The Economic Benefits of Lifting the Ban on Crude Oil Exports
A paper released a few days ago by the American Council for Capital Formation lays out the significant economic benefits the United States could reap should Congress and the Administration allow crude oil to be exported to other countries, which is currently banned by law.
“The Economic Case for Lifting the Crude Oil Export Ban” was authored by Dr. Margo Thorning, Senior Vice President and Chief Economist for the American Council for Capital Formation, and William Shughart, Research Director for the Independent Institute.
The authors outline how lifting the ban on crude oil exports would lead to a surge in domestic job growth, an increase in U.S. GDP, and create downward pressure on fuel prices.
Drs. Thorning and Shughart analyzed the unanimous conclusions drawn from multiple macroeconomic studies published over the last year, including the positive effect eliminating the ban on crude oil exports will have on the rate of domestic job growth. They examined studies from research firms IHS and ICF International, as well as nonprofit research from the Aspen Institute, the Brookings Institute, and Resources for the Future.
Several of those studies focused on job creation. According to the Aspen Institute study, allowing crude oil exports will generate 216,000 new construction jobs in 2017 alone. Furthermore, the manufacturing sector would gain an average of 37,000 new jobs per year through 2025.
The IHS report similarly touches on the positive economic effects that would result of taking action on crude oil exports. Along with creating between 394,000 and 859,000 new jobs each year nationwide, the U.S. GDP is projected to increase annually between $86 and $170 billion from 2016 to 2030 period. Taking advantage of this potential for job growth would go a long way towards maintaining an efficient and prosperous economy.
Notably, last year IHS released a similar study on job growth in the energy industry that highlighted how minorities are projected to fill an unprecedented number of those jobs. In the oil, natural gas and petrochemical industries, jobs for minorities will increase from one-quarter of total jobs in 2010 to one-third by 2030. That report projects that of up to 1.3 million new job opportunities predicted by 2030, almost 408,000 positions—32 percent of the total—will be held by African American and Hispanic workers.
The United States is in the midst of an energy boom and it is well past time for us to start taking advantage of our abundance of energy resources. The Thorning and Shughart paper notes that a policy change in U.S. exports of crude oil would mean more investment and production here at home. Congress and the Obama Administration should take action to lift the outdated ban on crude oil exports before the opportunity slips away.