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12 10, 2014 by The Times-Picayune
The American oil and natural gas industry depends on Louisiana. It depends on our friends, families and neighbors who work on the rigs and at the ports to provide fuels that Louisiana and the rest of country needs in constant supply. Thanks to recent developments in American innovation we are doing that work even better and at a bigger scale today than ever before.
The shale development boom across the United States is changing our country's energy landscape as U.S. crude oil output soars to a 31-year high and oil imports continue to steadily decline. Lifting the 1970s era crude oil export ban would allow this boom to continue while lowering energy costs for consumers and increasing tax revenues for local governments. In Louisiana, lifting the ban would grow the industry that so many of us care deeply about as our state looks to the future.
Congress passed the crude oil export ban in 1975 to protect America from the energy supply and price shocks that resulted from the OPEC oil embargo. Times, however, are changing. In 2014 the United States surpassed both Russia and Saudi Arabia as the largest global producer of crude oil and natural gas liquids by volume. The quantity of crude oil currently being produced in this country is now such that exporting crude oil would not jeopardize America's energy security, it would improve it.
Indeed, according to IHS Energy, lifting the export ban would increase U.S. production from 8.2 million barrels per day currently to 11.2 million barrels per day and add investment of nearly $750 billion to the American economy. A high crude export scenario would lead to 63,000 jobs added at peak in 2019, according to an Aspen Institute report, and lifting the ban would put downward pressure on domestic gasoline prices. In fact, lifting the crude export ban could save American consumers up to $5.8 billion per year at the pump on average between 2015 and 2035, according to ICF International. Lifting the crude export ban also would narrow the national trade deficit.
Lifting the crude oil export ban also would ensure that all inputs and products across the energy industry can move freely through markets. The industry cannot support a free market for products like gasoline and natural gas condensates when crude oil, which is being rapidly produced in large quantities, is restricted. It is a hypocritical position.
For Louisiana, lifting the ban and removing export restrictions would create jobs and increase revenue here at home. First, our deepwater port facilities would see more activity as exports ramp up. This requires investments in infrastructure, but Louisiana companies are already thinking ahead. Indeed, the abundance of American oil is forcing the Louisiana Offshore Oil Port LLC, the country's biggest oil port, to transform itself into an outbound hub as it reaches maximum capacity of oil storage. This means more jobs and a more vibrant Louisiana economy.
Louisiana is a major producer of oil, so lifting the crude export ban also would allow local companies to access international markets. This would boost the state's economy tremendously. Increased revenue from profits and taxes would help fund important state and local programs. Finally, lifting the crude ban would create jobs across Louisiana, where the unemployment rate was 6.2 percent in October.
Removing crude oil export restrictions will grow the U.S. economy with positive implications for employment, investment, public revenue and trade. Louisiana is no exception, and in fact stands to gain more than most states from lifting the ban on exports.
The House Subcommittee on Energy and Power will hold a hearing Thursday (Dec. 11) in Washington to examine the impact of the 1975 law banning oil exports. When the new Congress is seated in January, members should quickly turn their attention to lifting the ban so Louisiana, and the nation, can embrace its role as a global energy supplier.
Chris John is president of the Louisiana Mid-Continent Oil and Gas Association.
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