Archived: Energy Export Reform Will Power Job Creation and Benefit Consumers and Taxpayers


In January, Sen. Lisa Murkowski (R-Alaska) urged President Obama to lift the ban on crude oil exports and to reform the antiquated approval process for natural gas exports.

If she had made these suggestions just a few years ago, it might have seemed ridiculous. But thanks to tremendous innovation in the energy sector, the United States will soon be the biggest energy producer in the world. In order to take advantage of this unprecedented economic opportunity, President Obama must roll back the nation’s export restrictions.

The current export restrictions are a relic of a very different time. In the case of crude oil, Congress enacted restrictions in response to the Arab oil embargo of 1973. The purpose was to secure our domestic supplies in the face of increasingly volatile global oil markets.

Natural gas exportation, meanwhile, has been strictly regulated since 1938, when the country was a net importer of natural gas. Today, U.S. producers can readily sell liquefied natural gas (LNG) only to countries with which the United States has entered into a free-trade agreement. All other gas exports require approval from the Department of Energy (DOE). Obtaining permission can take years. At the moment, more than twenty export requests are under review by the DOE.

One could argue that these policies made sense when they were enacted. But today, they’re hopelessly outdated. At the moment, the United States is producing more oil than it has at any time in the past two decades. According to a projection by the Paris-based International Energy Agency, the United States will lead the world in oil production by 2015.

This growth in domestic production comes at a time when consumption has been falling across the country. The two trends together have helped make the United States far less dependent on foreign oil.

For example, in November 2013 the nation produced more crude oil than it imported for the first time since 1995.

This country is already the world’s largest natural gas producer. Since 2007, our natural gas output has increased by 600 percent and will increase a further 17 percent by 2018.

In light of this energy boom, the restrictions on crude oil and natural gas exports are no longer defensible. These regulations are now standing in the way of much-needed job creation and economic growth.

According to some estimates, lifting the ban on crude exports alone could generate as much as $15 billion a year in new revenue for U.S. firms. Such a reform would incentivize investment in production. In short order, oil companies would hire more workers, driving job growth in the energy sector as well as the countless related industries that provide services for oil firms and their employees, from construction to logistics to retail.

Relaxing LNG export restrictions would also boost job growth. According to one recent study, an increase in gas exports could generate as many as 452,300 jobs between 2016 and 2035. On top of that, expanding LNG sales abroad could add more than $73 billion to U.S. GDP each year. More people in the workforce means more revenue to the government and fewer people collecting unemployment.

Some argue that the current system of trade restrictions protects consumers by safeguarding the domestic oil and gas supply. In fact, the opposite is true. If American energy companies are prohibited from selling to willing customers abroad, there will be less incentive to shoulder the enormous upfront cost of developing oil and gas resources. In the end, domestic crude oil and natural gas production will actually decrease, endangering U.S. energy security and driving prices upward for American families.

Fortunately, Sen. Murkowski is not the only leader in Washington that understands the need for reform. In June of last year, Congressman Ted Poe (R-Texas) introduced legislation that would take away the DOE’s regulatory authority over approval of LNG export permits.

If the president serious about putting job creation at the top of his agenda this year, he needs to make both these reforms a priority. The failure to lift these antiquated restrictions on energy exports would mean squandering a historic opportunity to spur economic growth and get Americans back to work.


David Williams is president of the Taxpayers Protection Alliance, a nonprofit, nonpartisan organization dedicated to educating the public on the government’s effects on the economy.


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