Let’s not poke a hole in consumers’ pockets

Americans are finding a welcome holiday gift when they fill up at the gas station – prices at the pump have been dropping dramatically to five-year lows.    

It’s cause for celebration, because the drop in gas prices means more money in household wallets – to buy a new car, spend on holiday gifts, to save more for college, and more. In fact, consumers are saving $630 million every day compared to what they paid for gasoline back in June, according to The Washington Post. 

{mosads}And the effects of lower gas prices ripple throughout the economy – lower jet fuel and diesel prices ultimately translate into lower prices for transportation and distribution, which benefits travelers and businesses of all sizes, especially small businesses.  The travel costs of business meetings and family vacations are less, and items bought on-line or in local shops and supermarkets become more affordable.  The cost of fuel goes well beyond the family car’s gas tank.   

Indeed, the American Enterprise Institute says lower fuel prices are like an across-the-board tax cut of $160 billion, without any intervention by Congress. And a Goldman Sachs analysis says the price drop could add 0.4 percent to U.S. GDP.  

So, it may come as a shock that some folks in Washington want to rain on this parade, but they do.  Yes, only in Washington would there be an effort afoot to reverse this welcome trend in fuel prices.  

Some interests in D.C. want to reverse a decades-old ban on exporting American crude oil designed to boost U.S. energy independence and security.  

Rather than refining American crude oil into products here in the United States – from gasoline to diesel to jet fuel and much more, some interests want to export unrefined American crude to overseas refineries. Foreign workers would make those products, rather than hard-working Americans. 

Put simply, a change in policy would mean the added value comes from abroad, not from here at home.   To add injury to insult — American crude would be shipped over to Europe, refined there, and then those products would be sold back to us at a higher price than if the crude oil were refined in the United States.   

Meanwhile, shipping domestically-produced crude oil overseas would mean less domestic crude oil is being refined here in the United States, while we are still importing about 45 percent of our daily demand!  Prices here would inevitably rise, in effect creating a massive tax increase – perpetrated by Congress.  

Crude oil remains a foundational commodity, singularly critical to our economic well-being and our national security.  While energy independence has been a goal of successive Presidencies ever since the oil shocks of the 1970s, we are far from reaching that goal.  

In 1974, we imported 3.4 million barrels of oil a day; today, we import over 7 million barrels of oil a day, according to the U.S. Energy Information Agency.  Meanwhile, the EIA also indicates that despite the increase in domestic crude production to about 8.3 million barrels per day, we’re still producing almost a half million barrels less per day now than in 1974.  

The economy remains precarious; millions have left the workforce completely, and many remain underemployed and unemployed.  Accordingly, it makes zero sense for Congress to fool around with a risky policy that could affect the price of fuel, which has such an enormous ripple effect throughout the entire economy.  

The House Energy & Commerce Subcommittee on Energy & Power will be hosting a hearing on America’s longstanding ban on exports of U.S. crude oil this week.  A hearing on the facts is welcome, as opposed to various myths perpetrated by crude-export proponents.  

With a focus on the facts, lawmakers should come away from the hearing recognizing that lifting the crude-export ban is entirely unwarranted and unwise, amounting to a massive transfer of wealth that pokes a hole in the pockets of consumers.  

Hauck is executive director of Consumers and Refiners United for Domestic Energy, a coalition of independent oil refiners that oppose lifting the crude export ban.