Who says nothing ever gets accomplished in Washington? When the House of Representatives voted this fall to lift the nation’s 40-year ban on exporting crude oil produced in the United States, the measure seemed doomed in the face of White House opposition. But on Wednesday, congressional leaders settled on a massive spending and tax package, and, wonder of wonders, the resumption of oil exports made the final cut. Both House and Senate were expected to pass the legislation promptly (albeit grudgingly); President Obama has said he’ll sign it.
Like a lot of dubious ideas from the Nixon era — wage and price controls, the abandonment of the gold standard, the political misuse of the IRS — the oil export ban was a piece of folly that only grew worse with time. Imposed in the wake of the 1973 Arab oil embargo, it was one of several responses aimed at softening the blow of the oil shock on the US economy. The most notorious of those responses, gasoline price controls and rationing, were such obvious failures that they soon collapsed amid long lines and shortages at filling stations.
But the law barring US oil exports persisted. Policymakers imagined that forbidding producers to sell crude oil to foreign customers would enhance American energy by conserving domestic reserves and thus make the nation less reliant on imported energy. That's not what happened. US crude-oil production began to dwindle, shrinking from 10 million barrels per day in the early 1970s to only half as much by 2008. Far from depending less on imported petroleum, Americans required steadily more of it. When Nixon was in the White House, the nation imported 6 million barrels of petroleum daily; 30 years later, the daily intake of foreign oil had surpassed 13 million barrels.
In effect, America had imposed punitive sanctions on its own energy industry, the only significant oil-drilling country to so hobble its producers. After a while the export ban no longer seemed to matter. Production had fallen so far that there wasn't much crude oil to export anyway.
But then came the shale-oil revolution and the miraculous boom unleashed by fracking and horizontal drilling. Suddenly the United States was an oil-producing superpower again, with crude oil being pumped from the ground at a daily rate of almost 10 million barrels, a level not seen since 1970. In the space of a few short years, the United States had unexpectedly become the world's foremost oil producer. Yet thanks to an export ban that had never made sense, much of that oil had nowhere to go, and piled up in storage tanks. As of last week, US crude-oil inventories were at 490 million barrels, an 80-year high.
In a world thirstier for oil than ever, the absurdity of the US export ban at last became impossible to deny. Voices from across the political spectrum — elected Republicans and Democrats, as well as researchers at Columbia University, the Brookings Institution, the Government Accountability Office, the Aspen Institute, and Resources for the Future — joined in calling for exports to be revived. The realization had finally taken hold that, in a global energy market, to hobble American producers is to hobble American consumers, and the best way to enhance US energy security is to free US energy to compete in the market.
So goodbye to the oil-export ban. And good riddance to a policy that never worked as its advocates predicted. But let's not stop there. What we really should be jettisoning is the notion that the right to buy and sell across borders is a privilege that governments bestow or withhold as they see fit, instead of a human right — a natural liberty — that governments must not infringe except in extreme and very limited circumstances.
Human beings, by virtue of being human, are entitled to worship as they choose, to own property, to emigrate from their country, and to form peaceable associations. Those are fundamental rights, not dependent on the government's political preferences or utilitarian considerations. The freedom to engage in mutual and honest commerce is just as fundamental, and it should be just as immaterial whether lawmakers approve of the bargain struck between seller and buyer. Jones shouldn't have to lobby public officials for the right to hire Smith or teach Smith or pray with Smith, or seek Smith's opinion. Nor should he have to win government approval for the right to sell his goods and services to Smith. Not even if Smith lives in another neighborhood, or another state, or another country.
Edmund Burke, the great Irish statesman and philosopher of liberty, wrote in 1795: "Free trade is not based on utility but on justice." Your property and labor are your own, and so is your freedom to trade them with a willing partner. When legislators and regulators impose biased or inequitable barriers to free trade, they violate a universal human right. That is why they should be opposed by Democrats, Republicans, and independents alike.
Punitive tariffs or export bans, arbitrary quotas or domestic-content restrictions — all such impediments to peaceful commerce are transgressions against the rightful autonomy of free human beings. Prohibiting Americans who pump oil from selling that oil abroad was always economically short-sighted and counterproductive. But worse than that, it was immoral. The right to trade is as indispensable as the right to work. When politicians usurp that right, they render all of us less free.