The Antiquated Ban On U.S. Oil Exports

However, a coalition of congressmen led by the GOP is now calling the law outdated, arguing that lifting the ban would yield substantial economic benefits. At a press event on Capitol Hill, Boehner said that allowing U.S. drillers and frackers to export their product would lower prices at the pump for consumers, create a million jobs and benefit American allies.

Related Link: Gartman: We're Headed Toward "Fruits Of Fracking," Net Exports In U.S. Oil

According to Joe Brusuelas, chief economist at McGladrey, allowing exports would create an opportunity for increased investment, disposable household income and employment. Furthermore, he told Benzinga that the ban was perpetuating market inefficiencies.

An Antiquated Policy

According to the EIA, weekly U.S. field production of crude oil has risen more than 70 percent over the past decade. In fact, crude output in the United States has increased more than any other country over the past year, even as domestic consumption has receded. As a result, American storage facilities are full to bursting. This March, about 75 percent of working storage capacity was being utilized. In March 2014, the figure wasn't even 50 percent. Many experts, including Brusuelas, are pointing to a domestic oversupply as reasons to pursue an open trade policy.

Furthermore, despite this supply glut, many American refineries are ill equipped to process the oil. Most U.S. facilities were built to handle heavy crude harnessed either overseas or from older drilling operations. However, since the fracking revolution, there has been an influx of light crude into the domestic market, despite the lack of infrastructure to convert it into gasoline or other useable compounds. "This oil would be better refined in Europe where their energy infrastructure is closer aligned with the oil lifted in new production areas," said Brusuelas.

Related Link: Should The U.S. Do Away With 40-Year Crude Oil Export Ban?

While it is clear that allowing exports would reduce many of the inefficiencies currently plaguing the market, it is questionable whether a policy shift would stimulate investment. Assuming a continued increase in light oil production, the EIA estimated $11 billion in investment by 2025 to improve domestic processing capacity under current regulations. However, in a scenario in which trade restrictions were eased, the agency presented a much more conservative figure of $2.3 billion.

Consumer Benefits

The most contentious point of debate surrounding the export ban is what a shift in policy would do to domestic gas prices. But the consensus among economists and energy experts is that prices at the pump would go down.

According to an analysis by Resources for the Future, lifting the ban would boost crude oil production and increase global refinery efficiency, stimulating gasoline production and thus depressing prices in the United States.

But by how much? Estimates vary. Resources for the Future pegged the benefit to consumers at between two and five cents per gallon, while Brusuelas forecasted as much as 11 cents. He said that the average American household would enjoy an extra $425 in disposable income.

In addition, Brusuelas believes that lifting the export ban would create 400,000 jobs related to extraction and transportation, as domestic production increased to meet the needs of a global market. While the figure is much less than Boehner's million-job projection, Brusuelas did not include employment opportunities that would potentially arise in shipping, construction and other sectors.

Domestic oil companies have laid off hundreds of thousands of workers since crude prices began declining in 2014 due to global oversupply.

In most respects, therefore, it seems that allowing oilers to export their product would be a net positive for the United States. The policy adjustment would promote market efficiencies, put more money in consumers' pockets and boost employment. Furthermore, it would likely immediately add billions to annual GDP.

Although politics may distract from economics, substantial momentum in the House and the backing of many economists and interest groups are promising positives for a bill to open the American oil market to the world.