On Wednesday, the U.S. Congress appeared close to agreeing on a spending and taxation bill that includes the measure to lift the ban on oil exports.
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The provision, which was brokered in an agreement unveiled by House Speaker Paul Ryan at a meeting of Republican House members late Tuesday, is expected to give USA oil producers unfettered access to the world market for the first time in 40 years, if the bill is ultimately approved by the House and Senate and signed into law by President Barack Obama.
“Just days after we all were given new hope in Paris, the empire has struck back”, said Stephen Kretzmann, executive director of Oil Change International.
Pelosi also lamented predicted job losses at US refineries that will have less crude oil to refine as oil companies ship their products directly overseas.
“In the long term, however, the liberalization of exports will help companies producing in the USA by enabling them to find the most profitable markets for their oil”.
“Venezuela is likely to snap up some of these barrels, too, to mix with their heavy crude to make a more marketable blend”, said Kilduff. “We have more oil reserves than Saudi Arabia”. Yet, until very recently, President Obama stood by his commitment to keep the oil export ban in place. Crude oil prices crashed below $35 a barrel, and a gallon of gasoline is on the verge of falling below $2 per gallon. Republican legislators must recognize that a significant increase in exports is unlikely in the current market, but that greater trading flexibility within the global market will benefit US producers in the long‐run.
The provision in the package “prohibits any federal government official from imposing or enforcing any restriction on crude oil exports except in certain limited instances such as a national emergency declared by the President”.
Although the end of the export ban may eventually hurt USA refiners who have nearly exclusive access to shale crude, the narrower discount means there’s little difference between buying domestic and foreign oil.
But lifting the oil ban, the aide said, is the “primary sticking point” for liberals as they consider how they’ll vote on the legislation.
Getting enough Democrats on board with lifting the ban required balancing it with some renewable energy tax credits and the potential for conservation programs, said Heitkamp, who called lifting the ban a “huge win” for North Dakota.
The House and Senate on Tuesday evening reached a deal on tax and spending plans that included an end to the oil-trade limits that were implemented in 1975 after the Arab oil embargo.
Restrictions on US crude exports may disappear.
“If people think this is going to drive (oil) prices up over $40 a barrel, that’s not my judgment”, said Heitkamp, citing the glut of supply on the global oil market and other factors pushing prices down.
The lifted ban on oil exports could cause USA crude oil prices to inch closer to parity with global oil prices, which would diminish refiners’ profit margins.
US oil imports rose to 7.9 million barrels a day the second week in December, the highest level in almost a year, according to the Energy Information Administration.
Among the biggest beneficiaries of the US energy revolution: you.
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The ban on the export of crude oil is a relic of 1970’s policy, put in place over concerns of domestic energy scarcity.
