[Congressional Record (Bound Edition), Volume 161 (2015), Part 14]
[Senate]
[Pages 20249-20251]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          CRUDE OIL EXPORT BAN

  Mr. HOEVEN. Mr. President, I rise again to raise the case for lifting 
the 40-year-old ban on exporting crude oil. Lifting the ban will not 
only benefit my home State of North Dakota, but it will also benefit 
our Nation and our allies in a host of different ways, and that is why 
I worked hard to include legislation to repeal the ban in the year-end 
legislation that Congress now has under consideration.
  Importantly, this is must-pass legislation, meaning it will be very 
hard for the President to veto lifting the ban on exporting crude oil. 
When taken together, the reasons for lifting the oil export ban are 
very powerful. Doing so will encourage more domestic production, 
increase the global supply of crude oil, thereby reducing the cost at 
the pump for our consumers, particularly over the long term, and it 
will grow our economy and create good-paying jobs for our citizens.
  The last reason for lifting the ban is vitally important as well, 
particularly now as we work on making sure our Nation is secure. 
National security through energy security helps to keep our people 
safer. I will take a few minutes and go through those benefits one by 
one.
  Let's start with the American consumer. The price of oil is based on 
supply and demand. The more oil on the market, the lower the price. It 
is a matter of simple economics--supply and demand. The volatility and 
global price of crude oil is felt right down to the consumer level. 
More global supply means lower prices at the pump for gasoline, 
benefiting our consumers and small businesses across the country. That 
means more money in consumers' pockets. Those facts are backed up by 
studies at both the U.S. Energy Information Administration--the EIA--
which is part of the Department of Energy, as well as the nonpartisan 
Brookings Institute.
  This spring, EIA Administrator Adam Sieminski confirmed that finding 
in testimony before our Energy and Natural Resources Committee, of 
which I am a member. In September, the EIA released a new report that 
reaffirms the benefits to consumers and businesses that would result 
from lifting the decades-old crude oil export ban. It stands to reason 
if we just think about it for a minute. Oil is a global commodity, 
right? The global price is based on North Sea oil, or Brent crude, so 
that is the global price. Because we are not allowed to export oil, the 
domestic price is different. That is based on WTI--West Texas 
Intermediate--crude. So the West Texas Intermediate crude price 
typically simply runs somewhere between $5 and $8 a barrel lower than 
Brent crude, the international price. So here we are producing oil--my 
State of Texas and others--we produce some of the lightest, sweetest 
crude in the world. Yet when our producers sell that, they are getting 
$5 to $8 less per barrel than people who are producing internationally. 
So we are talking about OPEC, Russia, Venezuela, our competitors--they 
price off Brent. They are getting $5 to $8 more for every barrel they 
sell.
  Now, think about that. Let's say you are a store or a business of any 
kind. For selling the same product or selling a better product, you are 
going to get less money than your competitor. Which of you stays in 
business? Which of you grows and produces more of that product? Which 
of you goes out of business?
  So what is going on in the world right now? We have OPEC flooding the 
market. Why are they doing that? They are doing that to capture market 
share and to reassert their dominance. Once they put us out of 
business, then they are back in the driver's seat and prices will go 
right back up for the consumer. We don't want to let that happen. We 
want a robust oil and gas industry that will make sure that we have 
competition, that we have energy security, and that consumers have 
lower prices at the pump.
  Second, in addition to benefiting consumers, crude oil exports 
benefit our economy here at home. Crude oil exports will increase 
revenues and boost overall economic growth. It will help increase 
wages, create jobs, and improve our balance of trade. One area of our 
economy that currently enjoys a favorable balance of trade is 
agriculture. That is because our farmers and our ranchers successfully 
market their products around the globe. Our crude oil producers can do 
the same if they are given the opportunity. Local economies also 
benefit. Service industries, retail, and other businesses and 
communities centered on oil development will see more economic activity 
and growth if this antiquated ban is lifted. Also, crude oil exports 
will benefit our domestic industry, our energy industry, obviously.
  The EIA's latest study concluded that lifting the ban will reduce the 
discount for light sweet crude oil produced in States such as North 
Dakota, Texas, and others and encourage investment to expand domestic 
energy production.
  The drop in the price of oil this year has slowed domestic 
production. In our State of North Dakota, we continue to produce oil. 
