Facing low prices and a supply glut, oil industry executives called for an end to a 40-year-old federal ban on crude oil exports during a Billings forum Thursday.
Lifting the ban would open new markets for producers and boost the economy in Eastern Montana, panel members told a luncheon group of about 40 at the Crowne Plaza hotel.
“The bottom line is that we have a glut of crude in this country, and we need to export. We have too much,” said James McCord of Bay Limited, which manufactures oil field equipment in Billings.
The forum was sponsored by the Billings Chamber of Commerce and the Montana Chamber of Commerce.
The oil-export ban dates back to 1975, when the United States was far behind Middle Eastern nations in oil production and facing domestic shortages.
Industry advocates argue that the boom over the last seven years in hydraulic fracturing, or fracking, has increased supply and made the ban obsolete.
“It gives the U.S. an opportunity to be an international leader in energy policy,” said Dave Galt of the Montana Petroleum Association, which represents upstream and downstream oil companies.
Oil companies are also feeling pinched by low prices. Sweet crude is trading around $40 per barrel now and has been stagnant for months.
A bill to lift the ban has passed the U.S. House, and a similar bill cleared the U.S. Senate Energy Committee in July. Last week, the Obama administration gave approval for limited exports of U.S. oil to Mexico, permitted on a case-by-case basis under existing law, according to the Houston Chronicle.
However, experts say the bill faces an uphill climb to passage through the full Republican-controlled Senate and get signed into law by President Barack Obama. Opponents of lifting the ban fear it could lead to higher retail gas prices.
During Thursday’s forum, Mike Bale, local recruiter with the Billings-based plumbers and pipefitters union, said he worried about supporting plans to export raw materials that could be refined domestically.
“As we export crude oil, we will be exporting jobs,” he said.
Environmental groups, such as the Sierra Club, have also raised concerns about the safe transport of crude oil and have fought expansion of fossil-fuel use. A train hauling Bakken crude oil derailed near Culbertson and spilled 35,000 gallons in July.
Galt called these concerns “scare tactics” and noted railroads are working to upgrade tank cars to prevent spills.
Other panel members added that the oil industry is a crucial part of Yellowstone County’s economy.
“Attorneys, accountants, you name it — we all have some sort of relationship to this industry,” said Steve Arveschoug, president of the Big Sky Economic Development Authority.
This article was written by ERIK OLSON from Billings Gazette, Mont. and was legally licensed through the NewsCred publisher network.