The end to the U.S. ban on crude oil exports will lower petroleum imports, create a million jobs, boost household income and gross domestic product. Or not.
As Gannett Louisiana reports, it depends on who you ask.
But the ban’s end may give Louisiana a new opportunity to capitalize boldly on the energy industry, this time as a trade center, an LSU research report suggests.
The U.S. House of Representatives and Senate passed the legislation Friday to end a ban on crude oil exports that began with the Energy Policy and Conservation Act signed by President Gerald Ford in 1975.
Proponents of ending the ban suggested last week that such action would spark some $746 billion in new investment by the end 2030. By the same year, proponents said, some 964,000 new jobs would be created in response to this unleashing of the U.S. energy markets.
But that data, initially revealed in a 2014 IHS study, overstates the benefits of ending the ban, according to a study published in November by the LSU Center for Energy Studies. Gregory Upton Jr., assistant professor, suggests in his study that the “large economic benefits” that have been linked to the end of the ban are “implausible.” Ending the ban would have little effect on gasoline prices for businesses and consumers, the study also suggests.
In short, Upton contends that ending the ban might create what he called “short-term frictions” for crude prices, but those, he said, would be short-lived as the global market adjusts. He also notes in his paper that the export ban has acted as a protectionist policy that benefits domestic oil refiners, who have been buying from U.S. producers at lower costs, over the oil producers, who have largely been limited to selling their crude products domestically.
Any debate over sustaining or ending the ban, Upton contends, should have focused elsewhere than on the benefits he says are overblown, the price of gasoline or a suggested increase in carbon dioxide emissions, which worried some ban proponents. Rather, he says, Louisiana should focus on shifting the discussion of a post-ban America to creating conditions for making Louisiana a center of energy commerce. The national debate is over, but Louisiana’s possibilities are new.
