White House Slammed for ‘Restrictive’ Energy Export Policies
The U.S. is missing an opportunity to become a global powerhouse “as antiquated federal laws that limit energy exports are undermining our long-term foreign policy interests while violating our international trade commitments,” according to a new research paper published by the American Council for Capital Formation (ACCF).
The paper outlines what the Washington, D.C.-based economic policy group asserts is a pattern of “U.S. resource nationalism that harms the economic and energy security of these important allies by denying or limiting direct access to our resources and by reducing global supplies, resulting in higher energy prices.”
Resource nationalism, the group says, “is the use of government intervention to control the trade of a resource in order to pursue a benefit perceived as unavailable under free trade.”
The Obama Administration’s stance on the issue, the report claims, exacerbates “the negative impact of our energy trade controls on allies in East Asia, specifically Japan, South Korea, and Taiwan” and “adds only a small number of special interests receive the benefit – e.g., protection from foreign competition – while the vast majority of American consumers are harmed economically.”
Addressing the White House’s recent announcement of a nuclear agreement with Iran that will lift oil sanctions, “it’s now more critical than ever that we remove our energy trade restrictions as soon as possible. If the United States continues to be the only leading nation with limits on domestically produced exports, our global leadership and credibility will be in jeopardy,” said ACCF Executive Vice President George Banks.
Banks notes the increase in resource nationalism arguments in the U.S. when it comes to maintaining restrictions on LNG exports and the crude oil export ban, and targets the “conflicting nature of these policies when it comes to the pursuance of legal action in the World Trade Organization (WTO) against similar policies from countries such as China.”
This, says Banks, “serves to complicate Washington’s ability to continue pursuing these WTO actions,” as well as defend any possible challenges brought against the U.S. by other parties.
“While the policy of resource nationalism is tempting to many, it’s a misguided one, providing only short-term benefits to certain special interests,” he adds. “It is not the path forward for the United States. Rather than restricting energy trade, we must take a leadership role in protecting free trade of all our strategic resources to further global economic growth and stability.”
The government policies specifically covered in the paper are those restricting overseas sales of liquefied natural gas (LNG); the ban on exportation of domestically produced crude oil; the localized review process for exporting coal; and the trade in nuclear technology intended for non-military use.
“Rather than restricting energy trade, we must take a leadership role in protecting free trade of all our strategic resources to further global economic growth and stability,” says Banks.
“It is time for Washington to act quickly and remove these outdated barriers that have no place in the new American energy landscape of the 21st century,” he concludes. “The United States has a tremendous opportunity to pull the levers of energy diplomacy to ensure our allies and emerging economies have access to the energy they need while supporting peace around the globe, but unfortunately, our current energy trade restrictions are standing in the way.”
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