If the United States government allowed the exportation oil and natural gas to any and all countries what impact could this have on the U.S. trade deficit? If the government lifted the policies what would be the positive and negative impacts? The U.S. has consistently been experiencing a trade deficit since the late 1990s with no signals or indications that we will reach a trade balance. Energy, particularly oil and gas, has been the one of fastest leading export for the United States since the shale boom of late 2009 “. Fortunately oil and gas is a resource that the U.S. has in abundance and holds a demand worldwide, yet the United States has a 38 year old policy that bans exporting oil ...view middle of the document...
S. exports for the reason of national security, foreign policy, and short term supply. To this day the Acts inhibit oil and gas companies to export crude products, only refined oil and gas products can be exported to selected countries that are commonly U.S. allies.
Impacts of Removal
The United States is experiencing an oil and gas revolution and has proven to reduce our trade deficit, help create stronger GDP growth, increase export balance of U.S. products, increase employment and U.S. wealth, and enable the U.S. to secure energy independence from countries that do not hold our best interest. As mentioned before refined oil and gas is exported to selected countries that have been approved by the President, but a shortage of refineries able to enhance crude oil into gasoline and diesel inhibits the U.S.’s full exportation potential.
Regionally, Texas has experienced the positive economic benefit from increased oil and gas production yet if the ban was lifted our state would reap even more growth because smaller exploration and production companies could directly export oil and gas without refining the product. The removal of the Act would increase expenditures for exploration and production drilling resulting in increased oilfield service activity that would create more direct and indirect jobs.
Similar to the positive regional impacts in Texas the national economy would experience further job creation, added governmental revenue, a reduction in the trade deficit, and the U.S. dollar would appreciate in value. The U.S. government has been operating a budget deficit for the past decade and with the increased revenue generation this would help reduce the deficit and reduce our reliance of offering Treasury securities to pay the interest on existing debt and/or to fund current operations. Since the “Great Recession” the U.S. has not experienced typical post-recession GDP growth and this has created an ugly scenario of slow job growth, household incomes to below the 2007 recession, and a devaluing of the U.S. dollar. Exporting oil and gas to countries that hold large amounts of U.S. Treasury securities and U.S. currency would help appreciate the value of U.S. currency and help grow the U.S. economy.
Additional an increase of U.S. exports would create positive impacts on the global economy such as increasing the ability of emerging markets to power growth, aid allies from importing oil and gas from countries hostile to Western and pro-democracy governments, stabilize oil supplies and pricing, and increase global wealth generation. In the wake of the Ukrainian and Russian conflict the United States could provide greater energy security to Europe and Ukraine and reduce political impacts of dealing with other hostile energy producing nations.
The definition of a trade deficit is an economic measure of a negative balance of trade to which a country has more imports than exports. The trade deficit has been a wildly...