Though a small part of a big overall bill on the federal budget, one element is of more than passing interest in Louisiana.
Forty years ago, with memories of long lines at the gas pump and soaring prices, Congress passed a ban on exporting American crude. That 1975 law is to be repealed as part of the “omnibus” federal budget legislation, awaiting final votes after a lot of dealmaking by the leadership, particularly new House Speaker Paul Ryan of Wisconsin.
Overall, the omnibus needs to pass. It would pay for government operations through 2016, avoiding the party fights that threaten a partial government shutdown during the holidays. Ryan’s Republicans ought to worry about the political implications of forcing such a fight, because the last one did not do the party much good in the public eye.
But tucked among many other provisions of the $1.1 trillion omnibus bill are items that deal with policy instead of the budget, and one of them is the repeal of the ban on oil exports.
With the low price of oil, there may be hopes that oil exports would provide a boost by opening some new markets for Louisiana and U.S. crude. We hope so, although an LSU analysis recently suggested that whatever price impact, the largest consequence is likely to be simply a expanded market for crude along the Gulf Coast.
The market should make such decisions, we think, so ideologically we back the Republican leadership in supporting the end of the export ban. Yet we don’t think that the immediate effects will be great on prices, unfortunately for Louisiana’s oil patch.
In a global marketplace, America can benefit greatly one day from exporting the vast new energy reserves unlocked by “fracking” and subsequently boosting oil production. That day ought to come, but today’s markets don’t seem to be moving much in terms of price for producers.
Ironically, Louisiana is seeing a boom in the southwestern parishes because of the construction of natural gas export facilities. Natural gas was not covered in the 1975 oil export ban.
In today’s bill before Congress, Democrats pushed for a five-year extension of renewable energy credits for businesses. That is part of an “all of the above” energy policy, so we hope that oil patch senators and congressmen will also see those as positive elements in the big omnibus bill.
There’s a lot in the omnibus legislation and members might have strong views for or against particular provisions. Overall, though, we commend the leadership of both parties for seeking a resolution of the budget problems.