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Kevin C.
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  • Lifting the Crude Oil Export Ban

    by Representative Kevin Cramer

    Posted on 2015-12-16

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    CRAMER. Mr. Speaker, I rise today to talk a little bit about one component of the omnibus tax extender package that is dominating the legislative agenda as we wrap up this year.

    The one piece of the package that I want to talk about is the lifting of the crude oil export ban, which is an issue that has passed twice now in the House of Representatives--in fact, as a stand-alone bill. H.R. 702, the lifting of the crude oil export ban, passed with 62 percent of the vote.

    As is often the case, good bills that are passed by the House often languish in the Senate for a number of reasons. Perhaps one of the main reasons bills languish in the Senate is that their rules are as antiquated as is this export ban on crude oil.

    Mr. Speaker, I want to take some time to talk about this provision and why it is important that we lift the crude oil export ban. I want to talk a little bit about the history that led to the export ban in the first place, and I want to talk about a more optimistic future as we look at the oil renaissance--what it has created and what it can create.

    As I said, the export ban really is an antiquated law. It was put in place 42 years ago, which was a very different time in our country. It was different for a number of reasons, not the least of which being that the ban on exporting crude oil came at a time when our country did not enjoy energy abundance as we do today. It, rather, suffered from a scarcity of energy resources--a scarcity of oil, a scarcity of all kinds of energy--and, certainly, from a scarcity of the products that are created by oil. It suffered even from a scarcity, frankly, of some of the technologies that make the development of fossil fuels and, yes, of new, cleaner--greener, if you will--energy sources.

    We are nothing in this country but for our innovation. I think innovation is the key to much of our success. It is not that the United States really had a scarcity of resources, but that, rather, we had a scarcity of technology to develop those resources. As the technology developed to get more and more of our energy resources and to develop them, it also progressed to make it more and more efficient to develop them and to make it cleaner to develop them. I am happy to elaborate.

    I represent the great State of North Dakota. I am the only Member of the people's House from the State of North Dakota. We have just over 700,000 people in my State. So, like my 434 colleagues, I represent, roughly, 700,000 citizens. It just so happens that they make up a State.

    In just the past few years alone, we have lost 80,000 U.S. jobs, just in the last year, 80,000 U.S. jobs, because our oil producers have been forced to scale back their rigs by nearly 60 percent. That is the result of a collapse in price.

    Why is there a collapse in price? There is a collapse in price largely because we are producing a lot more, and, of course, we cannot sell the product outside of the United States. Obviously, you can't produce more than your consumers can take in.

    In North Dakota, we grow a lot of crops. We grow a lot of food to feed a hungry world. In fact, we are the number one producer of anywhere from 12 to 16 or 18 crops depending on the year. We produce a lot of wheat, but we can't begin to eat it all. We produce a lot of [[Page H9370]] cattle. We produce a lot of honey. We produce a lot of sunflowers. We produce a lot of beans. We produce a lot of products that we couldn't begin to consume in this country, but there are hungry people all over the world who would love to consume it.

    So we are always innovating, creating new breeds and technologies and farming practices and chemicals and, yes, modifying the product. Why? It is because there is not more land on which to grow more food, but there are many more people who need to eat it throughout the world.

    The same is true, in many respects, of energy. Yet now, as we have come upon this time with this renaissance that was created--again, not because God suddenly put more oil under the ground, but because of technology--the advancement of horizontal drilling and hydraulic fracturing has unlocked billions of barrels of oil that were always there or were at least there for several years--decades, centuries, millennia. It has unlocked it because of technology.

    We talk a lot about energy independence and about the goal to get there. Yes, that is a noble goal. I would submit, though, that more important than that is energy security. And I have heard the Chair, Mr. Speaker, talk about the topic of energy security with great eloquence. Energy security is like food security. It is the ability to develop and to produce what you need as well as to produce for the global marketplace, increasing our influence in the world. I am going to get into that in a little bit.

    Let's not forget about the jobs. Let me talk for a minute about the jobs in my home State of North Dakota, which is now the second leading producing State of oil, second only to Texas.

    I was an economic development director for our State at a time when we were beginning to diversify our economy, at a time when out- migration was just starting to plateau. Since that time, we have become the fastest growing economy in the country and have the fastest growing population in the country. We now have the second highest per capita personal income in the country and the lowest unemployment rate in the country. In fact, we still, even with this downturn, have more jobs than we have people looking for work in North Dakota.

