Exporting U.S. Oil And Gas Is Good For The Economy

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Investors Business Daily:

For scurrilous attacks on the oil and gas industry, few liberals in Congress can hold a candle to Rep. Edward Markey of Massachusetts.

Several weeks ago, Markey, who is ranking Democrat on the House Natural Resources Committee, filed a bill that would require bidders for oil and gas leases on federal lands to certify that all production from such leases be offered for sale only in the U.S.

In a press release, Mr. Markey argued that oil and gas from public lands belong to the American people and, therefore, should stay in America. He also claims the energy industry is only interested in boosting domestic production so they can sell more oil and gas abroad.

The congressman obviously doesn't understand how energy markets work. The export of American crude oil and refined products has no impact on the global price of petroleum or the local price of gasoline in the short term.

On the other hand, if we adopt policies to encourage more domestic production of oil, whether it's consumed at home or exported, over time the additional output will help put downward pressure on prices and further reduce our dependence on imports (which have fallen from 65% to 40% of consumption since 2007).

An alternative explanation for Markey's filing is that he's kowtowing to consumer, environmental and even some industry groups who are opposed to constructing terminals for exporting liquefied natural gas (LNG).

Unlike oil, the price of natural gas is set in the domestic market. Right now, American consumers and businesses are reaping a windfall from the lowest natural gas prices in 10 years. Cheap gas has reduced heating and electric bills for millions of households, while industries using natural gas as a feedstock or boiler fuel have realized huge production cost savings.