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Political support to lift the U.S. ban on exporting crude oil is gaining momentum in Congress, yet the White House opposes legislation banning the ban. The underlying problem is that the export ban was instituted as a tactic to achieve a strategic goal, which no longer makes sense. A new national energy strategy, however, has not been articulated, nor is there any indication this is forthcoming. How can the oil export ban question be addressed in this strategic vacuum?

Imagine the federal government deciding to ban the export of automobiles or agricultural products in order to secure a steady supply for American consumers. The net impact would include a significant drop in economic output and massive job losses. Consumers would pay more for American cars, and manufacturers would lose market share to foreign competitors. Food prices would increase sharply, and many smaller farms and related businesses would go bankrupt.

Of course, there are situations in which it makes sense to restrict exports—temporarily. During WWII, American producers weren’t exporting to Germany, both to avoid helping the enemy and meet the needs of our military. After the war, exports resumed and our economy roared.

In the 1970s, the U.S. imposed a crude oil export ban in reaction to several factors, including the Arab oil embargo in retaliation for our support of Israel, rising energy prices and peaking domestic production. For the last 40 years, the ban has stayed in place ostensibly as a means (tactic) towards energy independence (strategic goal).

Has the export ban helped the U.S. achieve energy independence? Oil imports increased by 392 percent through the 1970s to 2.38 billion barrels per year. Imports then declined through 1985, after which imports rose over 200 percent to 3.7 billion barrels per annum in 2005. Since then, oil imports have declined steadily by 28 percent. The oil export ban has proven somewhat successful, since much more oil would have been imported prior to 2005, and afterwards domestic production has finally been alleviating our dependency.

Can energy independence be achieved? Since the shale revolution began in 2008, crude oil production has increased nationwide by 74 percent, which accounts for the decline in imports. Oil production would have to increase by another 85 percent to cover the full amount of imported crude. Given fracking’s potential, combined with ever-increasing technological efficiencies, it is possible to produce enough oil to eliminate imports.

However, it’s not as simple as increasing production. Shale oil is sweet, light crude and most U.S. refineries are configured to process heavy, sour crude. While some domestic refineries are being upgraded to also process sweet crude, shale oil production will still exceed refinery capacity as early as 2018. As well, no plans have been announced to build new large-scale refineries, which would be enormously expensive.

The first domestic refinery to be built since 1976 opened in May near Dickinson, North Dakota. Dakota Prairie Refinery (DPR) processes 20,000 barrels of sweet crude per day, which is less than 2 percent of Bakken production. Still, DPR cost $400 million. What would a refinery capable of processing a half-million barrels per day cost? What would ten of them cost?

In the absence of sustained high oil prices, investments on that scale, especially in the context of onerous Environmental Protection Agency (EPA) regulations and opposition from environmental activists, would only be made as part of a national energy strategy—which is missing.

Since the 1970s, American president after president has failed to generate a comprehensive plan for energy security. Creating such a plan has become urgent considering the growing chaos, violence and threat of a major war in the Middle East, which could disrupt oil exports from that region.

As well, the recent nuclear deal with Iran could dramatically increase the likelihood of escalating conflicts throughout the Middle East. Significantly, the deal includes lifting the ban against that country exporting oil.

Clearly, national energy policy makes sense only in the context of foreign policy. Yet missing again is a comprehensive American foreign policy strategy, about which our allies have been voicing increasing concern for several years. This vacuum also dampens criticism of U.S. policy since there is no objective by which to assess it. Any specific action can be seen as completely effective or completely ineffective. Policy, as a result, is adjudicated by polls.

In the meantime, permitting producers to access international markets would at least help companies stay in business. A recent report by Wood McKenzie, a global consulting firm, estimates “that $1.5 trillion of uncommitted spending on new conventional projects and North American unconventional oil is uneconomic at $50 a barrel.” Tough times might last and worsen. It would be prudent to increase the odds there will enough oil being produced to export when (if) a future administration develops national strategies. Ironically, lifting the ban now is the only way to ever justify one later.

New Reality, New Legislation

Since 2008, horizontal drilling and hydraulic fracturing, primarily in the Bakken and Texas, have propelled the U.S. to become the world’s largest producer of petroleum products, nearly doubling Saudi Arabia’s output. “America’s energy landscape has changed dramatically since the export ban was put in place in the 1970s. We have moved from energy scarcity to energy abundance,” said Senator Lisa Murkowski (R-AK), the Senate Energy Committee Chair. “Unfortunately, our energy policies have not kept pace.”

In response, Sen. Murkowski introduced a bill in May that would permit the export of crude oil. The legislation has been gaining support among Republicans, including North Dakota’s Senator John Hoeven and Congressman Kevin Cramer, and Democrats. Significantly, the bill was co-sponsored by Senator Heidi Heitkamp (D-ND). Given the rarity of bipartisan cooperation in recent years, the eventual passing of legislation in both chambers seems hopeful.

