By ACCF, Special for USDR
The United States is missing an opportunity to become a global powerhouse as antiquated federal laws that limit energy exports are undermining our long-term foreign policy interests while violating our international trade commitments, according to a new paper released today by the American Council for Capital Formation (ACCF).
“With the Obama Administration’s announcement of a nuclear agreement with Iran that will lift oil sanctions, it’s now more critical than ever that we remove our energy trade restrictions as soon as possible. If the United States continues to be the only leading nation with limits on domestically produced exports, our global leadership and credibility will be in jeopardy,” said George David Banks, Executive Vice President of ACCF. “Geopolitical impacts from the shale revolution have the potential to transform the global market with the promise of greater energy and political security for the world. The United States has a tremendous opportunity to pull the levers of energy diplomacy to ensure our allies and emerging economies have access to the energy they need while supporting peace around the globe, but unfortunately, our current energy trade restrictions are standing in the way.”
Policies specifically discussed in the paper are those curbing liquefied natural gas (LNG) exports; the ban on exportation of domestically produced crude oil; localized review process for exporting coal; and trade in civil nuclear technology. Ultimately, efforts by those impeding repeal or reform of these restrictive laws embrace “resource nationalism” which is the use of government intervention to control the trade of a resource in order to pursue a benefit perceived as unavailable under free trade. In practice, only a small number of special interests receive the benefit – e.g., protection from foreign competition – while the vast majority of American consumers are harmed economically.
The paper discusses the negative impact of our energy trade controls on allies in East Asia, specifically Japan, South Korea, and Taiwan. U.S. resource nationalism harms the economic and energy security of these important allies by denying or limiting direct access to our resources and by reducing global supplies, resulting in higher energy prices.
“While the policy of resource nationalism is tempting to many, it’s a misguided one, providing only short-term benefits to certain special interests. It is not the path forward for the United States. Rather than restricting energy trade, we must take a leadership role in protecting free trade of all our strategic resources to further global economic growth and stability,” Banks continued.
Banks also notes the increase in resource nationalism arguments in the United States when it comes to maintaining restrictions on LNG exports and the crude oil export ban, and points out the conflicting nature of these policies when it comes to the pursuance of legal action in the World Trade Organization (WTO) against similar policies from countries such as China. This serves to complicate Washington’s ability to continue pursuing these WTO actions as well as defend any possible challenges brought against the United States by other parties.
“It is time for Washington to act quickly and remove these outdated barriers that have no place in the new American energy landscape of the 21st century,” Banks concluded.
A link to the paper can be found here.
Founded in 1973, The American Council for Capital Formation (www.accf.org) is a nonprofit, nonpartisan economic policy organization dedicated to the advocacy of tax, energy, environmental and regulatory policies that encourage saving and investment.
UnlockCrudeExports.com is a project of the ACCF launched last year as a platform to educate policymakers and the public about the substantial economic benefits in lifting the 40 year old ban on exporting crude oil.
SOURCE American Council for Capital Formation