In what has become dark days for the U.S. oil industry and the thousands of workers it supports, Congress provided some light this week by agreeing to repeal the American crude oil export ban as part of the 2016 spending bill. President Barack Obama signed the bill late Friday.
It’s a huge and historic moment for the sagging oil industry, which has seen prices bottom out to seven-year lows and drilling rigs stacked across the U.S. — in North Dakota and Texas, in particular — while thousands of oil workers lost jobs in the process.
North Dakota Democratic Sen. Heidi Heitkamp played a key role in making sure this happened, working the folks on her side of the aisle alongside Alaska Republican Sen. Lisa Murkowski to assure bipartisan support. North Dakota Republicans Sen. John Hoeven and Rep. Kevin Cramer also kept pushing their bipartisan colleagues. Hoeven called it a “win across the board.”
While the bill is not without some major flaws — which we won’t go into here — the Republicans are happy because the oil export ban has been lifted and the Democrats are pleased because the bill included big tax breaks for wind and solar energy.
Many energy analysts have theorized that lifting the oil export ban will serve to help prop up oil prices just enough to make drilling in North Dakota more profitable, thereby creating jobs and keeping our energy industry humming while ensuring gasoline prices stay manageable for the everyday American.
But, as The New York Times noted earlier this week, the impact of lifting the ban is “extremely complicated.” The main point is that repealing the ban allows oil companies to dictate who gets to buy their crude, whether it’s a refinery in the U.S., China or elsewhere.
Earlier this fall, MBI Energy Services CEO Jim Arthaud told The Press he often analogizes the oil export ban into farming terms. He said, in the simplest of terms, telling the U.S. it can’t export oil but we can export gasoline and other refined fuels is like telling farmers they can’t sell their wheat for export, but they can export bread.
The senator is right when she says this is all part of a long game. We shouldn’t expect the ban’s repeal to be some sort of magic switch that cranks things in the Bakken back up to summer 2014 levels immediately. It’s going to help, even if it takes a while.
Will it bring the energy success story back to western North Dakota? Only time will tell.