Keep in mind that most USA refineries are against reopening oil exports, arguing that they would be hurt if crude oil is shipped overseas to be refined. “This, combined with Saudi Arabia’s unwillingness to curtail production, could keep the price of oil under significant pressure well into 2016”. Foreign refineries are better suited to handle light crude, so allowing exports would mean American refineries could focus on the heavier stuff, leading to gains in economic efficiency.
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Mason says exports shouldn’t have much of an effect at the pump, because gasoline prices have historically been tied to the global oil benchmark. That decline lasted for nearly 40 years and the US increasingly relied on oil imports. And the addition of USA oil on the market could prevent the kinds of price swings we’ve seen in the past decade, according to some experts.
Chief executive officers of US oil producers, from integrated global majors Exxon Mobil Corp to frackers like Continental Resources Inc, had urged the ban be lifted.
While many Democrats found lifting the export ban a bitter pill, Ryan could not resist a little gloating.
Environmentalists condemned Wednesday a budget deal in Congress that would pave the way for the United States to restart oil exports. “This is a big win for America’s energy workers, manufacturers, consumers and our allies”, he said.
The refiner provision is created to allow independent refiners to exclude 75 percent of oil-transportation costs, such as pipeline tariffs, rail costs and tanker fees, from their pre-tax net income when calculating an existing domestic manufacturing deduction. In pursuit of energy independence for the United States, the act created petroleum reserves, extended oil price controls, and mandated fuel economy standards.
The Congressional Progressive Caucus, a group of influential liberals in the House, is “skeptical” of the oil ban’s inclusion in the spending bill. The U.S. rivals other oil-producing nations again. Because U.S. crude isn’t as cheap relative to world prices as it has been in recent years, exporting it would be now uneconomic for many producers.
“It is corporate welfare for the most profitable industry in the history of the world, the oil industry”, he said. In return, they agreed to the demand from Democrats for a five-year extension of credits for wind and solar energy producers and a renewal of a land and water conservation fund. Democrats also blocked a push by Republicans to GOP proposals to impede Obama administration clean air and water regulations. The latest study by the U.S. Energy Information Administration (EIA) concluded that lifting the ban will reduce the discount for light sweet crude oil produced in states like North Dakota and Texas and encourage investment in domestic energy production. “You’re fighting last year’s battle here”, said Robert Campbell, an analyst for Energy Aspects Ltd.in NY.
“There’s still market-share capture opportunity for Canadian crude in the US, and certainly an opportunity for Canada to capture more global market through re-exports of Canadian crude going through the Gulf Coast”, King said.
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Exploration and production companies, many saddled with billions in debt and struggling to avoid bankruptcy after a 60 percent slide in oil prices forced them to halt most new drilling, had viewed exports as a lifeline of sorts.
