Who would’ve known negotiations with Tehran could have an immediate effect on workers in Thibodaux?
On July 20, the United Nations’ approval of the P5+1 nuclear agreement with the Islamic Republic of Iran signaled a willingness to lift global sanctions on Iran in the near future. Since the pact was formally presented to Congress, kicking off a 60-day review period before the body can take a vote on it, I have been carefully combing through the details of the agreement. It is highly complicated and carries implications that reach far beyond nuclear proliferation policy. One issue giving me significant concern is the effect on oil and gas jobs here in Louisiana.
Earlier this summer, the Louisiana Workforce Commission released a report on the health of the state’s workforce and overall economy. The forecast for the oil and gas industry, as many of us know firsthand, is not rosy. The mining and logging sector lost another 300 jobs in June, bringing the total jobs lost to 6,000 for the first half of 2015. Today, the number of jobs in this sector is nearly at a 10-year low. Almost all of us in Louisiana have family or friends that have been affected by the layoffs caused by the low price of oil.
One outdated and counterproductive law that holds back our energy sector from reaching its full potential is the current ban on crude oil exports. As Senate Energy Committee Chairwoman Lisa Murkowski rightly stated: “The outdated laws and regulations preventing the United States from exporting crude oil are grossly outdated — and, in the wake of the Iran deal, amount to sanctions against ourselves.”
Current sanctions against Iran prevent the nation from selling its petroleum to many nations around the globe. Even with those sanctions, Iran sells more than 1 million barrels a day of oil to other countries. By lifting these restrictions under the umbrella of this nuclear proliferation agreement, the Energy Information Administration estimates Iran will sell an additional 1 million barrels daily. Not to mention, it will gain access to an estimated $150 billion in oil sales proceeds to invest into energy infrastructure, among other things.
In Louisiana, we know that over the past year, the price of oil has dropped from above $100 per barrel to below $50. Removing sanctions will allow Iran to flood the global market, further depressing prices precisely when the market is at its weakest.
But while we prepare to allow Iran to sell its oil at the rate of millions of barrels per day all over the globe, our domestic producers are still hamstrung by a ban on crude oil exports. Today, while Iranian exporters sell in Asia and the Middle East, American producers’ only international market is Canada, an energy production powerhouse in its own right.
I struggle to understand how the United States can remain the only advanced country in the world limiting itself from selling oil on the global market. We are hurting our own strategic interests, allowing nations like Russia, Saudi Arabia, or Venezuela to gobble up a disproportionate amount of global market share without allowing ourselves the benefit of lower prices at the pump at home since these prices are set by the global market. If we lift sanctions on Iran while continuing to leave our crude export ban in place, it will amount to unilateral disarmament of our domestic energy production industry. This would be a colossal mistake.
While there are many reasons for skepticism when it comes to President Barack Obama’s deal with Iran, this is the most pressing and immediate for Louisiana. I am working with my colleagues in Congress to lift the crude oil export ban and allow our producers to compete on the world stage, but it seems unlikely that we can achieve a fix within the 60-day timeline before Congress must vote on this deal with Iran. While the president’s rush to cut a deal demonstrates his belief that this agreement will be an important part of his legacy, I’m more concerned with the negative effect this will have on Louisiana’s workers.
When workers in the oil and gas sector from Sulphur to Slidell realize this could mean sacrificing their jobs to Iran, I’m confident they’ll agree.
U.S. Rep. Charles Boustany, R-Lafayette, represents Louisiana’s 3rd District.