U.S. lawmakers donât drive around in 1970s-era cars, yet they donât seem to mind energy policies that are equally out of date. Attempts to export shale oil and gas, for example, have run smack into legal and regulatory barriers as old as a Gran Torino.

Energy companies have been urging Congress to lift the lid on exports and start treating oil and gas again like any other commodity thatâs freely traded in world markets. Tapping global demand for U.S. shale oil and gas, they say, will spur domestic production and create even more jobs in a sector thatâs already racked up robust employment gains.
Russiaâs naked power play in wresting Crimea from Ukraine has given fresh impetus to the export push.
From outraged Republicans to eastern Europeans living anxiously in Moscowâs shadow come calls to use Americaâs shale windfall to wean Europe off dependence on Russian gas, oil and coal.
The idea that surging U.S. gas and oil production is a new source of geopolitical power is a seductive one, though there are practical difficulties inherent in using energy as an instrument of foreign policy.
Vladimir Putinâs Russia is not as scary as the Soviet Union, but it remains an energy superpower. Moscow supplies Europe on average with roughly a third of its energy; many Baltic and central European countries rely almost completely on Russian gas, oil and coal. Some observers think such realities have muted Europeâs reaction to Putinâs aggression.
Taking market share from Moscow would diminish its political leverage, while also weakening its petro-centric economy. Energy accounts for as much as a quarter of Russiaâs GDP, 60 percent of its exports, and the lionâs share of its revenues. The problem, of course, is that Washington doesnât export oil and gas, companies do. They go where the profits are, not where geopolitics dictates.
In any event, U.S. gas and oil exports are stalled by old laws and rules as well as potent domestic opposition. For example, the 1975 Energy Policy and Conservation Act bars most exports of U.S. crude oil. Exporting natural gas isnât illegal, but it requires getting the U.S. Department of Energyâs approval to build terminals for liquefying the gas so it can be shipped overseas. Amid industry complaints that the Department of Energy is slow-walking approvals, Congress recently held hearings on ways to expedite LNG export licenses.
Americaâs import-oriented energy policies are a legacy of the 1970s energy crises. They are predicated on an assumption of fossil fuel scarcity and U.S. vulnerability to volatile global oil markets. Todayâs reality is abundance, thanks to horizontal drilling techniques and shale fracturing, aka, âfracking.â Next year, the United States is expected to overtake Saudi Arabia as the worldâs largest oil producer.
The energy world has been turned on its head, but U.S. policies havenât changed. Powerful interests are invested in preserving the status quo. Chemical companies, which use natural gas as a feed stock, say ramping up exports would raise domestic gas prices and thereby threaten a revival in U.S. manufacturing. Some analysts say weâd be better off using more natural gas in the transportation sector, for cars as well as heavy-duty trucks, because this would cut both carbon emissions and oil imports.
The fiercest opposition to exporting oil and gas comes from environmental activists. In an open letter (PDF) to President Obama, a coalition of environmental groups led by anti-XL Pipeline crusader Bill McKibben, slammed the administrationâs plans for building LNG terminals along U.S. coastlines. âWe believe that the implementation of a massive LNG export plan would lock in place infrastructure and economic dynamics that will make it almost impossible for the world to avoid catastrophic climate change,â the letter asserts. Most of the nationâs fossil fuel reserves, it adds, should stay âin the ground.â
Itâs highly unlikely, though, that the public will support attempts to stuff the shale genie back in its bottle. According to the U.S. Energy Information Administration, jobs in the oil and natural gas industry grew by 32 percent between 2007 and 2012, even as overall employment fell 11.4 percent. The glut of cheap gas is also a boon to energy-intensive industries in the United States, which are beginning to attract significant investment from Europe, where energy costs are much higher.
Moreover, itâs not a foregone conclusion that taking advantage of Americaâs shale bonanza will bring on an environmental catastrophe. On the contrary, fuel switching in the electricity sector from coal to natural gas already has brought a 10 percent decline in U.S. greenhouse gas emissions, according to the Environmental Protection Agency. If gas catches on as a transport fuel, that also would yield lower emissions. In any event, fossil fuels will continue to be a major part of Americaâs fuel mix for decades to come, green fantasies notwithstanding, and lawmakers must manage the nationâs energy portfolio â including zero-carbon-emitting nuclear energyâin a way that both spurs economic growth and reduces the risks of global warming.
In truth, no one really knows what will happen if America once again becomes a major energy exporter. We canât say for sure whether domestic prices will spike, or how global markets would react to an influx of U.S. oil, or what the net effect on global carbon emissions would be. Nor is it certain that exports by energy companies would buttress U.S. diplomacy. The sensible course is to experimentâto lift restrictions on oil and gas exports at a measured pace, measure economic and environmental impacts, and make adjustments as we go. That should be part of a political bargain in which Democrats agree to ease export controls in return for GOP support for more public investment in research and development of renewable fuels and clean technology.
What makes no sense is to let the dead hand of 40-year-old energy policies constrain Americaâs freedom of action today. As the shale revolution approaches its 10th anniversary, itâs time to bring U.S. energy policy into the 21st century.
Will Marshall is the president of the Progressive Policy Institute.