Lifting the ban on crude oil exports helps Western Slope
By Kristi Pollard
Grand Junction Economic Partnership
When Gov. John Hickenlooper expressed his support for the Jordan Cove Energy Project, he joined the Grand Junction Economic Partnership, Grand Junction Area Chamber of Commerce, and West Slope Colorado Oil and Gas Association in citing the potential economic benefits of the project to western Colorado.
We should absolutely remain optimistic about the prospects of the Jordan Cove facility. The project is exciting, but remains several years away assuming all goes well in the permitting processes. It’s also important to remember that this is not the only way of increasing oil and gas activity in the Piceance Basin. Another important step to stimulating energy development on the Western Slope is to lift the ban on U.S. crude oil exports.
Congress is currently considering lifting the ban, and Colorado’s elected officials have been largely supportive of the effort. It would be hard not to support lifting the ban considering the groundswell of support Colorado’s congressional delegation has from constituents on this issue. Earlier this month, Vital for Colorado, a broad coalition of business, civic and economic development leaders, along with thousands of Coloradans from across the state dedicated to supporting and promoting the benefits of energy production in Colorado, joined with nearly 100 economic development groups, businesses and elected officials from every region of Colorado in expressing their support of lifting the oil export ban.
And why wouldn’t we support lifting the ban? The ban is a relic of the last energy crisis which originated in 1975 when the world and our energy situation looked much, much different. What appeared to be rapidly a deteriorating supply 40 years ago has given way to unprecedented abundance, thanks to vast improvements in technology.
We have seen first-hand the technological innovations of combining horizontal drilling and hydraulic fracturing. We’ve unlocked so much previously unattainable oil and natural gas in the United States, we’ve almost become victims of our own success. Opening further market availability would relieve some of the issues associated with our excess supply.
In addition, study after study from non-partisan groups such as Colorado-based IHS and the Energy Information Administration tout the benefits of ending this outdated ban. The IHS report shows the following benefits: $746 billion in additional economic investment and an average increase in domestic production of 1.2 million barrels per day; $265 billion in overall savings for consumers, translating into as much as $391 in annual household savings; and an average decrease of eight cents per gallon in the cost of gasoline.
You may be asking, “What about western Colorado?” The Piceance Basin is not noted for producing oil. In fact, it’s our dry gas that has been squeezed thanks to cheaper production in the Marcellus and elsewhere. So what’s in it for us?
Considering the new ozone restrictions that have been handed down from the federal government, natural gas is likely to become even more vital to meeting the new requirements. That means increased demand for natural gas vehicles for fleets, more natural gas to heat our homes and cook our food and more natural gas to power oilfield operations.
Oil and natural gas producers are increasingly switching from diesel and relying on natural gas to power their operations. Rigs, fracturing crews, even pumpers in pickups are driving bi-fuel vehicles to help meet air requirements.
As lifting the ban on crude oil exports will assuredly increase drilling activity, demand for locally produced natural gas is likely to rise as well. The Piceance Basin is ready to resume its role as a key producer of natural gas, and a rebound in activity will galvanize the local economy.
We should support oil exports for the benefits to our country, to our state, and to western Colorado.
Kristi Pollard is the executive director of the Grand Junction Economic Partnership.