In fact, our State increased production in October to almost 1.17 
million barrels a day. That is up a little bit from last month when we 
produced about 1.16, but we are already down from our peak earlier this 
year of 1.2 million barrels a day.
  This goes back to what I am saying. We are in a fight to determine 
who is going to produce oil and gas globally. Do we want that to be 
America or would we prefer that to be OPEC, Russia, Venezuela, and some 
of our other adversaries?
  Our producers are resilient, innovative, and highly competitive. They 
are developing new technologies and techniques to become more cost-
effective and more efficient all the time. Allowing them to compete in 
the global market will not only make us more inventive, more creative, 
and deploy better technologies but grow our economy and grow our 
domestic oil and gas industry.
  Of course, that means high-paying jobs for our people. According to a 
study by IHS, a global provider of industry data and analysis, lifting 
the ban will attract an estimated $750 billion in new investments and 
create nearly 400,000 additional jobs in the United States between 2016 
and 2030. I have seen studies that are actually higher. That is $750 
billion in private investment--not government spending, in private 
investment--to stimulate and grow our economy and 400,000 additional 
jobs. Again, those are jobs in the private sector--not more 
government--private sector jobs, economic growth, more revenue to help 
reduce the deficit and the debt without raising taxes. We know that 
from experience in North Dakota, where in recent years per capita 
personal income has been growing faster than any other State in the 
country, not solely but in large part because of oil and gas 
production.
  On a national level, crude oil exports will help to bring our energy 
policy into the 21st century. The crude oil export ban is an economic 
strategy that was implemented in the 1970s, and the world has changed 
dramatically since then. Back then, the conventional wisdom was that 
there was a finite

[[Page 20250]]

amount of oil in the world, and we pretty much knew where it was, and 
there were even alarms at that time that we were going to run out of 
oil. Barton Hinkle pointed out in Reason magazine that as recently as 
2005, the BBC asked: ``Is global oil production reaching a peak?''
  In 2008, the Houston Chronicle declared: ``We are approaching peak 
oil sooner than many people would have thought.''
  Two years later, the New York Times reported on a group of 
environmentalists who ``argue that oil supplies peaked as early as 2008 
and will decline rapidly, taking the economy with them.''
  Yet here we are. Nobody envisioned the kind of energy revolution we 
are seeing in the United States--in North Dakota, in Texas, and in 
other oil-and-gas-producing States--with new and creative technologies 
that produce more energy with better environmental stewardship.
  Back in 2011 I asked then-Interior Secretary Salazar to have the U.S. 
Geological Survey do a new study to update estimates of recoverable 
reserves in the Williston Basin. In April of 2013, the results came in 
and they were profound. The USGS found that there are approximately 7.4 
billion barrels of technically recoverable oil in the Williston Basin, 
which is more than twice the previous estimate. The upper end of that 
estimate is 11.4 billion barrels of recoverable oil. It is about twice 
the USGS estimate made in April of 2008, which projected about 3.65 
billion recoverable barrels in the Bakken formation.
  So my point is, in less than 5 years' time, with the new technology 
and development, we have more than doubled the amount of recovery oil 
just in the Williston Basin, in the North Dakota-Montana area, from 
3.65 billion barrels to 7.4 billion barrels, and we are just scratching 
the surface.
  The report also estimates there to be about 6.7 trillion cubic feet 
of undiscovered, technically recoverable natural gas, nearly three 
times the estimate 5 years earlier.
  So again my point: We don't even drill for natural gas. We are 
drilling for oil and we produce natural gas as a byproduct. And the 
amount available is going up dramatically. As I say, the most recent 
estimate for natural gas, 3.67 trillion cubic feet, is more than double 
the amount just 5 years earlier. That is what technology is doing with 
the resource. This is the opportunity we have.
  Recoverable oil projections to date may be as little as several 
percentages of what is actually in the ground. That is the kind of 
potential we have. That is the kind of potential we have to depend on 
ourselves for energy, not OPEC or anyone else.
  I recently asked the USGS Director, Suzette M. Kimball, to update the 
most recent assessments to provide more information on a new formation 
that we are producing in North Dakota--the Tyler. That is because 
industry advances in directional drilling and hydraulic fracturing have 
greatly expanded the ability to access formerly difficult areas. As I 
said, the industry is working on a new formation--the Tyler formation.
