Assuming the legislation is passed by both the House of Representatives and the Senate (likely by Friday of this week), and the president signs the bill into law, as is now anticipated, USA oil producers will soon be able to export crude oil with minimal restrictions for the first time in almost 40 years.
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Sources close to the negotiations say that Democrats got an agreement for temporary tax breaks to boost wind and solar development as well as social spending priorities from the Republicans in return for agreeing to lift the oil export ban.
CRADDICK: “Lifting the Antiquated US Crude Oil Export Ban Will Be Monumental”
Commissioner Ryan Sitton said, “Lifting the crude export ban is critically important to Texas oil producers who are { currently US } oil producers will soon be able to export crude oil with minimal restrictions for the first time in { nearly
Limits on US oil exports would be lifted immediately, according to the bill released early Wednesday by the House Appropriations Committee. “We have a ban, we can’t export, and we are the only producing country in the world that cannot export”.
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In exchange for lifting the export ban, Republicans agreed to extend tax credits for renewable energy, like wind and solar, and to remove riders from the bill related to various environmental regulations.
In recent years, oil industry lobbyists like the American Petroleum Institute have been aggressively chipping away at the oil export ban.
“The Democratic leadership traded this ban for a small extension of taxes that support renewable energy”, said Wenonah Hauter, executive director at Food and Water Watch. Also, 1 million barrel per day of U.S. oil would add to the existing offer, meaning that, theoretically, the bearish pressure on oil prices could be strengthened as a result.
Crude oil producers could also look to export oil out of Corpus Christi, Texas, to Mexico and points further south because it would be cheaper to export that crude oil on a foreign-flag vessel than ship it on a Jones Act tanker to Louisiana or the East Coast. The so- called shale revolution has lifted US oil output for seven straight years, making the nation the world’s third-biggest producer behind Russian Federation and Saudi Arabia.
Opponents of lifting the export ban said the action would harm the environment and could lead to an increase in fiery derailments of crude-carrying trains.
However, Wojciechowski warns that after a “short-term exuberance” in prices, markets will consider the sobering view that USA oil exports will be in the form of a “trickle” rather than a flood over time. Refiners in the USA are nearing capacity for refining light tight oil and there are not many major infrastructure upgrades planned that will, in the near-term, increase the capacity for refining light oil in the U.S. Many economists, however, say that US oil exports would have little or no effect on prices, largely because the USA already exports record amounts of gasoline and diesel.
“This is a bit of a lifeline for US producers”, said Joe McMonigle, who served as chief of staff of the Energy Department under former President George W. Bush. According to a study by IHS, a global provider of data and analysis, lifting the ban will attract an estimated $750 billion in new investments and create almost 400,000 additional jobs in the USA between 2016 and 2030.
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Lifting the ban on exporting oil would repeal restrictions on exports of products such as coal, petroleum products and natural gas.
