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Here’s a letter to the Wall Street Journal:
Editor:
Kyle Isakower identifies several sound reasons why banning exportation of refined fuels would be counterproductive (“Export Ban Would Mean Higher Gas Prices for Americans [2],” July 27). But he misses the most fundamental economic reason – namely, by cutting American refiners off from global customers, banning exports would reduce the long-run stream of profits anticipated from building new refining capacity, and even from improving and maintaining existing capacity. And so even if an export ban, by somehow not triggering the issues identified by Mr. Isakower, would result in lower fuel prices today, the long-run result of denying American refiners’ access to global customers would be reduced investment in refining capacity and thus higher fuel prices over the long haul.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030