OK, fill 'er up and turn her around. Tugboats escort the BP Plc British Pride oil tanker into the harbor in Long Beach, California. Photographer: Jonathan Alcorn/Bloomberg
OK, fill 'er up and turn her around. Tugboats escort the BP Plc British Pride oil tanker into the harbor in Long Beach, California. Photographer: Jonathan Alcorn/Bloomberg

As crude oil production surges in the U.S., the question has gained urgency: Should the government lift a 40-year-old ban and allow some of this bounty to be exported?

And the answer is a clear "Yes" -- then the oil business could boom to its full potential, with all the job creation and economic stimulus that entails.

The main objection, judging from the Senate hearing on the issue last week, is that unless the U.S. keeps hoarding its oil, Americans will pay more for gasoline, heating oil and jet fuel (via airline ticket prices). This argument is largely based on the price of U.S. crude, now about $10 a barrel lower than the global oil price. U.S. refiners have access to cheaper oil, so that should mean cheaper gasoline for Americans, right?

Not exactly. Yes, U.S. refiners can take advantage of lower U.S. oil prices, but they don't necessarily pass along their savings to American consumers.

After all, even though U.S. oil producers are confined to the North American market, U.S. refiners do business around the world. They sell diesel to Europe and South America, and gasoline to China. Thus, refined products in the U.S. are still heavily influenced by global prices.

To use hoarding as a strategy to keep American consumer prices low, you'd have to restrict exports of not only oil but refined products, too.

By allowing oil exports, Congress would let oil producers take advantage of the higher worldwide prices. And there is no reason to expect this would raise consumer prices in the long term. In fact, it might even lower them -- by removing a barrier to the global oil trade. "The less bottlenecks in a market, the less distortions there are," Amy Myers Jaffee, an energy expert at the University of California at Davis, said. "And generally the less distortions, the lower the price."

If it's truly consumers lawmakers are worried about, the best plan is to let oil be exported.

(Mary Duenwald is a member of Bloomberg View's editorial board.)