With America now a net energy exporter and New Mexico a long-term energy producer, we at the Rio Grande Foundation have spent a fair amount of time supporting the opening of new markets for both oil and gas. Specifically, the Foundation worked to allow crude oil exports and liquefied natural gas exports.
Now, some oil and gas producers who have found that they are unable to compete with foreign competition, are working to impose limits on oil and gas imports. I don’t think they’ll have much success in Washington and I don’t think Gov. Martinez and the Legislature can do anything even if they want to (which I doubt they do), but this just doesn’t look good for an industry that typically prides itself on competing in a global marketplace and pricing its products in response to those market forces.
Americans are benefiting at the pump from the new technologies being deployed in the oil patch every time they fill up. They aren’t going to go for import limits to drive up the price. Worse, unfriendly (anti-oil and gas) lawmakers, and there are plenty, will use pleas for government protection to bully the industry even more than they already do.
In recent years the industry benefited from high prices and booming production due to new technologies. As an aside, this has already reduced the need to import oil into the US. Now, prices are down, but that will change. Asking for government protection is no way to restore market balance. New Mexico oil and gas producers should abandon the idea immediately.
One Reply to “Sorry oil and gas producers, but free trade works both ways”
At some point the glut will work itself out.