Yesterday, the White House unveiled the text of the Trans-Pacific Partnership (TPP) – a trade agreement between the United States, Japan and 10 other Asia-Pacific countries. The administration promotes this free trade agreement with the tagline “Leveling the playing field for American workers & American businesses,” but unfortunately does not extend those same principles to energy trade and the American oil and natural gas workers who would benefit from the free trade of U.S. crude oil.
As PACE has previously noted, President Obama’s support of free trade and recognition of the positive economic benefits that result from trade do not align with current U.S. policy that prohibits exports of crude oil to allies and trading partners around the world. The United States is the only major oil producing country in the world to ban exports of crude oil. As a result, we are sacrificing the opportunity to protect and create U.S. jobs and give U.S. businesses a fair chance to compete in the global marketplace.
The White House notes that every $1 billion in U.S. exports supports five thousand U.S. jobs. It’s estimated that over 250,000 oil and natural gas jobs have been lost over the past year, and just today the Bureau of Labor Statistics noted that the oil and natural gas industry continues to shed jobs by the thousands. The Wall Street Journal editorial board today highlighted these job losses, and how lifting the crude oil export ban would help put Americans back to work:
“Economist Mark Zandi told reporters in August that oil and gas companies have been laying off 10,000 to 15,000 workers a month this year…Washington could ease that transition at no cost to taxpayers. Merely by lifting the oil export ban, Mr. Obama and Congress could expand markets for U.S. crude oil and reduce job losses.”
The free trade of crude oil would not only benefit U.S. workers and our economy, but strengthen U.S. foreign policy. U.S. allies and trading partners are asking for U.S. crude oil in order to reduce their alliance on countries like Iran and Russia. The European Commission has recently pressed the administration to lift the crude oil export ban. Japan – which is part of the TPP – is also pushing for U.S. export restrictions to be lifted. As reported by Platts:
“Sources in Washington said last week that the Japanese government is set to launch diplomatic pressure on the US to allow crude exports, while EU officials are pushing the US to lift its long-standing restrictions on crude exports in the name of global energy security… For Japanese refiners, potential US crude exports could not only help diversify their supply sources but also lower their crude procurement costs as the refiners could have bargaining power over crude purchases from other regions, according to sources.”
The U.S. should follow the principals of the TPP and allow free trade of all U.S. goods and services – including crude oil. Lifting the ban will level the playing for U.S. companies, protect and create American jobs and give our allies a choice on where to buy oil.