Clause 5. No Tax or Duty shall be laid on Articles exported from any State. NOT!

Noel Maurer over at The Power and the Money argues that export prohibitions on oil (yes, that’s the U.S. prohibiting the exportation of oil to foreign countries) may be coming soon to a government near you. Or maybe should be, I’m not sure if he sees it as likely just yet.

“Now, the U.S. constitution forbids export taxes. But it does not forbid blocks on export infrastructure. And that is just what you are already seeing in the natural gas space! Last month, the Energy Information Administration reported that LNG exports could raise U.S. prices as much as 54%. Representative Ed Markey (D-Massachusetts) immediately responded: he demanded that the federal government should refuse to certify export projects “before all impacts on American families and businesses are considered,” and stated that he will introduce legislation “that would keep more American-made natural gas in America.”

The same pressures apply to oil, although it will be harder (but not impossible) to stop oil export projects. And while the constitution is crystal clear on export taxes, “No tax or duty shall be laid on articles exported from any state,” it is unclear as to whether the export of a product could simply be banned altogether, under either the necessary and proper clause or as a national security measure.

If the growth of world oil supplies fails to outpace demand, then the result is not likely to be smoothly escalating prices. Rather, the result is going to be ever-increasingvolatility in the oil market. Small shocks in either direction will lead to huge price swings. In that environment, export bans would be clearly attractive to consumers … and some producers might also welcome the market stability that they would bring.”

Now, I’m not entirely sure this would fly, but IANAL, much less a Constitutional scholar.   Also, I have difficulty picturing the Canadians not trying to do an end run around it, and a good chunk of their crude goes into what would be this now-saturated market. But Noel promises a follow-up. Stay tuned!

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