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Utah News

Will Ending The Oil Export Ban Help Utah?

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Low prices continue to impact the local oil and gas drilling industry.

When the U.S. House and Senate passed the omnibus spending bill two weeks ago, they did more than just approve a five percent federal spending increase for 2016. Included in the legislation Congress passed was a provision that lifted a decades-old ban on exporting crude oil from the United States. Just how much that measure will help Utah’s oil drilling industry has yet to be seen.

Utah’s oil and gas wells are found predominantly in Uintah, Duchene, and Carbon counties. Logan Republican state Sen. Lyle Hillyard said that current market prices for crude oil may limit the benefits of allowing exportation.

“The problem isn’t so much the market producing more as trying to get the permits to do more drilling and then open up more access. As long as the oil and gas prices are so low, it’s just not worth it,” Hillyard said. “I understand out in the [Uintah] Basin they have some type of tar in their oil. So, when oil is selling for—I’m just going to use this for illustration purposes—$90 a barrel, the basin oil only sells for like $70 because it’s so much more expensive to refine it.”

Hillyard said that he has asked state legislative staff to research the impact that allowing exportation could have on the state budget. According to a recent Utah State Tax Commission report, revenue from the state motor fuel tax increased nearly 22 percent since last year.

The Beehive State ranks eleventh among states in crude oil production.