September 6, 2022 – RealClear Energy
To Bolster Fuel Supplies in the Northeast, End Talk of Banning Exports and Look to the Jones Act
By Christopher Guith
It is also bad domestic policy. Usually when prices rise, energy companies respond by increasing production. But a spike caused by an export ban would have the reverse effect, discouraging new investment by signaling greatly reduced access to energy markets.
In fact, a recent study from the American Council for Capital Formation (ACCF) found that a ban on petroleum product exports would have devasting effects—forcing refinery closures, job losses, and ultimately, higher gas prices. Experts at IHS Markit concluded the same thing for crude oil back in November, well before Putin invaded Ukraine. A crude oil ban, IHS concluded, would cause a “shock to the market” and increase our own domestic gasoline prices. And a recent analysis from RBN Energy concluded that refined product export bans would “likely lead to additional refinery closures on the Gulf Coast…remove supplies from the international market and result in higher international prices for gasoline and diesel.”
While export bans are a bad idea, the Biden Administration does have an opportunity to deliver a short-term solution that will ease supply concerns and lower fuel costs in the Northeast: Jones Act waivers.