Momentum has been building over the last month in Congress to overturn the outdated crude oil export ban. The house is now poised to vote on overturning the ban soon – as early as next week – and a new government report released this week confirms that doing so would not just be a boon for the U.S. economy but would reduce the national deficit by over a billion.
The crude oil ban is a measure from the 1970s that was originally intended to protect U.S. oil supplies during a time of scarcity after the 1973 OPEC oil embargo. However, the U.S. is no longer a nation of energy scarcity; rather, the U.S. is now enjoying an energy renaissance. It is increasingly evident the ban is no longer justified and is a burden to the nation’s economic prosperity.
According to a cost estimate released this week from the Congressional Budget Office (CBO), overturning the ban would reduce the deficit by more than $1.4 billion over 10 years. The CBO projects that lifting the ban would in turn increase production under federal leases.
These funds would come from expanded royalties derived from leases granted to companies to explore for oil on federal land. This figure only accounts for federal revenues; the federal government only receives half of the receipts from these royalties. The other half of the royalties go to state governments, accounting for another 1.4 billion in revenue for states, like Texas, North Dakota, and Oklahoma.
In addition to the CBO report, on September 25th Congressman Fred Upton, chairman of the House Energy and Commerce Committee, submitted a report on H.R. 702 to the House floor. This report highlighted some of the benefits that overturning the ban would have on the deficit and national economy.
According to the report, overturning the ban would spur economic investment and increase GDP by billions of dollars. In addition, it would create thousands of new jobs, galvanizing hundreds of communities across the country. It would also lower gasoline prices for the American consumer. Lowered fuel prices will save families thousands of dollars per year, effectively raising household incomes.
Overturning the ban would also strengthen national security. Exporting crude oil will move the U.S. closer towards energy independence. The U.S. will become less reliant on oil from foreign sources, and exports would also allow U.S. allies in Europe and Asia to diversify their crude oil supply. Allowing U.S. oil exports also would strengthen America’s economic power, furthering our role as an energy power house.
Lifting the crude oil export ban is a much-needed measure to modernize the nation’s outdated, draconian energy policies and institute policy that reflects the nation’s economic realities. It is imperative that Congress moves further towards taking action. Overturning the crude oil export ban will usher the U.S. into further economic prosperity and energy security.
Photo credit: Ken Hodge