Congress is to be commended for agreeing to end the outdated and destructive oil export ban. It was an expensive win, but it was a win nonetheless.
The ban is part of a budget package agreed to by House Speaker Paul Ryan and the White House on Tuesday.
"The package would fund the government through the 2016 budget year, raise domestic and defense spending, and increase the deficit by hundreds of billions of dollars by extending numerous popular tax credits without paying for them," the Associated Press reported. "It lifts the 40-year-old ban on exporting U.S. crude, a long-sought GOP goal, and delays two taxes meant to pay for President Barack Obama's health care law, one on high-value health plans and the other on medical devices."
Putting aside other aspects of the massive $1.1 trillion budget deal, lifting the oil export ban will act as a far more effective economic stimulus package than anything else Washington could do in the near term.
As Kathleen Hartnett White of the Texas Public Policy Foundation said: "Ending the outdated ban on exporting domestic crude oil would provide a substantial stimulus to our sluggish economy and could help stabilize the now shaky geopolitical order. In only the last few years, the shale revolution has made the United States the world's largest energy producer. Allowing our burgeoning supplies of crude oil and natural gas to enter the world markets would change the global energy landscape."
Ending the ban just makes sense. It was enacted in response to the Arab oil embargo of the 1970s, and with the intention of decreasing our dependence on foreign oil.
But the hydraulic fracturing (fracking) revolution came along and did much of that for us.
But we're left with a mismatch between what we can produce and what we can process in our current refineries. We tend to produce light, sweet crude. But our refineries are set up for the heavier crude the Saudis and others in the Middle East produce. Ending the ban will allow us to sell some of the light crude we can't process.
Ending the ban will lower the price of gasoline at the pump, studies show. Columbia University's recent study says the move could lower the cost of a gallon of gas by as much as 12 cents.
The benefits to Texas would be immense. That's the consensus of experts who spoke at the Tyler Area Energy Summit in March.
Dr. Tom Tunstall is research director at the Institute for Economic Development at the University of Texas at San Antonio, and he told attendees there's an abundance of crude oil that has been sent to refineries along the Gulf of Mexico - but they're operating at capacity.
"The shale revolution was completely unexpected," he said. "We expected to increase imports of oil. But because of shale, we're choking on crude oil at the Gulf."
Speaker Ryan was right to include ending the oil export ban in the budget deal. There's no guarantee President Obama will ultimately sign off on it, but this is a start.