Why do liberals insist on demonstrating every day that they have no idea how markets work? Yesterday Rep. Ed Markey (D-MA) asked the White House “to determine whether [it has] the authority to take action to immediately halt all exports of U.S. oil, and if not, to work with Congress to give the Executive Branch authority to protect America’s vital resources.” The U.S. does export 1.8 billion barrels of oil a day, but all barrels of oil are not created equal. The U.S. often produces oil that is difficult to refine and contains high levels of sulfur. U.S. laws also require super-clean gasoline diesel. Therefore it is often economical to sell U.S. oil overseas so that cheaper to refine foreign oil can be imported. A 2001 study in The Energy Journal found:
In this paper we examine the price effects on crude oils of removing the U.S. export ban on Alaskan North Slope crude oil in 1996. We estimate the long-run impact of removing the export ban through the use of a time series intervention analysis. The results indicate that Alaskan crude oil prices increased between $0.98 and $1.30 on the West Coast spot market relative to prices of comparable crude oils as a result of removing the export ban. However, we find no evidence that West Coast prices for refined oil products–regular unleaded gasoline, diesel fuel, and jet fuel–increased as a result of lifting the ban.