Strategic Thinking

Coherent strategic thinking involves four key aspects: (i) identifying a strategic goal, with realizable, measurable outcome(s); (ii) aligning all tactics with the strategic objective; (iii) adhering to a timeframe that will lead to success, while depriving the opponent (or status quo) of the ability to react; and (iv) forming an exit plan to transition effectively from success or failure.

This summarizes the strategic approach created by USAF Col. John A. Warden III (Ret.) who was the strategic architect of the successful U.S. air campaign in Gulf War I, which saved tens of thousands of lives on both sides. Col. Warden is currently the president of Venturist, Inc., a strategic planning, consulting and executive training firm. As well, Col. Warden has written several articles applying strategic thinking to international security issues on Forbes.com with this article’s co-author, Patrick J. McCloskey.

The first two aspects of strategic thinking are especially relevant here. The strategic goal is all about determining the desired future, which means envisioning an objective, quantifiable picture of the future that an individual or organization wants to create. This “future picture” acts as a beacon telling the planner where to end up, but it doesn’t articulate the details of how to get there. Often this is overlooked, resulting in tactics being mistaken for strategy, which can be fatal. Consider the Vietnam War, during which American armed forces successfully executed a wide range of tactics over many years. Tactical victory was almost perfect, yet the U.S. lost the war precisely because tactics were not aligned to a coherent future picture.

To align tactics with strategy, a realizable goal must be articulated. Pulling U.S. troops from Iraq in 2011 was a strategic goal regarding domestic politics but was tactical in foreign policy terms. Ergo, the chaos. The move appeared to be the execution of an exit plan, but it was hardly effective, not connected to a coherent strategic military or geopolitical goal, and constituted abandoning a precarious situation. As Obama’s military advisors warned, massive destruction ensued and now the Islamic State of Iraq and al-Sham (ISIS) threatens to unite Sunnis from southern Iraq to Pakistan into a radical Islamic caliphate determined to oppress its own people and destroy the West.

This scenario and the Iran deal are significant here since top regional oil exporters, such as Saudi Arabia, are now caught in a dangerous trap. It seems likely they will invest large sums in developing nuclear weapons, while simultaneously fighting both Iran’s Shiite proxy forces and ISIS.

The Big Ouch

Before ISIS was allowed to become a major threat and before the U.S.-Iran deal, the Saudis initiated a strategic attack on American shale oil producers, which they considered a threat. For decades, Saudi Arabia adjusted its production to keep world oil prices high. Last October, the Saudis believed that causing oil prices to fall from over $100 to $80 per barrel would prove fatal for U.S. companies. But they adjusted quickly and oil production increased. Prices fell below $50 in February and then rallied for a few months, which turned out to be like a dead cat bounce as prices tumbled below $39 in August. Approaching the end of September, prices were back in the mid-$40s, but no one knows whether felines or bulls will dominate the future.

The Saudis are losing about $300 million per day, which amounts to almost $110 billion a year. Worldwide, oil producers are projected to lose $4.4 trillion over the next three years, according to the Wall Street Journal.

Bakken producers are losing over $70 million per day, which negatively cascades through the region’s economy and impacts state tax revenues. Also, the ban causes shale oil companies to sell at a significant discount, averaging about $5 per barrel. This amounted to a loss of almost $190 million in 2014. While this is a sustainable loss at $100 per barrel, it becomes a matter of survival at $60 for many producers.

From rubbery cat mortality, the Saudis have proceeded to “dog chasing its tail” tactics. To make up for lost revenue, the Saudis increased production, which remains high. This contributes to lowering prices further and the barking death spiral accelerates. At the same time, global demand remains stagnant in many regions and growing only slightly in others.

What the Saudis need is an exit plan from a failed strategy. But after initiating a price war that has hurt OPEC and non-OPEC nations alike, the Saudis have lost much of their clout in setting world rates.

Iranian Oil & the Big Opportunity

The U.S.-Iranian nuclear deal will allow Iran to export oil freely, which could not come at a worse time. The current imbalance of supply and demand will persist through 2016, according to a recent International Energy Agency report—without new Iranian oil, which could amount to an additional 3 million barrels per day (bpd) in the coming years.

It is difficult to imagine why President Obama supports lifting the oil export ban for Iran, which is not an ally, and opposes lifting the ban on American producers. Once again, no U.S. strategic framework has been articulated within which to decipher this apparent contradiction.

Worse, Iran produces sweet as well as sour crude and could eventually compete for market share at refineries in Europe and even South America, if the ban on exporting U.S. crude remains in place. These refineries are configured for sweet crude, and production has stagnated or is declining among their traditional suppliers in the North Sea, Africa and Latin America.

According to a recent report by Turner, Mason & Company, consulting engineers, U.S. producers could profitably export “as much as 1.7 [million barrels per day] … to European and Latin American refineries.” This opportunity offers huge benefits to the U.S. at a most opportune time. As well, American producers can export profitably at less than half the cost of Iran’s breakeven price ($131), which would curtail Iran’s geopolitical influence.

