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It’s not even winter yet, and America’s Northeastern states are already experiencing both shortages and price shocks on heating oil. The headline at Bloomberg this week says it all: “New York, New England Ration Heating Oil Even Before Peak Winter.”

You can see the raw numbers comparing the average of the past five years to the weekly averages during the past year in this chart from the US Energy Information Agency:

The Saudi oil minister, Prince Abdulaziz bin Salman, just gave America a menacing warning about President Biden releasing oil from the strategic reserve to prevent an explosion in gasoline prices:

"However, it is my profound duty to make it clear to the world that losing emergency stock may become painful in the months to come."

Meanwhile — as US gas prices remain persistently high causing Democrats heartburn in this election year — American oil companies continue Trump’s policy of exporting hundreds of millions of dollars’ worth of crude oil and refined gasoline to Brazil, helping Bolsonaro keep his own gas prices low as he heads to his election runoff.

You can thank Senators Joe Manchin (D-WV), Heidi Heitkamp (formerly D-ND, now a lobbyist), Bob Corker (formerly R-TN, now a bankster), and Lisa Murkowski (R-AK) for this mess, at least in large part. And, of course, the fossil fuel interests who “lobbied” them in 2015 with piles of cash.

Back in 1975, after the hard lesson learned from the 1973 Arab Oil Embargo, Congress passed the Energy Policy and Conservation Act which required the president to put into place rules banning the export of American-produced fossil fuels to countries other than Canada.

Oil produced in the United States stayed in North America. We were still importing oil, but we stopped exporting what we produced here other than minimal amounts to Canada.

In 1979, President Jimmy Carter declared war on our dependence on foreign oil, telling the American people:

“The energy crisis is real. It is worldwide. It is a clear and present danger to our Nation. These are facts and we simply must face them. …

“I am tonight setting a clear goal for the energy policy of the United States. Beginning this moment, this Nation will never use more foreign oil than we did in 1977. Never.

“From now on, every new addition to our demand for energy will be met from our own production and our own conservation. The generation-long growth in our dependence on foreign oil will be stopped dead in its tracks right now and then reversed as we move through the 1980's…”

Carter put programs into place to cut our oil use (insulation, fluorescent light bulbs, automobile efficiency standards, etc.) but also announced that night that he was creating:

“[T]his Nation’s first solar bank, which will help us achieve the crucial goal of 20 percent of our energy coming from solar power by the year 2000.”

Carter’s rhetoric outraged the fossil fuel industry. A Republican campaign to distract from his message began by calling it Carter’s “Malaise” speech, even though he never once used the word malaise.

The following year, 1980, Ronald Reagan floated into the presidency on a river of big oil money. He promptly disassembled the White House’s solar panels as well as Carter’s program to achieve American energy independence by 2000 through energy efficiency and solar power.

Nonetheless, President Ford’s 1975 law banning US oil exports stood.  As a result, America reached oil independence during Trump’s presidency, as you can see from this EIA chart showing when production met consumption (the blue and brown lines that meet at the top).

Oil exports from the US (the yellow line) began to rise rapidly around 2015, when the aforementioned senators put forward the American Crude Oil Export Equality Act that legalized oil exports beyond Canada and was, later that year, rolled into an omnibus spending bill and signed into law by President Obama.

Then the administration okayed the 2017 sale of America’s largest refinery, in Port Arthur Texas, to Trump’s family’s Saudi patrons. Many in the business are now refining US crude here, leaving us with the poisoned air, waste, and cancers, and then earning billions by exporting the purified gasoline to other countries. 

Under Trump, US-located refineries went on an export binge, keeping gasoline prices low in other nations like Brazil, where Trump ally Jair Bolsonaro was facing a tough reelection.

Last year, for example, gasoline exports continued Trump’s trend and reached a record high with most of it going to Brazil and Mexico. As Bloomberg noted last November 5th under the headline “U.S. Gasoline Exports Surge Even as Americans Pay Up at the Pump:

“Refiners shipped 139,000 barrels [of gasoline] a day to Brazil, the highest volume in data going back to 1945.”

If that massive quantity of gasoline had stayed here it would, of course, have dramatically lowered US gas prices.

I can’t determine if the Saudi refinery in Port Arthur is feeding this market or not, but whoever is exporting gasoline is making a lot of money while keeping US gas prices high.

As the fossil fuel industry pulled down an eye-watering $138 billion in profits in just the past three months, gas refiners and retailers in America jacked up prices because of a supposed gasoline shortage here.

And the Saudis, as part of their deal to buy America’s largest refinery, gained:

“[T]he exclusive right to sell Shell-branded gasoline and diesel in Georgia, North Carolina, South Carolina, Virginia, Maryland, the eastern half of Texas and the majority of Florida.”