    I have seen people go from poverty to prosperity. There is nothing wrong with that. I have seen truck drivers become fleet owners. I have seen short order cooks become restauranteurs. I have seen carpenters become developers.

    {time} 1645 I have seen people who have a water well become entrepreneurs selling water for hydraulic fracturing.

    I have seen the renaissance lift people up. While a rising tide lifts all boats, they don't necessarily all get lifted at the exact same time. So there is a little bit of massaging and intervention that goes on to help people even during the boom, if you will, to keep up.

    According to an IHS Energy study, for every one job created in the oil and gas sector, there are six jobs created in the broader economy. I can tell you, Mr. Speaker, from my experience in North Dakota, that is definitely true. It is not just the oil rig worker. It is not just the truck driver. It is not just the pipeline worker.

    All of them, as important as they are and as good of jobs as they are, it is that restaurant owner. It is the hair dresser. It is the Main Street retailer, the person selling groceries. It is the entrepreneur who comes up with an idea no one else had thought of before. It is the entrepreneur that sees the problem that needs a fix, finds the fix, sells it and markets it and becomes an employer as well, rather than just an employee.

    By the way, the American jobs created by the oil renaissance of recent years exists in all 50 States.

    Speaker Ryan put out this chart today, this little graphic piece, identifying the opportunities that lifting the crude oil export ban would have that go beyond the renaissance that we have experienced in recent years. Lifting the oil export ban would create an estimated 1 million American jobs in nearly all 50 States. That is because the supply chain that it takes to produce the oil, to discover the oil, to move the oil, to refine the oil, to finance, to do the accounting, it is in every State.

    In fact, the President's home State of Illinois is one of the greatest beneficiaries of the oil renaissance. Many of these 1 million jobs would be created right there within a matter of years. It would add, imagine now, $170 billion--with a B--to our gross domestic product every year.

    At a time when we are looking for revenue to meet the priorities of our Nation, at a time while unemployment has come down, we still have a very, very low workforce participation rate, at a time when our education system doesn't always match the opportunities, we have the opportunity with these additional dollars and the additional job opportunities to meet the demands of a growing economy. All the while, we could, with lifting the crude oil export ban, meet the market demands around the world.

    Mr. Speaker, I happen to think that history can be a great teacher. I said earlier that I want to address the history or the context of this export ban. How did this come to be? You know, as I said, much has been written and said by me and my colleagues and others in the industry how lifting the export ban would be good for our economy, how it would be good for job creation, and how it would be good for the United States of America. The history of how it came to be, I think, is useful.

    It was the Yom Kippur war in 1972 led by Syria--an attack by Syria backed up by, Mr. Speaker, none other than the Soviet Union--against our friends, Israel. It was the United States, as has been the rich tradition of our country, who came to the defense of our best friend and ally in democracy who shares our values in the Middle East, Israel. Syria and the Soviet Union pitted against Israel, backed by the United States.

    The Yom Kippur war led to the oil embargoes of 1973, which caused a reaction, leading eventually to this crude oil export ban. You might recall in the seventies, Mr. Speaker--I do, barely, but I do--the gas shortages, the rationing of gas, sales limited to 10 gallons of gas per customer, as is illustrated in this poster, this real picture of the 1970s.

    Now, while it might have been a well-meaning policy to put a ban on exporting crude oil with the idea that somehow we could produce enough oil in the United States or, at least, we ought to hoard what we have, it is not like the United States was a leading producer of oil. We weren't what we are today.

    Today, we are the number one producer of oil and gas. Gas, as you know, can be exported. By the way, refined petroleum products can also be exported.

    So that is what led to the ban. The problem is, as I said earlier, this isn't 1973 anymore. This is not 1979. This is not 1989. This is a time when we have energy abundance. We have oil abundance to the point where we have every storage facility, including pipelines, ships, and tanks, full of oil. We are still producing light, sweet crude, I might add. In a little bit, I will get to the difference between that and this heavy sour crude and the various market mixes that demand that.

    Mr. Speaker, as I started out reminding the Chamber, we passed H.R. 702 with 62 percent of the vote, a large bipartisan vote. That was a bill introduced by my friend, Representative Joe Barton of Texas. He is in the Chamber with us, and I would like to yield such time as he would like to explain why this is such an important piece of this week's omnibus and tax package.

    Mr. Speaker, I yield to the gentleman from Texas (Mr. Barton).

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