March 2015

Texas Lawmakers Discuss Jobs & Economic Impact of Federal Crude Export Ban

March 11, 2015


This week in Austin, hearings were held in both the Texas Senate and House of Representatives to consider a resolution calling on the U.S. Congress to lift the outdated, unnecessary federal ban on crude oil exports. The bipartisan House and Senate bills, respectively dubbed House Concurrent Resolution 57 (HCR 57) and Senate Concurrent Resolution 13 (SCR 13), received broad support from both sides of the aisle as lawmakers work to preserve Texas jobs and economic growth.

In his opening statement before the joint Energy Resources and International Trade & Intergovernmental Affairs Committees, Chairman Rafael Anchia (D- Dallas) characterized the 1970s-era ban as a relic that “prevents Texas from taking part in the global free market. American crude, because of its 40 year old policy, has become a stranded commodity,” he said. “In fact, the two other commodities that are unable to be exported on the world market are wild mustangs by boat and red cedar.”

Railroad Commissioner Christie Craddick, who testified in both hearings, called the United States “the only advanced nation in the world with a ban on crude oil exports,” before warning that “US stockpiles are building and capacity concerns growing” due to the archaic regulation. She continued by listing some of the anticipated benefits of lifting the ban, namely an $18 billion annual drop in consumer prices at the pump, $135 billion increase in GDP, and $1.3 trillion addition to US revenues between 2016 and 2030.

Speaking to the uphill battle faced by Texas producers, Railroad Commissioner Ryan Sitton testified in the House that crude oil production has increased 200% in the past five years while pipeline infrastructure has only grown by 40% – forcing producers in the Permian Basin to discount their crude even below the already discounted West Texas Intermediate (WTI) price. That disparity was underscored by James LeBas, former chief revenue estimator for the Texas Comptrollers Office. Mr LeBas testified that despite five years of explosive growth, Texas producers have been forced to discount their product an average of $10.06 per barrel – amounting to $1 Billion in lost revenue annually.

The chilling effect this unfair burden places on producers amidst lower prices for crude oil on the world market was described by former PBPA Chairman Steven Pruett of Elevation Resources. Mr Pruett’s firm has idled five of the six rigs they had operating just a few months ago. At a loss of 150 direct and indirect jobs per rig, the devastating effects of this ban on the Texas economy are obvious.

“The good news is this will correct in about a year and a half to two years,” Pruett testified yesterday. However, he said, “two years is a long time in the state’s budget, it’s a long time in employment, and in the meantime a whole lot of damage, some irreparable, will be done to our crude oil production infrastructure.”

Today’s Senate hearing concluded with a 9-1 vote approving the Senate version and sending it to the Senate floor for debate.


About the Permian Basin Petroleum Association

Founded in 1961, the Permian Basin Petroleum Association is the largest regional oil and natural gas association in the United States. The association includes approximately 1,000 member companies that produce oil and gas in the Permian Basin of west Texas and eastern New Mexico. The association’s mission is to provide safety education, legislative and regulatory involvement and support services for the petroleum industry to promote members’ effectiveness. More information is available at