Congress kills US oil export ban, boosts solar, wind power

With the government lifting our country’s almost 40-year-old ban on crude oil exports, Americans can celebrate an important victory for the energy industry and look forward to potentially lower gas prices, a decrease in our reliance on volatile energy-producing countries and America’s re-emergence as an energy superpower.

Drillers said continuing the ban would choke a boom in shale oil production since 2008 particularly in North Dakota and Texas that has pushed domestic oil prices down from more than $100 a barrel to below $40.

Limits on USA oil exports would be lifted immediately, according to the version of the bill released Wednesday by the House Appropriations Committee.

The bulk of USA oil comes from shale producers.

“U.S. crude exports beyond Canada may end up little more than a quality balancing exercise”, ESAI noted.

In a recently published report, “Crude Oil Exports and the Louisiana Economy”, LSU assistant professor Gregory Upton of the Center for Energy Studies wrote that, “Lifting the export ban and allowing for free trade of all hydrocarbons can create an environment that allows for the Gulf Coast to become the epicenter for hydrocarbon trading”. Here are the reasons why the ban was in place, why it is now being lifted and how consumers and businesses will be affected. Magazine’s 5000 fastest growing USA companies.

Taylor Woods is up about 20 percent for the year through mid-December, helped by mostly bearish bets on crude since January, people familiar with its trades said.

The spending bill also renews the Land and Water Conservation Fund, a 50-year-old conservation program funded by oil and gas royalties.

If House members pass the spending bill later this week, the deal will need to clear the U.S. Senate, where Minority Leader Harry Reid is a critic of the legislation. Those against lifting the ban say that as domestic crude leaves USA shores in tankers, oil will be less plentiful at home.

The ban, which was first passed in response to the energy crisis of the 1970s, blocks the exports of most raw, unprocessed crude, but allows foreign sales of refined petroleum products such as gasoline and diesel. A narrow Brent-WTI spread, which has averaged under $1.50/b so far this month, its lowest relational value in more than two years, makes most United States crude exports uneconomic.

Environmentalists are anxious the move will lead to more oil production.

Some independent refiners, such as PBF Energy Inc., said they may be harmed by an end to the crude-export restrictions.

With their export market largely confined to the United States, Canadian producers have also suffered from the price discrepancy, which widened to as much as US$10 a barrel in recent years.

The benefit of lifting the ban is likely to been seen in the long term, when the market recovers. 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.