Railroad Commission Chairman David Porter Testifies Before U.S. Agriculture Committee - Testimony focuses on benefits of lifting federal ban on oil exports
WASHINGTON, D.C. – Railroad Commission Chairman David Porter testified before the U.S. Agriculture Committee today on the importance and urgency of lifting the federal ban on crude oil exports. His testimony emphasized how lifting the ban on crude oil exports would spur new American energy production, foster economic growth and provide direct benefits to rural America and the nation as a whole.
The Chairman reported that the Texas Railroad Commission has recently seen a dramatic drop in the number of issued drilling permits – from 2,389 in May of 2014 to only 916 as of May this year – and that in addition to being outdated, the ban is actually harming the economies of Texas and our entire nation.
“In Texas, we understand and experience firsthand the link between U.S. oil and natural gas production and the strength of the economy,” Porter said. “The two are inextricably linked. When oil prices recently dropped, we felt the economic impacts at home. We saw thousands of hardworking men and women put out of work and rigs idled. We saw state revenues – used to support schools and infrastructure investments – decline.”
Porter also cited recent studies from the University of Houston and Rice University, which report that each drilling rig represents a total of 224 jobs, including those on the rig itself and those across the supply chain and in the broader economy.
“With the loss of 1,072 rigs through June, you can do the math to see just how devastating the recent downturn in development has been for oil and natural gas producing states,” Porter stated. “It comes to roughly 240,000 jobs. While repealing the ban will not bring back these jobs overnight, it will certainly get some of these men and women back to work in the near term.”
Porter also highlighted that the crude oil export ban is responsible for the disparity between West Texas Intermediate (WTI) - the U.S. pricing benchmark for crude – and the international benchmark, Brent.
“The majority of the new oil being produced from our shale formations is light sweet crude and the U.S. refining capacity is not designed to economically handle the increased volumes of this type of crude,” Porter explained. “As a result, our oil is essentially trapped in the U.S., creating a supply glut that is driving down the price of U.S. oil. This represents billions of dollars of lost revenue that could be pumped back into the U.S. economy.”
The Chairman hailed the efforts of Texas leaders who advocate lifting the ban, detailing how earlier this year, the Texas Legislature passed and Governor Abbott signed a resolution asking the U.S. Congress to lift the ban on crude exports. He emphasized the multiple benefits that would result for both Texas and the United States if that happens.
To review Chairman Porter’s full testimony, click here.
Texas Railroad Commission Chairman David Porter was elected statewide by the people of Texas to serve as a member of the Commission in November 2010. A Certified Public Accountant and successful small business owner, Chairman Porter has worked with oil and gas producers for nearly three decades providing strategic financial advice and tax counsel. He is the senior member of the Commission with a proven record of principle-driven, free market conservative leadership.