  I want to make one other point, too, and this goes to environmental 
stewardship. We are actually producing less greenhouse gas in the 
country today than we have in prior years. A big part of the reason is 
something called hydraulic fracturing because now, with hydraulic 
fracturing, we are producing so much more natural gas that we have low-
priced, abundant natural gas, and as we use more of it we are actually 
reducing carbon emissions in the United States. So isn't it ironic that 
as we develop and deploy the new technologies to produce oil and gas 
more efficiently, more economically, and more dependably, at the same 
time, through hydraulic fracturing and directional drilling, we are 
also doing so with better environmental stewardship.
  Isn't that what American innovation and ingenuity is all about? Isn't 
that the creativity that we unleash in the private sector, when we 
create a good business climate and we empower investment, rather than 
block it with regulation and taxation and roadblocks and redtape that 
doesn't make any sense? That is how we create that rising tide that 
lifts all boats. That is how we become the most powerful and dynamic 
economy in the history of the world. That is how we create more jobs 
and opportunity for our people.
  So now, just 10 years after some were lamenting the depletion of the 
world's oil reserves, the model has shifted from scarcity to abundance, 
and we will need additional investments in technology, transportation, 
and energy infrastructure, such as pipelines, rail, roads, and other 
industry needs to produce that energy. The good news is that the 
industry will build the infrastructure, create the jobs, and produce 
the energy we need if we just provide them with that good business 
climate and that opportunity to do it. As I said, as they deploy those 
advanced technologies, as they make that investment, they produce jobs, 
economic growth, more tax revenue, without raising taxes, to help with 
the debt and deficit, and they do so with better environmental 
stewardship. That is how we lead the world forward with better 
environmental stewardship, with American ingenuity, creativity, and 
innovation.
  Lifting the ban will create more domestic production and energy 
infrastructure, which holds two key benefits. First, more domestic 
production and infrastructure means that in a national emergency, 
Americans will not be dependent on the need for oil from elsewhere in 
the world--places like OPEC. Americans do not want to return to 
depending on OPEC for our energy.
  The second benefit is that U.S. crude oil will provide strategic 
geopolitical benefits for us and for our allies around the world. It 
will provide our friends with alternative sources of oil and reduce 
their reliance on Russia, Venezuela, Iran, and other unstable parts of 
the world for their vital energy needs.
  As a further security advantage, adding more domestic supply will 
provide a buffer against shortages going to volatile conflicts in the 
Middle East and elsewhere around the globe. We finally have an 
opportunity to curb the disproportionate influence OPEC has had on the 
world oil markets for almost half a century, and we need to capitalize 
on it.
  One final point on national security. We must recognize the 
implications of the President's deal with Iran, which lifts sanctions 
against Iranian oil. That agreement will put 1 million barrels a day of 
Iran's oil on the global market and billions of dollars in their 
Treasury. Does it make any sense at all to maintain a ban on U.S. oil 
exports while the President lifts a ban on Iranian oil exports? Of 
course not. Clearly, it does not. In fact, we should be maintaining the 
sanctions on Iran even as we lift the oil export ban on our producers.
  The consensus among lawmakers and experts in the field of energy and 
national security is evident: Lifting the ban on U.S. oil exports will 
create jobs, boost our economy, and bolster our national defense. It is 
supported by studies done by the U.S. Energy Information 
Administration, EIA--part of the Department of Energy--the nonpartisan 
Brookings Institute, and Harvard Business School.
  Last week we held an Energy and Natural Resources Committee meeting 
to examine the link between terrorism and the global oil and gas 
market. The results were telling. Expert witnesses from such highly 
regarded, nonpartisan think tanks as the Center for a New American 
Security and IHS, a global provider of data and analysis, affirmed that 
lifting the oil export ban will enhance national security. 
Representative of the general opinion in the hearing was testimony by 
Dr. Sara Vakhshouri, a nonresident senior fellow at the Atlantic 
Council, who said that with the Middle East in turmoil and confronting 
terrorist attacks and threats, it is important to have alternative 
resources and ``especially from the U.S.''
