Timmons: To reflect today’s market, lift U.S. ban on crude oil exports


Outdated legislation that bans crude oil exports is at odds with America’s export-friendly trade policy and goals, and limits Houston’s economy. Photo: Gary Coronado, Staff / © 2015 Houston Chronicle


From the Export-Import Bank to Trade Promotion Authority, few topics are more hotly debated in Washington today than trade. In 2010, President Obama promised to double U.S. export growth by the end of this year. Given current export figures, that goal will go unreached, but the importance of exports in the American economy remains.

There are countless untapped opportunities in the international market that could grow the American economy. Policymakers in Washington have routinely sought out those opportunities through policies that encourage exportation. However, when the product being exported is energy, the same rules don’t apply. Energy manufacturers in the United States need full and free access to the global marketplace – access they do not currently have.

Exports of natural gas have been plagued in recent years by a protracted licensing process. It’s a process that is improving, but could still be better. Coal exports are hindered by endless environmental reviews that opponents use to push a political agenda, nuclear exports require renewed “123” cooperation agreements as well as improved export control regulations and movement on legal issues with India, and power plants are threatened in export financing negotiations. Virtually every energy sector has a will and a need to export, and in every case red tape stands in the way.

The most glaring impediment to energy exports applies to crude oil. As many Houston-based companies well know, the crude oil industry operates under laws written in 1975 despite vast changes in the industry – and the world – in the past 40 years. A decades-old rule, created in response to oil embargos and related domestic shortages, continues to ban manufacturers in the United States from exporting crude oil.

The outdated legislation that bans crude oil exports is at odds with America’s export-friendly trade policy and goals, and limits Houston’s economy. It is also at odds with our international commitments and needs in a global economy. If a manufacturer sees an opportunity to export an air conditioner, a television, a tractor or an airplane, then by all means that manufacturer should – and in almost all cases can – do it. The same logic should apply to crude oil.

The U.S. not only operates in a global market, but we helped write that market’s rules. The U.S. helped establish the global trade rules that now apply to the World Trade Organization’s 161 member countries, including our own. Those rules prohibit countries from placing quantitative limits on the export of products so that one country does not try to develop an unfair competitive advantage. Recently, the United States successfully relied upon these international obligations to challenge China’s exports restraints on rare earths and raw materials. It is long past time for the U.S. to bring our own laws into full compliance as well.

Increasing trade means more production, more demand for our products, more jobs for our citizens and more prosperity for everyone. The ability to export and operate in the world market has benefited the American economy and American workers for generations. Ending the export ban would strengthen our economy.

The President and many in Congress support ending the crude oil export ban. It’s time to take action. Congress must create a trade policy that allows America to succeed in a modern, global economy and removes the red tape surrounding energy trade.

Congress should take action to let our country’s manufacturers – the backbone of our economy – compete on a level playing field in the global market. That means improving trade policies in the energy industry and across all industries. That means working on new trade negotiating authority and export financing legislation, investing in infrastructure, and reforming the U.S. tax code and regulatory rules that undermine the global competitiveness of our manufacturers.

And if they want to grow the economy and promote free trade, it means Congress must lift the outdated ban on crude oil exports. It’s time for up-to-date legislation that reflects today’s market. It’s not 1975 anymore.



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