Ron Wyden

Post image for Six Reasons Not To Ban Energy Exports*

[* This column is a lightly edited version of my post earlier this week on National Journal’s Energy Experts Blog.]

You know we’re deep into the silly season when ‘progressives’ champion reverse protectionism – banning exports – as a solution to America’s economic woes. Congress should reject proposals to ban exports of petroleum products and natural gas for at least six reasons.

(1) Export bans are confiscatory, a form of legal plunder.

As economist Richard Stroup has often pointed out, property rights achieve their full value only when they are “3-D”: defined, defendable, and divestible (transferable). A total ban on the sale (transfer) of property rights in petroleum products or natural gas would reduce the asset’s value to zero (assuming no black market and no prospect of the ban’s repeal). To the owner, the injury would be the same as outright confiscation. A ban on sales to foreign customers would be similarly injurious, albeit to a lesser degree.

The foregoing is so obvious one is entitled to assume that harming oil and gas companies is the point. I would simply remind ‘progressives’ that the politics of plunder endangers the social compact on which civil government depends. Why should others respect your rights when you seek to deprive them of theirs? Every act of legal pillage is precedent for further abuses of power. Do you really think your team will always hold the reins of power in Washington, DC? [click to continue…]

Post image for Will Markey’s Keystone Export Ban Come Back to Bite Him?

File this one under “be careful what you wish for.” Rep. Ed Markey (D-Mass.) must have thought he was being very clever. At a recent House Energy and Commerce Committee meeting on legislation to authorize construction of the Keystone XL Pipeline, Markey introduced an amendment banning U.S. exports of petroleum products made from Keystone crude.

For Markey, the amendment was never a serious legislative proposal. For one thing, as explained on this site and MasterResource.Org, an export ban would violate U.S. treaty obligations under both the General Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement (NAFTA). In addition, Markey knew Republicans could not support the ban without jeopardizing the long-term supply contracts that pipeline builder-operator TransCanada Corp. had negotiated with Gulf Coast refiners — contracts on which the project’s commercial viability depends.

In fact, Markey was counting on Republicans to vote against the ban, as that allegedly would expose them as duplicitous shills who care only about oil industry profits, not about reducing dependence on OPEC or alleviating pain at the pump. As also explained in the previous columns, Markey’s exposé is itself bogus, because (1) Keystone crude would displace OPEC crude whether the associated refined products were sold domestically or overseas, and (2) much of the refined product would likely be sold in the USA.

This just in: What Markey introduced as a rhetorical prop may be sprouting legislative wings in the Democrat-controlled Senate, where it could win votes to overturn President Obama’s rejection of Keystone XL. [click to continue…]