  Jamie Webster, senior director at IHS, capped the issue, saying: ``We 
have put out a couple of studies on the crude export issue and our 
finding is that this is a clear win for the U.S.

[[Page 20251]]

economy and also for energy security. It's difficult to find a case 
where this is not a positive.''
  The ban on crude oil exports is an anachronism, a solution to a 
problem that no longer exists owing to the innovation of the American 
energy industry. At this time in our history, all the circumstances 
argue for lifting the ban. Americans need jobs, the economy needs a 
free market boost, and the American people deserve the security of 
knowing that in an emergency, we have a reliable and abundant source of 
energy as well as the infrastructure to deliver it. Lifting the ban on 
crude exports is an idea whose time has come. Let's get it done.
  I am very pleased to see my esteemed colleague from the great State 
of Texas, the only State that produces more oil than my home State of 
North Dakota, but we are working hard, and you know when you are in 
second position, you always run a little harder, work a little harder. 
We are hot after them, but I must say they do an amazing job down 
there. His leadership on this issue has been tremendous because he 
understands it is not only important for the Lone Star State, but it is 
important for our country.
  With that, Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. CORNYN. Mr. President, while the Senator from North Dakota is 
still here, let me just say that he gave a speech that I wish I could 
have given. I couldn't say it any better than he did, but I will just 
make one point as he is preparing to leave the floor.
  Some people wonder why is it that the Texas economy is doing so well 
relative to the rest of the country. Last year, 2014, our economy grew 
at 5.2 percent. The U.S. economy grew at 2.2 percent. Now the fact that 
we are producing energy using the techniques the Senator from North 
Dakota talked about--fracking and horizontal drilling--fracking, by the 
way, has been around for 70 years or more--that has helped contribute 
to job creation and our economic growth. This is something we would 
like to see expand across the country.
  We have been blessed, as has the Senator from North Dakota, with 
abundant natural resources. What we are asking to be able to do is to 
sell those to willing buyers overseas. Many of them are some of our 
closest allies, who are being terrorized by thugs such as Vladimir 
Putin, who uses energy as a weapon. Think about how powerful this would 
be in our national security toolbox to be able to sell natural gas and 
crude oil to some of our closest allies so they don't have to rely on 
people like Mr. Putin.
  I congratulate the Senator from North Dakota, Mr. Hoeven, for his 
leadership on this issue. We have all worked together on it, and it has 
been a team effort, and we are close to getting it done.
  The final point I want to make is that this is not just about energy-
producing States, this is a net positive for the United States and for 
our allies abroad.
  Mr. HOEVEN. Will the Senator from Texas yield for just a minute?
  Mr. CORNYN. I will be happy to.
  Mr. HOEVEN. I want to pick up on that last point. It is particularly 
important when you consider this legislation that this bill just 
doesn't benefit the oil-and-gas-producing States, it really benefits 
everybody when you think about all of the infrastructure and the 
materials, the equipment that goes into producing that energy. When you 
talk about drilling down 10,000 feet, 2 miles underground, and drilling 
out 3 miles in multiple directions; when you talk about the equipment 
that is needed to do that, the tanks, the transportation; when you talk 
about all the things--the research, development, engineering--that go 
into it, I doubt there is a State in the Union that isn't touched by 
this energy industry. That is something I think all of our Members have 
to keep in mind when we look at this legislation. It is not just about 
energy-producing States, it is about all of us in terms of the economy, 
and it is about all of us in terms of national security. We are the 
ones leading forward with the newest technology that will leave the 
environment with better stewardship.
  I am glad the Senator actually brought up that point, and I hope our 
colleagues will keep that in mind as we bring forward this legislation.
  Mr. CORNYN. Mr. President, there is another benefit that spreads 
evenly among Americans, and that is low gasoline prices. The single 
driver for low gasoline prices is the supply of oil. Because of the 
abundant supply of oil due to innovation and these techniques the 
Senator from North Dakota talked about, oil prices are lower than they 
have been in a long time.
  You can buy a gallon of gasoline in Texas for well under $2. I think 
I saw it as cheap as $1.80 or maybe lower than that in some places. 
That has a direct impact on the pocketbook of working families. That is 
another reason why this legislation needs to be passed on Friday of 
this week in the House and in the Senate. I thank the Senator from 
North Dakota for this brief discussion.

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