An Open Letter to President Obama and Energy Secretary Moniz

Dear President Obama and Secretary Moniz:

I implore you to advocate for and cajole Congress — specifically the Democratic members of both Houses — to eliminate the obsolete and now-mindless prohibition on the export of domestic crude oil.  Surely American roughnecks, America fracking crews, and American petroleum engineers deserve treatment equal to that of Iranian oilfield workers, engineers and mullahs.

It is well-known that approximately 150,000 domestic energy jobs have been lost in the past nine months, since oil prices began their freefall.  Many of those layoffs have been drillsite roughnecks and fracking crews.  Not surprisingly, working people are suffering much more than executives.  Soon the layoffs will extend further, to engineers and scientists.  We should seek to avoid excessive unemployment, and certainly try to avoid losing technical knowledge and expertise that has seen this industry outperform almost all others in job creation in the U.S.  As of now, the domestic price of oil lags well below where it should be.  West Texas Intermediate is priced at $5 to $7 below Brent, and that differential is clearly rooted in the prohibition on the export of crude.  Our refineries are not uniformly set up to accommodate light domestic crude.  Free trade will not only fairly compensate domestic producers, but it will also help restore competitive balance to the United States.  Once upon a time, there might have been a justification, or a plausible explanation, for keeping domestic crude in the U.S., as a way of insulating our economy from price shocks.  In view of the technological advances wrought entirely by U.S.-based energy concerns, that explanation no longer passes the “straight-face” test.

The technological revolution wrought by the U.S. energy industry (and the partial leakage of petroleum products overseas through exports of refined products) had a role in forcing Iran to the table, but Washington has given the back of its hand to this industry. As a result of various unfriendly initiatives and market distortions written into law, including the export ban, we are hollowing out our employment base.  There will come a day of reckoning if this is not reversed.  More immediately, the staggering layoffs described above (with more to come) hit roughnecks and other ordinary working people much worse than executives.  At the very least, we should allow a free market, including exports. It is absolute insanity to treat Iranian oil more favorably than domestic oil.  If the United States Government can justify spending tens of billions of dollars to bail out inefficient auto manufacturers to save jobs in the Midwest, why can’t it at least allow an efficient industry the opportunity to compete worldwide?  That’s not corporate welfare; it is common sense.  Any other path, including the one we now travel, punishes working people for no good reason.

Surprise me.  Please.

Sincerely,

Lee Kaplan

*Not to mention insulating General Motors from liability for concealed ignition defects that killed American consumers.

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