In recent weeks and even days, there’s been a strong renewed call from Congress and points around the West to lift the crude oil export ban—a ban put in place back in the 1970s as a way to keep gas prices low for American consumers. Proponents of lifting the ban claim that it’s outdated, and needlessly hampers American growth and development; those opposed say it’ll raise gas prices, hurt refiners and even spur faster environmental impacts from increased development. But what does it mean for taxpayers?
The Center for Western Priorities today released a new report to answer just that question, and it’s maybe an answer you don’t want to hear:
“Using data from the Energy Information Administration and a report commissioned by the American Petroleum Institute, we estimate that American taxpayers could lose more than $500 million over the next decade if Congress lifts the crude oil export ban and ignores outdated royalty rates.”
Why’s that? It’s because royalty rates for oil and gas production on our public lands are super outdated and precipitously low—only 12.5% on federal lands, compared to anywhere from 16-18% on state lands in places like Texas and Wyoming.
So if the export ban were to be lifted today, domestic oil producers would win big—they’d have a new market in which to sell a product that’s recently been suffering from high supply and low demand. But not so much for American consumers, who wouldn’t see any of that increase in profits at all.
If Congress is moving towards lifting the crude oil export ban, it’s imperative that we first reform royalties for our public lands. Otherwise American consumers will lose, and lose big. You can read more about it, and what needs to happen in order for royalty reform to occur, at the Center for Western Priorities website.