Story by The Dallas Morning News
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.
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.
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 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.”
Barton’s bill includes four Republican co-sponsors from Texas: Mike Conaway of Midland, Randy Neugebauer of Lubbock, John Carter of Round Rock and Bill Flores of Bryan.
Many Texas congressmen argue that the policy is outdated.
“We export cars, we export everything. But we don’t export energy. Why? Because the law prohibits it. So the law needs to be changed,” said Rep. Ted Poe, R-Humble.
The “economic situation has created momentum” for repealing the export ban, Barton said. Doing so, he said, would buoy oil producers who are struggling with low prices.
“It’ll keep that marginal well in production, and it will allow some wells to be drilled that otherwise won’t be drilled,” Barton said. “It’s at least a jobs protector.”
The oil and gas industry added over 200, 000 jobs between June 2009 and June 2014, over half of them in Texas, according to the Bureau of Labor Statistics.
Local leaders of oil-rich communities have shown support for lifting the ban.
“If they let go of two rigs, then you’ve got not only the rig hands and the employees on those particular jobs, you’ve got the service companies that tend to the supplies that they need and so forth. So it does extend out,” said DeWitt County Judge Daryl Fowler.
Supporters of the ban, including environmentalists and refiners, say that lifting it could raise the price of gasoline.
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. That’s also supported by a Congressional Budget Office report from December 2014, and a slew of other independent analyses.
Still, Barton’s bill will probably face a slow, uphill battle.
During debate over the Keystone XL pipeline in January, Sen. Ted Cruz, R-Texas, offered an amendment almost identical to Barton’s bill. Cruz dropped it after colleagues and lobbyists said they didn’t have enough time to consider the issue.
Sen. Lisa Murkowski, R-Alaska, who chairs the Energy and Natural Resources Committee, is also a staunch supporter of lifting the ban. But she acknowledged the difficulties in repealing the long-standing policy during a recent briefing.
“So much of advancing legislation successfully is timing, And particularly when you’re attempting to change a policy that has been in play for decades,” Murkowski said.
But for Rep. Pete Olson, R-Sugar Land, that’s exactly why lawmakers should carefully consider the subject.
“People have made decisions on this policy for 40 years,” Olson said. “Take some time, be deliberate, make sure we don’t hurt people. Make sure we don’t make gas prices spike.”