article.

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02/13/2015 12:56am

yes i agree with your content that as recently half a decade ago, oil companies had no interest in exporting U.S. crude oil, but that has changed. Oil production has grown more in the United state .

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08/24/2015 7:33am

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04/11/2016 3:24am

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