Congressional Spending Bill Would Lift The Ban On Exporting Crude Oil

An end to a four-decade ban on USA crude oil exports could be coming under a federal spending compromise under consideration by Congress.

Lawmakers this week realized the benefits lifting the ban would offer to the USA economy and American consumers by acting to lift the out-dated ban on the export of crude oil through a provision in the end of year spending bill.

“The reforms significantly increase the IMF’s core resources, enabling us to respond to crises more effectively, and also improve the IMF’s governance by better reflecting the increasing role of dynamic emerging and developing countries in the global economy”, said Lagarde in a statement.

Some refiners, such as PBF Energy of Parsippany, New Jersey, and Monroe Energy, the Marcus Hook, Pennsylvania subsidiary of Delta Air Lines, have said they may be harmed by repeal of the export ban. That was done to preempt Iran’s entry into the market and to depress prices and US production of more expensive shale oil, Young said.

Higher oil prices have traditionally been advantageous for the financial markets as oil rich nations used to utilize surplus funds in these markets, but the latest fall in oil prices is now resulting in these countries withdrawing money from the global financial markets.

Gregory Hill, president of US oil independent Hess Corp, said this month that ending the prohibition would boost domestic crude prices by about $3 a barrel, or about 8 percent, from around $36.

The White House said earlier this week it opposes lifting the oil export ban, but said it would like to see Congress make investments in renewable energy.

Not everyone in the energy industry supports lifting the export ban. US oil is of a lighter variety, a type that European refiners, for example, can more easily turn into diesel fuel. Heidi Heitkamp (D., N.D.) and Lisa Murkowski (R., Alaska), have been working to persuade once-wary politicians to back oil exports and allay worries that they will be blamed if gasoline prices were to rise. In response, US companies are cutting costs and slashing spending on new drilling as they try to preserve cash flow and stay in business.

Chairman David Porter said, “My fellow Railroad Commissioners and I have worked hard to overturn the ban, whether it be appearing before Congress, the Texas Legislature, or educating decision-makers in Washington that lifting the ban would unshackle the USA energy sector and further enhance our nation’s stature as a global leader in energy”.

The U.S. already permits some crude exports, primarily to Canada.

A measure that would repeal the 1970s era ban on the exports of US crude oil is given a good chance of passing as part of a $1.15 trillion spending bill making its way through US Congress.

The Solar Energy Industries Association, however, said it was pleased with the deal.

The president can still limit exports in case of a “national emergency”, for national security reasons, or if exports cause domestic oil shortages or drive U.S. prices sharply higher than world market levels. The firm represents producers, refiners and midstream companies.