LSU study claims lifting export crude ban would have little economic impact on Louisiana

Lifting the crude export ban that has been in place since 1975 would not lead to increases in gas prices nor would it create a large economic boom for Louisiana, according to a new LSU study.

The study conducted by Gregory Upton, assistant professor in the LSU Center for Energy Studies, and titled “Crude Oil Exports and the Louisiana Economy: A discussion of U.S. policy of restricting crude oil exports and its implications for Louisiana,” does not make a recommendation on if the ban should be lifted, but instead identifies tradeoffs lawmakers need to consider.

The crude oil export ban has been in place since the adoption of the 1975 Energy Policy and Conservation Act. Upton argues that removing the ban will “remove a long run federal protectionist policy on an industry that has served as an important component of our economy, but in return will have the opportunity for the state to be at the center of an emerging global trading hub.”

Congress has taken up the issue of whether the ban should be lifted in light of the massive drop in the price of oil and gas.

Prior studies have claimed that lifting the ban would bring about significant economic benefits for the United States due to increased domestic oil production. Upton says domestic refineries would be short-term winners because they would be able to buy oil from drillers at domestic prices, then sell it across the oceans for world oil prices.

“Most of the price differential between domestic and foreign crude prices is likely associated with shipping costs and constraints within the U.S., not the export ban,” Upton says. “And while refineries in general benefit from the export ban at the expense of producers, these transfers are transitory and are likely not large in magnitude.”

Read the full 55-page study.

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