Jobs as Job One

Consensus has been growing in support of lifting the ban among a wide range of businesses, labor unions, think tanks, foreign nations and prestigious academic institutions, such as Harvard Business School. They agree that lifting the ban will lower gas prices, increase crude oil investment, create jobs and secure America’s geopolitical standing.

Job growth estimates range from 300,000 to one million new jobs nationwide. Given the likelihood of sustained low prices, however, lifting the ban might not precipitate this in the short term. Meanwhile, letting producers, who are major job creators, create—and save—as many jobs as they can via competition is the best bet.

In the long term, the Bakken will be producing for decades. EOG Resources, Inc., for example, just increased its estimate of potential resources on its assets by 2.5 times to 1 billion BOE (barrel of oil equivalent, which includes all petroleum products).

Number Two and Trying Harder

In July, the Mercatus Center at George Mason University released its ranking of the nation’s states by fiscal condition according to short- and long-term debt and other key fiscal obligations, including unfunded pensions and health care benefits. North Dakota ranked second, due to “high revenues from the oil and gas industry” and state fiscal responsibility.

The legislative component was highlighted in April when the American Legislative Exchange Council released its annual report, “Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index.” The index ranked North Dakota second on both economic performance (through 2013) and economic outlook (for 2015). The top marginal tax rate for corporations in North Dakota is 4.53 percent, compared to 17.16 percent in New York, which ranks 50th. North Dakota’s continued fiscal prosperity depends on the Bakken, which is also critical to national economic growth.

Made in the USA, Again

A report by the Boston Consulting Group (BCG) in 2011 reached the astonishing conclusion that “[w]ithin five years … the cost gap between the U.S. and China for many goods consumed in North America” will close. Manufacturing costs are now 10 to 20 percent less than in major European countries, and many products will soon become cheaper to make than in China. The “U.S. can look forward to a manufacturing renaissance.”

In 2014, the International Monetary Fund (IMF) released a working paper titled, “The U.S. Manufacturing Recovery: Uptick or Renaissance?” The IMF praised the resilience of American manufacturing since the Great Recession, but a renaissance has not arrived quite yet. Both China’s and the U.S.’s shares of global manufacturing output have stabilized at 20 percent.

Essential to U.S. manufacturing’s future resurgence is the “significant reduction in domestic energy prices following technological breakthroughs in the exploitation of shale gas; in particular, recent advancements in drilling technology (including shale gas fracking) resulted in a significant increase in natural gas production in the U.S. and led to a reduction of domestic prices, which are currently about one fourth of those in Asia and Europe.”

Strategy (Beginnings) Found

Engineering a domestic manufacturing renaissance would involve a complex coordination of financial institutions, the small business and corporate sectors, and local, state and federal government legislators and regulators. Those issues are tactical and certainly doable. To begin, a renaissance could be proposed as a prime strategic goal for the nation’s future by private sector leaders and politicians who advocate economic growth.

Millions of jobs would be created in the long term and U.S. economic dominance would be reestablished, which would help restore geopolitical influence. This would help diffuse tensions in the Middle East, if tactically aligned with an effective foreign policy strategy, and prevent dead cat bounces. Volatility in oil prices harms economic growth.

Although not all factors required for a manufacturing boom are now present, the most important component is in place: cheap, reliable, safe and abundant energy. Lifting the oil export ban could safeguard this gift.

Energy & Moral Imperatives

Below is an illuminating graph, showing that the demand for oil will increase greatly in the long term as the economies of developing countries become robust. Keeping up with demand will become a far greater challenge than the current oil glut.

Accordingly, the U.S. oil industry can make a powerful case for its potential contribution at home and abroad to alleviating poverty. A massive increase in world demand will happen only because 85 percent of the planet’s population is finally climbing out of poverty. This imperative will only become more urgent as the world’s population is projected to increase by 2.4 billion people by 2050, overwhelmingly in impoverished countries. Affordable petroleum products are necessary conditions to transcending poverty.

Happily, American producers could help resolve this centuries-old plight and also generate enormous economic and geopolitical advantages, which the U.S. could use to address moral imperatives regarding the environment. It is essential to reduce both poverty and pollution.

Unilaterally reducing carbon emissions, for example, will have a negligible effect on world levels. The real challenge is to reduce carbon emissions and other contaminants at the same time as hydrocarbon use increases.

What the U.S. needs is a coherent national strategic framework to maximize international leverage through prosperity and increased investment in clean (conventional and alternative) energy research. On this basis, the U.S. could provide leadership in cultivating a balanced global strategy for properly developing human and natural resources.

In the meantime, lifting the oil export ban is a necessary prologue to this hopeful story.

A revised version of this article appeared in American Spectator on November 9, 2015.