Diesel export ban idea won’t fix high prices: CEI analysis

Some lawmakers and candidates are calling for a federal ban on exporting diesel fuel as a means to bring fuel prices down. Sen. Chuck Grassley (R-Iowa), for example, called on President Trump to “put an embargo on diesel exports like presidents in the [1970s] put embargoes on [agricultural] products.” CEI experts adamantly oppose this idea.

Ryan Young, CEI senior economist:

There are no short-term fixes for high diesel prices. Export bans would politicize energy markets and invite retaliation while failing to solve the fundamental problem of scarcity.

But there are at least two long-term solutions.

Domestically, reducing regulatory barriers such as permits can encourage more capacity to come online.

Abroad, a credible end to the Iran conflict will help to restore lost capacity and make diesel prices less volatile.

Both of these options will take months or years to implement. But they will pay off in the long run by making diesel more abundant and more resilient against supply shocks. In the meantime, policy choices have consequences, and we have no choice but to face them.

Ben Lieberman, CEI senior fellow:

The best solutions to high diesel and gasoline prices involve less government interference in energy markets, not more.  Bottling up supplies in the U.S. by prohibiting exports may sound to some like a good idea, but it would have damaging long-term implications by sending a signal to producers that potential buyers can be cut off by Washington.