In many ways, leftards are so far behind rational thinkers it’s difficult to regress to the point to explaining how they’re missing and skipping some pertinent thoughts. This is almost one, but, I think I can manage. I’ll try, anyway.
So, there’s this new study out about how to lower gas prices at the pump. AOL has this one!
NEW YORK (AP) – Exporting more U.S. crude around the world would lower the price of gasoline for U.S. drivers and benefit the U.S. economy, according to a new study released Tuesday.
While the conclusion may be counter-intuitive, the reasoning is straightforward: Exports would encourage more U.S. oil production and put that crude on the global market. That would lower the global price of oil, the price that is linked most closely to the price of gasoline in the U.S.
Exports of U.S. crude oil have been banned, with few exceptions, since soon after the 1973 Arab oil embargo.
Other studies have reaches similar conclusions. This latest study, released Tuesday, was conducted for the Brookings Institution by NERA Economic Consulting.
The study was introduced by former Obama adviser Larry Summers, who made a forceful case for removing the export restrictions as soon as possible. Summers said the decades-old restrictions serve no purpose now and that oil exports would add jobs, improve the nation’s geopolitical standing, and generate desperately-needed economic growth.
“We shouldn’t have prohibitions without a reason,” he said. “We need all the economic benefits we can get.”
The study calculates that pump prices would fall 2 cents to 12 cents per gallon on average, depending on how much oil is ultimately found and when the export restrictions are lifted, because oil prices would fall.
“Lifting the export ban would remove an artificial barrier to crude oil production,” the study’s authors conclude. “The result would be lower crude oil prices worldwide.”
The overall U.S. economy would benefit from more oil-producing jobs, higher wages, and consumers spending the money they save on gasoline on other products, the authors conclude.
Delaying a decision on the ban, the authors say, would eliminate nearly all the potential benefits.
U.S. crude exports are allowed only with special federal approval, the result of restrictions put in place after the 1973 Arab oil embargo. The rules went largely unchallenged for decades because oil production in the U.S. was slipping while demand was rising, so few thought the U.S. would be in a position to export oil.
The U.S. still uses far more crude oil than it produces. But domestic oil production is booming in North Dakota, Texas and elsewhere thanks to improved drilling techniques. The oil being produced is a variety of crude that foreign refineries covet and that many U.S. refineries are not equipped to handle. Oil producers and some politicians have called for the export ban to be lifted.
Opposition to exports of crude comes from U.S. refiners who benefit from lower-priced U.S. crude and some politicians. They argue that lifting the ban would raise U.S. crude prices, making it less profitable for domestic refiners to produce fuel. They would then reduce production, and U.S. gasoline prices would rise.
A growing number of studies have called that into question, however. The conclusions of the Brookings report are similar to a study funded by the oil industry and performed by the research firm IHS in May and a February paper by Resources for the Future, a non-profit research group that receives funding from government and private foundations.
A survey of private, corporate and academic economists conducted by the Associated Press earlier this year found overwhelming support for oil exports. Ninety percent of the 30 economists surveyed said the economy would be better off if oil exports were allowed.
This is a ‘yes, but, no, use your head, think for a minute, and yes, but, no’ bit of silliness.
Here is one fact which is inarguable, if we had unrestricted access to the oil we have, and we lifted the export ban, in general, our nation’s economy would be better. It could be much better.
But, that’s not the question! The authors say “Lifting the export ban would remove an artificial barrier to crude oil production,” the study’s authors conclude. “The result would be lower crude oil prices worldwide.”
Well, it would eliminate a secondary artificial barrier, but, not the primary barrier in the US.
But, the authors are probably correct in that exporting oil would probably decrease the price of gasoline, as a global commodity. But, not significantly so. The reason is because we still consume more than we produce. Now, if we had unrestrained production, this would be a different story. But, we don’t. And, removing the export barrier doesn’t address this. We don’t have to “find” it, we already know where it is. But, much of it is on federally controlled land which is off limits to drilling and mining the oil.
The problem is the export ban is poorly managed. There’s a much better solution rather than simply lifting the ban and exporting one of our primary energy sources.
Oil companies, and OPEC set the oil prices, which dictates US oil production.
It has been demonstrated that the US, Canada, and Mexico can easily supplant OPEC as the largest source of oil. OPEC is another one of those “artificial barriers”.
This is a huge source of frustration for me. The answer to many of the US’ and, indeed, world’s problems lay with unrestrained oil production from North America.
Let’s get in a price and production war with OPEC!!!! We could almost literally flood the world with extremely cheap oil! What happens in a world with a cheap energy source? The global economy would suddenly get a lot better! The nations in North America would benefit greatly by such an action, and we would siphon off revenues from terrorist funding nations as a bonus for the world and the US.
But, that doesn’t happen by simply lifting the ban on exports. 2 cents? In other words, not much would change. The price in the US dropped by more than that just because we don’t have money to travel on vacations this year.
If anyone was serious about dropping the price of gasoline, then, we’d have to do a few things, in tandem. Yes, one of them would be to remove the ban. But, we’d also have to quit dumping our now high priced corn down our gas tanks. We’d have to open up the places where the oil companies want to go, but, our feds won’t allow them to go. And, then, we’d have to enter an alliance with Canada, (Mexico would be nice, but, isn’t mandatory) and simply embrace the notion of being an energy supplier for the world. Things like building pipelines and whatnot. You can’t lower the price of gasoline if one moves oil via rail lines. It’s expensive to do so. The more oil production, the more additional expense if we’re moving it via rail.