We haven’t heard much lately from the “peak oil” crowd. Perhaps they’ve read this editorial from the latest Bloomberg Businessweek.
Consider how drastically the U.S. oil picture has changed. Production has increased to 7.4 million barrels a day from 5 million in 2008, thanks to new methods of extracting oil from deep rock using hydraulic fracturing and horizontal drilling. In the past year alone, these techniques have boosted output by a million barrels a day. Within a couple of years, production in the U.S. is expected to outstrip the domestic industry’s capacity to refine it.
By increasing exports even as it continues importing oil, the U.S. can exercise maximum flexibility in world oil markets. It can help maintain relatively stable gasoline prices, which are largely determined by the world markets. And it can keep U.S. oil flowing, encouraging further exploration and drilling.
Under the 1970s restrictions, most U.S. crude can be exported only if the U.S. Department of Commerce grants an export license based on a finding that it would be in the “national interest.” If Congress seems inclined to sit on its hands, President Obama would do well to look into the possibility of issuing a temporary blanket license, or licenses, to export oil to nations with which the U.S. has a free-trade agreement—and maybe even to nations that agree to cooperate with trade sanctions against Iran.
