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State Lawmakers Call for End to Oil Export Ban

One state has been the leading oil producer in the U.S. for decades. The other is somewhat new to the business as we know it today. Together, they represent 60 percent of U.S. onshore oil production. And while these two states are more than 1,300 miles apart, last week, a bipartisan chorus of lawmakers in Bismarck and Austin were singing from the same sheet of music: it’s time for Congress and the Obama Administration to repeal the decades old ban on crude oil exports.

While the oil and gas supply chain reaches every corner of the country, as recently noted in a new study from IHS Energy, lawmakers in Texas and North Dakota understand more than most the benefits a robust and healthy oil and natural gas industry has on local communities and the state’s economy. From the good paying jobs and the state and local tax revenue, to the entrepreneurs who are developing tomorrow’s technology today, the exploration and production of oil has provided these communities with new opportunities and revenue that is now at risk.

The risk, as noted in the resolutions offered by lawmakers in both states, is a long outdated and little known Federal law enacted four decades ago in the aftermath of the oil embargo.

As noted in the North Dakota resolution, which passed the state house and senate, this policy was put in place during a time that no longer reflects today’s energy economy.

“The continued oil production in this region and across the United States has provided the opportunity for economic growth and stability through the export of crude oil and the prohibition on exports of crude oil is no longer necessary.”

Here’s what policymakers in North Dakota had to say about the resolution and repealing the ban:

  • Sen. Jessica Unruh: “We have an opportunity to become an energy superpower, instead we find ourselves in a price war with countries we have allowed to monopolize the global markets… It is clear that allowing domestic energy producers – like those here in the Bakken – to sell crude on the global market would greatly benefit our state and our nation and that is why the committee on Energy and Natural Resources has unanimously approved this concurrent resolution and hopes this body will concur.” (remarks on the Senate Floor, March 11)
  • Rep. Mike Lefor: “The world’s major developed nations all allow crude oil exports. We are the only nation not taking advantage of the world market. Numerous studies have shown that allowing US crude oil on the world market export will increase production while creating an estimated 394,000 jobs.” (remarks on the House Floor, January 28)

In Texas, a bi-partisan group of more than 100 representatives in the House, led by Representative Rafael Anchia (D), signed on to a resolution (HCR 57) that calls the ban a “relic from an era of scarcity and flawed price control policies” while noting that repealing the ban will “strengthen U.S. geopolitical influence by giving our trading partners a more secure source of supply, and allowing the export of American crude oil will make our allies less dependent on crude oil from Russia and the Middle East.

Here’s what they’re saying about HCR 57 and crude oil exports:

  • Rep. Brooks Landgraf: “A repeal of the crude oil export ban would help our economy here in the Permian Basin and it would also strengthen the geopolitical standing of the United States in the world.”
  • Railroad Commissioner David Porter: “Not being able to export into the international oil market with every other country in the world makes us subject to volatile OPEC prices. Currently, WTI crude is valued at around $50 a barrel, while Brent prices are roughly $60. That’s a 20 percent spread. With Texas producing about three million barrels per day (Source: EIA), that’s about a billion dollar difference each month for our economy.”
  • Houston Chronicle Editorial Board: “The bipartisan document, HCR 57, lays out a robust argument for ending our nation’s one-way ticket policy on oil, from the positive impact it would have on international relations to the stability it would bring to global markets.”
  • Rep. Drew Darby:  “Congress should update our national trade policy to benefit Texas producers and consumers.”
  • Railroad Commission Chairman Christi Craddick: “The U.S. crude oil export ban that was put into place decades ago no longer makes sense in current times. While trade restrictions put a strain on this important American industry and threaten future oil production, expanding markets for U.S. crude oil will incentivize production and create a more vibrant energy sector.”
  • James LeBas, economist and former Texas chief revenue estimator: “We’re sort of driving down the road with the windows open and hundred-dollar bills flying out the window for no reason.”
  • Railroad Commissioner Ryan Sitton: “I applaud the Texas Legislature for recognizing the importance of lifting the oil export ban.  The growth in production in Texas and the United States over the last six years has dwarfed production in other countries.  We are in a position to establish a new normal whereby we get beyond discussions of energy independence and focus our efforts on dominating global energy markets.  To fully realize this opportunity, the United States needs a comprehensive energy plan; something we haven’t really ever had. […] I fully support our state’s strong stance to make these energy policy changes a reality and allowing Texans to compete in a market free of government manipulation.”

The broad and bipartisan support for these resolutions demonstrates the heightened sense of urgency to modernize our energy policy so that these two states – and the nation – can fully benefit from this new era of U.S. energy abundance.

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