Oil exports good for USA in long term

“The major disappointment in the deal is the lifting of the ban on exporting US crude oil”, said Rhea Suh, the group’s president.

Republicans are welcoming the likely demise of a 40-year-old ban on crude oil exports in the massive year-end spending and tax bills. The documents also note that the Bureau’s 2014 decisions, including new commodity codes affecting how petroleum products are classified, would notably increase exports of condensate (condensate is a lightweight grade of oil that the industry has worked hard to exempt from the ban).

But with USA output now falling as oil prices slump to seven-year lows, traders say foreign buyers may not materialize in a glutted global market. “Well, lifting the ban on the exportation of American oil so it goes overseas rather than staying here in America, it will be a disaster for our economy, our climate, for our national security”. House members were planning to pass a bill for stopgap spending on Wednesday that would fund the government through December 22 and give Congress the time it needed to consider the measure for the full year. Domestically produced crude might be despatched to Canada, and sure varieties of flippantly processed oil are open to exports.

The price of West Texas Intermediate crude sank to $35.52 a barrel on Wednesday, while Brent traded at $37.19. “This, combined with Saudi Arabia’s unwillingness to curtail production, could keep the price of oil under significant pressure well into 2016”.

Wind and solar advocates said five-year renewals of their tax breaks would provide needed certainty to spur further growth.

Including extensions of tax credits for green energy “were the linchpin to getting a deal to lift the oil export ban”, said Senator Heidi Heitkamp, a Democrat from North Dakota, the No. 2 oil-producing state.

“It is a dirty deal for dirty energy right after 190 nations, including the US, committed to do something to address climate change”, said Jeff Tittel, executive director of the New Jersey Sierra Club.

USA refiners want to keep it in place because they’ve benefited from being able to buy oil at the cheaper domestic price and then sell it at the higher global price. The United States already exports around 4.3 million barrels per day in the form of refined petroleum products and has waivers in place to export 500,000 bpd of conventional crude oil.

House Majority Leader Kevin McCarthy said the oil export ban is a relic of the past that makes no sense in today’s globalised world.

Overtime, though, there are fears Gulf Coast refiners may eventually revisit their procurement strategy, especially if heavy oil stops trading at a discount to light oil. Studies show lifting the ban would add hundreds of thousands of jobs annually and billions to GDP while also reducing domestic gas prices.

Opponents of lifting the ban, including many Democrats in the Senate, say it would put oil refining and shipbuilding jobs at risk and more drilling would harm the environment and increase the number of trains carrying crude oil.

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”.