Perry supports lifting of oil export ban

Fuel Fix:

Former Gov. Rick Perry on Tuesday gave his support to lifting a decades-old ban on crude exports, calling it a “major error” to prevent U.S. oil from being shipped overseas.

Perry, a likely candidate for the 2016 Republican presidential nomination, said that if he won the White House, he would propel North America into the global energy business “in a big way.”

“If energy is going to be used as a weapon, we need to have the largest arsenal,” Perry said at the discussion hosted by Bloomberg at the JW Marriott in downtown Houston on Tuesday.

Most crude exports have been banned under laws that arose during Middle East oil embargoes in the 1970s that led to gasoline shortages in the United States.

Crude prices have tumbled dramatically in recent months after the Organization of the Petroleum Exporting Countries refused to slash production in the face of growing global supplies, leading to an imbalance that has loaded the nation’s storage tanks with oil and forced down prices further.

With U.S. production still ticking up, the price plunge has intensified oil companies’ drive to end the 40-year-old ban as they seek to sell their oil on the global marketplace.

Perry on Tuesday characterized OPEC’s refusal to stop pumping oil as an attempt to undercut the Russian and Iranian economies and test the resilience of the U.S. shale boom.

“The OPEC nations would like to strangle these countries that are not friendly to them and obviously send a little message to the U.S. as well,” he said. “I don’t think they are going to be successful.”
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OPEC is worried about market share more than pricing.  It has the dilemma of losing market share if it cuts production to raise prices.  Lifting the export ban would put further pressure on OPEC and would also cut into the Iranian and Russia market share.   The US should immediately lift the export ban and also repeal the Jones Act which makes it more expensive to transport oil from one US port to another.

I disagree with those who do not think lifting the ban is a priority.  If you are thinking strategically as well as domestic energy policy it is the right thing to do.