Banning Diesel Exports Won’t Solve Trump’s Biggest Problem: For the past few weeks, President Donald Trump has been noodling on a diesel export ban as a strategy for lowering fuel costs. As of this weekend, he is still “thinking about it very seriously,” despite strident opposition from the U.S. energy industry.
“That can oftentimes lead to a little bit of an increase on gasoline for cars, so we’re looking at it very seriously. We may do it,” Trump told reporters on Sunday. But implementing such a ban could backfire, with such consequences ranging from lower production by U.S. refineries and higher gasoline prices to a disruption of the global economy.
Although the price of diesel may seem esoteric to an individual whose only vehicles run on gasoline, it is intertwined with the larger U.S. economy. Diesel powers such heavy machinery as construction equipment, trucks, buses, ships, and tractors. If higher diesel prices drive up the cost of shipping goods, that extra expense will be reflected in the price tag of those items.
In theory, a person can decide to use less gasoline, resolve to drive less, or purchase an electric vehicle. But diesel use is something from which we don’t get to opt out.
“It’s almost impossible for you to extract diesel from your life as long as you buy groceries, or something on Amazon,” said Rory Johnston, an oil market researcher and founder of Commodity Context. “Your E.V. was likely delivered on a truck that was fueled by diesel.”
Diesel prices topped $6.38 per gallon this week. This is a result of the war in Iran and the closure of the Strait of Hormuz, which has severely constricted crude oil exports from the Middle East. But other factors have played a role, including the destruction of Russian refineries by Ukraine and a diesel export ban by both Russia and China. As diesel exports have plummeted from other sources, the United States has been the only country to lift its global supply.
The theory behind restricting or banning diesel exports is that more diesel would remain in the country, and therefore fuel costs would go down: If you ship out less,… https://newrepublic.com/article/215986/banning-diesel-exports-trump-prices