How rare is it for common sense to come out of Washington? Because this makes perfect sense:
“Falling oil prices have some Texas lawmakers looking to reshape U.S. policy on crude oil in the mold of another iconic Texas product: Blue Bell Ice Cream,” the Dallas Morning News reports. “Blue Bell’s motto is ‘We eat all we can, and we sell the rest.’ Texas legislators think that should also apply to oil by lifting the ban on crude oil exports — a policy that’s been in place since the oil crisis of the 1970s.”
Oil exports make perfect sense. So do exports of natural gas.
“A drop in the price of crude, from about $100 in mid-2014 to around $50 now, has threatened to halt the recent boom in U.S. oil production,” the News explained. “The oil industry is slashing thousands of jobs and looking at selling off assets in response. The price drop has heated up discussions in Washington of lifting the export ban on crude oil — and Texans are leading the charge. On Tuesday, Rep. Joe Barton, R-Arlington, filed a bill to ‘remove all restrictions on the export of crude oil, which will provide domestic economic benefits, enhanced energy security, and flexibility in foreign diplomacy.’”
Alex Mills of the Texas Alliance of Energy Producers explained recently why this makes sense.
“Oil production has grown more in the United States over the past five years than anywhere else in the world,” he wrote. “With these changes has come a widening gap among the types of oil that U.S. fields produce, the types that U.S. refiners need, the products that U.S. consumers want, and the infrastructure in place to transport the oil. Allowing companies to export U.S. crude oil as the market dictates would help solve this mismatch. Removing all proscriptions on crude oil exports will strengthen the U.S. economy and promote the efficient development of the country’s energy sector. Crude oil exports could generate upward of $15 billion a year in revenue by 2017 at today’s prices, according to industry estimates.”
Some worry that exporting oil could drive up gasoline prices, which are already starting to increase.
“But research by Michael Plante, a senior research economist at the Federal Reserve Bank of Dallas, shows that lifting the export ban might lower prices at the pump,” the News countered. “That’s also supported by a Congressional Budget Office report from December 2014, and a slew of other independent analyses.”
How? By stabilizing the market and encouraging expanded exploration and extraction.
And then there’s the issue of jobs. With the restrictions in place, oil companies are pressured by simple economics to fund exploration and development in other countries. With the export ban lifted, those companies would inevitably do more in the U.S.
There’s even an environmental benefit. Crude oil produced here and sold on the world market is likely produced more cleanly than, say, crude from Russia.
So it’s nice to see common sense in Washington — even if it was brought there by Texans.