Oil production in the United States has increased by more than 80 percent since 2007, and over the same period calls to repeal the ban on crude oil exports have intensified. Since its enactment in 1975 in response to the Arab oil embargo, the ban has been one of only a few exceptions to trade liberalization in the United States and most of the developed world. Some view the ban as an anachronistic vestige of the protectionism of a previous era. Others see it as an essential aspect of U.S. security that provides energy certainty for American citizens in an uncertain world. Regardless, many in the energy industry and in Congress are more frequently expressing support for eliminating the ban. Perhaps even more significantly, the White House has signaled a growing willingness to consider the issue.

Why all the attention? In a word: shale. The shale revolution, driven largely by rapid technological advances in hydraulic fracturing and horizontal drilling techniques over the past decade, has increased U.S. oil production to record levels. America has become inundated with “light tight oil” pumped from shale formations. Most U.S. refineries are better equipped to process heavier crude that comes from the Middle East and other traditional import sources. Though many U.S. refineries can process the lighter, sweeter types of oil, it is more expensive and less efficient to do so. The net effect is that American refiners buy U.S.-produced oil at a strong discount compared to world prices.

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