In other words, if you’re complaining about gas prices in those Red states you need to take it up with Prince Mohammed bin Salman, because Trump’s refinery sale means Saudi Arabia’s company is setting those US prices.

All of this is, in a word, nuts.

We’re producing enough oil to uncouple us from world supplies, and as time goes on and we move to electric cars and renewable energy supplies, we’ll be using less and less of it.

It costs an average of $23 a barrel to produce oil in the US from existing wells and $48 a barrel from new wells (which includes all the costs of permitting and ramping up to production). 

Oil could easily and profitably be selling for $60 a barrel in the US right now if we hadn’t gone along with the oil industry in 2015, and if we’d blocked the sale of our biggest refinery to the Saudis in 2017.

If we weren’t exporting about 30 percent of the oil we produce in this country, and then having to buy back that 30 percent from the Saudis and other producers, we could begin the process of uncoupling ourselves from the international oil markets that Russia and the Saudis are right now manipulating for their profit and our loss.

Mohammed bin Salman may have recently cut Saudi oil production, according to reports, simply to screw with Biden’s popularity in the US before the election, to fill American political offices with Republican stooges, and help Trump come back into office in 2024.

As The Wall Street Journal reported yesterday:

“Saudi Crown Prince Mohammed bin Salman, the kingdom’s 37-year-old day-to-day ruler, mocks President Biden in private, making fun of the 79-year-old’s gaffes and questioning his mental acuity, according to people inside the Saudi government. He has told advisers he hasn’t been impressed with Mr. Biden since his days as vice president, and much preferred former President Donald Trump, the people said.”

So why are we still buying Saudi oil? Why haven’t we put the Port Arthur refinery into US hands? Why isn’t oil in the US selling for, say, $55 or $60 a barrel, where oil companies could make a sweet profit and gas prices would float around $2.50 a gallon?

It goes back to that massive and expensive lobbying effort by Big Oil in 2015: a handful of fossil-fuel-owned Democrats (Heitkamp and Manchin, principally) joined Republicans in pushing the amendment through Congress that reversed President Ford’s 1975 ban on exporting American oil.  President Obama, over the loud objections of most Democrats, signed the legislation on December 18th of that year.

But that was then and this is now.

President Biden, trying to drive down gas prices, just announced he’s releasing 14 million barrels of oil from the US Strategic Petroleum Reserve. That’s the same amount of oil that US companies are exporting for highly profitable sale overseas every four days!

Noting that the fossil fuel industry, pushing an end to that export ban, had “greatly oversold the consumer benefits” in 2015, a massive new report from Public Citizen concludes:

“For crude oil, about 29% of U.S. production in the first six months of 2022 was exported. That is more than double the 12% exported in 2017 and quadruple the 7% exported in 2016, the first full year of unrestricted crude oil exports. In the first six months of 2022, 3.4 million barrels per day of crude oil were exported from the U.S., nearly three times as much as in 2017, when about 1.2 million barrels per day were exported.”

Republicans are running around screaming about Biden not authorizing new drilling leases in offshore or sensitive locations, while the oil industry is sitting on over 7000 unused leases.

And even if new leases were issued, and used as rapidly as is possible, it would be years before the oil coming from them was available on world markets.

This oil is being exported from America today. Right now. Right from under our noses. Making a fortune for a few billionaires and foreign countries while jacking American oil prices.

And we can stop that.

Some will argue that oil is traded internationally and we’re stuck with that. But that rule only applies to nations that are net importers. Countries that produce as much as they need (or more) set their own prices, which is why gasoline is selling right now for 11 cents a gallon in Libya, $1.28 a gallon in Kuwait, and $2.18 a gallon in Qatar. Gas prices are below $3 a gallon in dozens of countries as you read these words, and could be here, too.

But oil companies pumping in the US would very much prefer to sell at international prices around $90-$100 a barrel than a domestic supply-demand price of $60 a barrel. Which is why it’ll take the force of law — reinstating Jerry Ford’s 1975-2015 oil export ban — to make this work like it did up until the past 7 years.

And I get the total irony of arguing for cheaper gas prices, short term, to save the planet from global warming. But higher prices will simply, as Mohammed bin Salman and Vladimir Putin hope, increase chances of Republican victories and Trump back in the White House in 2 years.

As to the impact on our allies’ oil supplies if we stop exporting oil, we’ll also have stopped importing an approximately equal amount (see graphic above). There will be little to no effect on supplies; they’ll simply move around.

America is capable of energy independence and we don’t need to dance to the tune of Saudi Arabia and Russia. All it’ll take is the willpower that Jerry Ford mustered in 1975 to ban the export of American oil and refined oil products once again.

We can tell Saudi Arabia’s dictator and the most predatory oil companies to go screw themselves at the same time we do the best thing for average working Americans.

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