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Because of America’s domestic oil boom, oil imports fell to their lowest level in 3 ½ years in June, improving the trade deficit.
As you can see from this chart by Mark Perry at the American Enterprise Institute, oil imports as a share of total petroleum products supplied have fallen dramatically since 2005, about the time when the shale boom began.
It seems counterintuitive to argue for exporting American oil, right? The Washington Post editorial board understands energy markets and explains why allowing U.S. oil exports is sound energy policy [emphasis mine]:
New technology is tapping oil-bearing shale formations in states such as North Dakota and Texas. Most of this product is light oil, which does not require heavy refining. Some of the most advanced refineries in the world are along the Gulf Coast, but that’s actually a problem: Their owners invested in expensive facilities suited to refining heavier crude, so there is a mismatch between the refining infrastructure and the type of crude flowing from U.S. wells. In the deeply interconnected global oil market, in which borders matter less than many people think, the obvious solution is to allow oil companies to ship the light crude to refineries suited for processing it, supporting U.S. profits and U.S. jobs in the process, and to tolerate imports of crude oil that U.S. refineries can handle.
Energy Secretary Ernest Moniz made this point in May.
The Post editorial goes on to note that exporting oil will improve American energy security: “[E]xpanded exports would encourage the development of oil fields and transport infrastructure, which would help the country weather some disruption in the global oil trade.”
The job gains will be substantial. An IHS study found that exporting U.S. oil will mean an additional $746 billion would be invested in domestic oil production resulting in an additional 1.2 million barrels per day of oil produced per year and 394,000 jobs created annually.
We’re long past fearing that an oil embargo will bring our economy to its knees. Instead, we live in a time of American energy abundance. When circumstances change, policies should too.