Everyone wins: Washington ends 40-year crude export ban

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. Crude oil prices crashed below $35 a barrel, and a gallon of gasoline is on the verge of falling below $2 per gallon. We are big fans of renewable energy, and extending the production tax credits is critical, but it shouldn’t come at the expense of communities, our economy and the global climate.

Late on Tuesday evening congressional negotiators wrapped up a sprawling deal to keep the USA government operating through September.

“It’s just more oil being introduced into a wildly oversupplied market”, said John Kilduff, partner with Again Capital. “Although there were some good things in the bill, like lifting the crude oil export ban, one of the reasons I voted against it was that it continues Obamacare and gives a $30 billion tax break that greatly benefits groups that forced Obamacare on the rest of us”. In these cases, the EIA said, the spread between the US oil markets and worldwide ones wasn’t significant enough for large shipments of USA crude overseas to make enough money.

With the stroke of a pen, U.S. President Barack Obama will end 40 years of crude oil export limits when he signs off on a repeal passed by Congress on Friday.

Increasing US oil production and low oil prices support the move toward ending the ban. “This will also lower prices at the pump by as much as 13 cents per gallon and produce an additional 1 million barrels daily if this ban goes away”.

Refiners have been divided on the issue, as exports of crude would increase their costs after a bounty of cheap domestic oil brought several years of surging profits. Importantly, this is must-pass legislation, meaning that it will be very hard for the president to veto the bill lifting the oil export ban.

Technology. U.S. energy companies have developed new techniques that not only free oil and gas from fields once thought unreachable, they are returning to oil fields that, using older technology, were thought to be long drained of all fossil fuels. “The wind and solar tax credits we added to the omnibus bill eliminate about 10 times more carbon pollution than the export of crude oil will add”.

But, Upton wrote, lifting the ban may spur investment to expand the Louisiana Offshore Oil Port to allow for imports and exports, which would create “a two-way trading hub” that could shift global focus to Louisiana’s Gulf Coast, making it a “global hub” for the industry. “Studies show lifting the ban would lower gas prices by up to 12 cents per gallon”, American Petroleum Institute President and CEO Jack Gerard said.