The GOP has a plan to address the high cost of diesel fuel, but a CNN expert said it would backfire.
Regular gas prices may see a small drop after per-barrel prices fell due to the Saudis using a pipeline to funnel oil to the other side of the country for export. Diesel keeps climbing.
Former representative and current U.S. Senate candidate Mike Rogers (R-Mich) and Sen. Chuck Grassley (R-Iowa), are promoting the idea that the U.S. should consider refusing to export its own diesel to other countries and instead use it only within the U.S. Senior business reporter at CNN, Matt Egan, explained that such a strategy might "backfire."
The fuel that powers goods transport across the U.S. by rail and truck reached a record high. It's adding costs to items shipped across the country, like goods, groceries and even oil and gas.
"So, these Republicans are saying it's a make-or-break-glass moment," said Egan. "They're saying, let's keep more American energy at home instead of sending it overseas. Researchers, though, they're telling me that not only would an export ban fail to make diesel cheap again, they warn it could really backfire."
If such an export ban were put in place, experts told Egan that prices might drop initially, but the effect would be temporary and localized to the Gulf Coast and Midwest, where there are many refineries.
"The problem is that overseas diesel prices would surge, and that's an issue for the West Coast and the East Coast, because those areas rely on imports. So diesel prices might not fall at all on the West Coast or the East Coast. They might actually go up. Not only that, but how are refineries are going to respond if they lose one of their biggest customers, foreign buyers? They're going to produce less fuel," he said.
Ultimately, that means less gas and higher prices.
George W. Bush's former energy advisor Bob McNally told Egan that an export ban would be "an A.P.E., an authentic policy error."
"In fact, he said this would be the king of the A.P.E.s. Now, perhaps this is why the White House is not embracing these calls for an export ban. A White House official telling me that the administration is not considering an export ban or restrictions, although this official added, at this time," Egan continued.
Still, there's pressure on the White House to fix the crisis created by the war in Iran. AAA reported that, since it began tracking fuel costs, it has never seen an 83 percent spike in price.
"Bottom line though, [on the] export ban: We're going to continue to hear these calls, but analysts don't think this is going to fix the problem. In fact, they warned it could make it worse," Egan closed.
