As early as this fall, Congress may have the opportunity to lift a ban on crude oil exports and stimulate our national and state economies at a level we haven’t seen in over 40 years. The time is right and Americans are ready to increase domestic oil production and reap the benefits from international markets hungry for energy resources.
The current ban on crude oil exports dates back to the 1973 oil embargo, which resulted in soaring oil prices worldwide. In an effort to limit the impact of volatile global crude markets on America, Congress passed a variety of measures such as fuel standards for automobiles and limits on oil exports. The goal was to protect our domestically produced energy supply and reduce our dependence on imports.
While U.S. oil imports declined in the late 1970s and early 1980s, for instance, the American economy has continued to be impacted by fluctuations in global oil prices, like the dip we have experienced this year. In addition, much has changed in the domestic and international marketplaces since 1973. America is, after all, in a period of “energy renaissance” in recent years, with crude oil output soaring to a 32-year high. Exploration and production, particularly in the rich offshore waters of the central Gulf of Mexico, support jobs and business growth for Americans every-where and the opportunity for even greater expansion continues.
The U.S. now produces 9.2 million barrels per day. That’s up nearly 15 percent since 2013 and nearly double our domestic oil production in 2005. This year, in fact, the U.S. is now the top oil producer in the world, passing Russia and Saudi Arabia. America is truly an energy powerhouse. With this new position comes a unique opportunity to lift the ban on crude oil exports, create jobs, and boost our local, state and national economies.
According to reports issued by IHS Energy, lifting the export ban would increase U.S. oil production to 11.2 million barrels per day and add nearly $750 billion to the American economy. This would result in a per household income increase of $158 per year and would support an additional 124,000 American jobs on average through 2030, with a peak of 293,000 jobs by 2018. ICF International, meanwhile, projects ending the crude export ban could save American consumers up to $5.8 billion per year at the pump between 2015 and 2035, and would also reduce the national trade deficit.
Here in Louisiana, a major producer of domestic oil and home to hundreds of local companies and thousands of employees who go to work each day to fuel America, lifting the ban would create more jobs and increase revenue. Services at our deepwater facilities such as the Louisiana Offshore Oil Port (LOOP) would expand to support crude oil exports, and lifting the ban would allow local companies greater access to international markets. Clearly Louisiana has much to gain if and when the ban is lifted.
The economic benefits of crude oil exports have also gotten the attention of key congressional leaders who have made ending the ban a high priority. In July, the Senate Energy and Natural Resources Committee approved a bill that would lift the 40-year old ban on crude oil exports, and that same month a similar measure was heard in the House Subcommittee on Energy and Power. Floor votes could come this fall or early next year.
House Subcommittee Chairman Ed Whitfield summed up the issue best when he said, “Americans believe in free trade, and we as a nation have greatly benefit-ted from policies that allow us to export our products around the world. Everyone from farmers to automakers enjoys the advantages of a global customer base. Unfortunately, 1970s-era restrictions still prohibit most exports of American crude oil … Oil exports have the potential to be a jobs success story and a foreign policy success story too.”
LMOGA is following this issue closely and will continue to promote the safe exploration and production of American energy to fuel our state, our nation and the world.
For more information, visit www.lmoga.com or call (225) 387-3205.
