Focus_Trade_Feature_05-2014

Is the administration’s “ambitious trade agenda” ambitious enough?

The Obama administration has been talking up the benefits of exports this week. On Tuesday, Commerce Secretary Penny Pritzker noted that nearly one-third of the country’s economic growth since the middle of 2009 has been fueled by exports. The president, meanwhile, claimed that more American jobs currently are supported by exports than at any point in the last 20 years.

This focus on trade is welcome.

Economists have long known that increased levels of international commerce benefit consumers and grow economies, so it’s heartening to see the administration profess a desire to expand American exports through the National Export Initiative. The Commerce Department refers to NEI as “the most ambitious trade agenda in a generation.”

A push for even freer trade

Growing_Exports_05-2014It seems, however, that this agenda could be more ambitious.

An obvious step would be to encourage exports of energy products like liquefied natural gas (LNG) and crude oil, domestic supplies of which are abundant and growing. Yet various federal government policies currently limit or prohibit their export.

It’s worth pointing out that exports of finished petroleum products like gasoline, diesel, and jet fuel – which are not proscribed by federal law – have increased significantly during the period cited by Sec. Pritzker.

These exports have contributed to the good-news trade story the administration is touting. It makes no sense, then, that crude oil exports and natural gas exports are subject to severe regulatory limitations, when they could also add to the nation’s much-needed economic recovery. Continuing these policies threatens to slow domestic economic activity as well discourage future energy production.

A shift in thinking?

Fortunately, Washington may be considering the merits of extending the benefits of free trade to all energy products.

Two weeks ago the House Energy & Commerce Committee advanced legislation that would require the Department of Energy to issue a decision on applications for LNG export permits in an expedited fashion. A similar bill awaits action in the Senate. I’ve explained many times why government delays on issuing these decisions are unwise.

Meanwhile in Seoul on Tuesday, Energy Secretary Ernest Moniz announced that his colleagues are coming around to the idea of opening up the policy discussion to whether to lift the export embargo on crude oil.

“The issue of crude oil exports is under consideration,” Sec. Moniz said. “A driver for this consideration is that the nature of the oil we’re producing may not be well-matched to our current refinery capacity.”

He added, “There are a lot of issues in the energy space that deserve some new analysis and examination in the context of what is now an energy world that is no longer like the 1970s.”

Sec. Moniz took great pains to make clear where final authority for lifting the ban lies: the U.S. Department of Commerce (just as his agency has authority for moving LNG permit applications).

Let’s hope both Sec. Pritzker and Sec. Moniz take actions to match the administration’s strong rhetoric on trade, and that they do so quickly so that the energy sector can do even more to help American economic growth.

 


2 Comments

Already have a username? Log in to comment. First-time commenting? Sign up to create your username. It's easy, and we won't share your information.

  1. Burton Trattner says:

    It’s cheap gas more than anything!
    The fastest way to revive the US economy is to produce so much oil for world markets that OPEC no longer sets the price. If gasoline can ever see $1.50 again, there will be Billions of dollars worth of discretionary spending here in the US. The driving poor and lower middle class have severely restricted their driving due to a $60 fill up. We need to get Americans back on the highways and byways again for road travel vacations. That’s where the Holiday Inn, McDonald’s were born as well as Disney World. All because of the touring along Roadside America.

    • Stanley Killebrew says:

      Accordingly, ($94) a barrel is now the (Floor) for a barrel of crude oil. Won’t get any cheaper.
      America will never see ($1.50) a gallon for gasoline again. NEVER! *With the current Administration
      and ‘anti-big oil’ lobbyist’s in Washington. *I question (America’s Energy Policy) and the wisdom of
      these people that keep hurting American companies, i.e., Exxon/Mobil, to push for an American
      Energy Policy that would benefit the consumer? *With all the (Science) that the Auto Industry makes
      here in Detroit. *Regardless, ‘if’ its Green Energy, e.g., Solar, Wind, Electric, etc.

      * A Country without an Energy Policy, that is, (Relevant) to the needs of Energy in
      the (21st Century) is no longer a Country “United” … but Separated, on issues
      at hand.

      The fact of the matter is … (WE) all need to promote an American Energy Policy
      that will benefit American’s, Create more Job’s and hope that (Exxon/Mobil) can
      (Invent) more science to benefit mankind.

      And I agree with you Burton, the Roads are what made America! And the way
      the (Infrastructure) is literally crumbling away in America. Its a disgrace and a
      dog gone shame! *Insurance is sky high, Oil & Gas is over priced and not
      enough sales. *And I love to live free & ride! Country! Rip them roads up and
      go on an adventure. *Still a whole lot to discover in America!

      ***(IF) the Market’s ever did go back to the (standard) of America (exporting)
      OIL from America. And we went Energy Independent, I question… read more »

      …the drop
      in (OIL) & (PETRO DOLLAR). Would this not collapse (OIL) on the global
      Market “IF” America decided to bash/get rid of (OPEC)?

      Thank you.

  2. Burton Trattner says:

    It’s cheap gas more than anything!
    The fastest way to revive the US economy is to produce so much oil for world markets that OPEC no longer sets the price. If gasoline can ever see $1.50 again, there will be Billions of dollars worth of discretionary spending here in the US. The driving poor and lower middle class have severely restricted their driving due to a $60 fill up. We need to get Americans back on the highways and byways again for road travel vacations. That’s where the Holiday Inn, McDonald’s were born as well as Disney World. All because of the touring along Roadside America.

    • Stanley Killebrew says:

      Accordingly, ($94) a barrel is now the (Floor) for a barrel of crude oil. Won’t get any cheaper.
      America will never see ($1.50) a gallon for gasoline again. NEVER! *With the current Administration
      and ‘anti-big oil’ lobbyist’s in Washington. *I question (America’s Energy Policy) and the wisdom of
      these people that keep hurting American companies, i.e., Exxon/Mobil, to push for an American
      Energy Policy that would benefit the consumer? *With all the (Science) that the Auto Industry makes
      here in Detroit. *Regardless, ‘if’ its Green Energy, e.g., Solar, Wind, Electric, etc.

      * A Country without an Energy Policy, that is, (Relevant) to the needs of Energy in
      the (21st Century) is no longer a Country “United” … but Separated, on issues
      at hand.

      The fact of the matter is … (WE) all need to promote an American Energy Policy
      that will benefit American’s, Create more Job’s and hope that (Exxon/Mobil) can
      (Invent) more science to benefit mankind.

      And I agree with you Burton, the Roads are what made America! And the way
      the (Infrastructure) is literally crumbling away in America. Its a disgrace and a
      dog gone shame! *Insurance is sky high, Oil & Gas is over priced and not
      enough sales. *And I love to live free & ride! Country! Rip them roads up and
      go on an adventure. *Still a whole lot to discover in America!

      ***(IF) the Market’s ever did go back to the (standard) of America (exporting)
      OIL from America. And we went Energy Independent, I question… read more »

      …the drop
      in (OIL) & (PETRO DOLLAR). Would this not collapse (OIL) on the global
      Market “IF” America decided to bash/get rid of (OPEC)?

      Thank you.