House passes bill freeing USA oil exports, Senate vote next

A ban on oil exports was put in place in December 1975, with some exceptions. Manufacturing which accounts for about 75 percent of United States industrial production has been under pressure from a strong dollar that makes exports more expensive the global slowdown and moderate growth in the USA economy.

Since then, most crude oil drilled here is not allowed on the worldwide market.

“At current market pricing – where the price of domestic crude oil is trading at a premium to comparable seaborne grades – we see potential for lower USA crude oil exports, higher USA crude oil imports and lower refinery runs in the coming months and perhaps even longer”, Taylor Woods, based in Greenwich, Connecticut, said in a note to its investors.

President Obama is expected to sign a bill that would lift a crude oil export ban because it’s balanced by renewable energy incentives, a research note said.

“Our members are curious to see what the renewable package is to offset the damage done by the exportation of oil”, Pelosi said.

For example, in exchange for Democrats’ support for lifting ban on the crude oil exports, Republicans agreed to extend wind and solar tax credits and authorize a conservation fund for three years.

API President and CEO Jack Gerard said the president’s decision to end the ’70s-era crude export ban will benefit consumers and enhance our energy security.

The measure was included in a massive $1.1 trillion spending bill that easily passed Congress and now heads to the desk of President Barack Obama for his signature.

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.

“I had my own problem with the oil, but I decided I could not empower Big Oil to overcome the successes in this bill”.

Tom O’Malley, executive chairman of refiner PBF Energy, said lifting the ban would lead at least one East Coast refinery to shut down, adding that his refineries in New Jersey and DE are less exposed.

“The petroleum sector has been an enormous contributor to North Dakota’s economy and employment base for decades, leading to lower tax rates for residents and lifting salaries and income across the board”, said Ness.

An overhaul to Total’s Port Arthur refinery finished in 2011 was also tailored to the heavy, sour crude oil varieties. While the time is ripe for business planning, companies should refrain from engaging in any exports of crude oil from the United States until the law is enacted and the US government provides guidance on how the repeal will be implemented in the regulations and in practice.

The deal could be reached before the end of the year in conjunction with broader spending and tax bill.