Energy and the Rural Economy: The Economic Impact of Exporting Crude Oil
July 8, 2015
The Honorable David J. Porter (Texas Railroad Commission, Chairman)
Mr. Harold Hamm (Continental Energy, Founder/Chairman/Chief Executive Officer)
Mr. Terrance A. Duffy (CME Group, Executive Chairman/President)
Ms. Kari Bjerke Cutting (North Dakota Petroleum Council, Vice President)
Mr. Jamie Webster (IHS, Senior Director)
Mr. Frank Rusco (U.S. Government Accountability Office, Natural Resources and Environment, Director)
On July 8, 2015, the full House Committee on Agriculture convened to discuss the economic impact of exporting crude oil from the U.S. During the hearing, committee members and witnesses expressed strong support for lifting the crude oil export ban, describing several economic and geopolitical benefits of their policy recommendation.
In their opening remarks, Chairman Conaway (R-TX) and Mr. Duffy stated that while the ban was conceived to protect the U.S. economy and consumers, it has instead disrupted the market. Ranking Member Peterson (D-MN) and Mr. Porter concurred, describing restrictions on crude oil exports as outdated.
Representatives Peterson and Plaskett (D-Virgin Islands) explained that the U.S. cannot refine all of its crude oil domestically, as EPA regulations overburden the economic viability of U.S. refineries.
If the ban is lifted, committee members and witnesses contended that gas prices for American consumers will likely drop. This will particularly benefit rural Americans, as they tend to spend a higher percentage of income on energy consumption.
Additionally, Mr. Hamm asserted that lifting the ban is projected to add approximately 1% growth to U.S. GDP. Mr. Webster also argued it will facilitate massive creation of middle-class jobs.
Mr. Porter described geopolitical and national security advantages of lifting the ban. South Korea, for example, will be able to buy crude oil from the U.S., rather than from Russia or Iran.
Furthermore, Mr. Rusco explained that lifting the export ban will not only benefit the oil and gas industry, but also the transportation, agriculture, and housing industries. Ms. Cutting added that in her state of North Dakota, millions of oil and gas industry tax dollars are allocated towards building infrastructure and schools on a daily basis.
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