More Northwest Oil Trains Could Result From Lifting Export Ban, Critics Contend

An agreement in Congress this week to lift the United States’ 40-year ban on exporting oil will not threaten US national security, and its benefits could range from jobs created to build and support export infrastructure, to exploration and drilling jobs in places such as Colorado.

House Democratic leader Nancy Pelosi, of California, told reporters, “At a time when the whole world had gathered in Paris – the whole world, every country of the world, leaders of the world came together to go forward in how we reduce emissions, and reducing dependence on fossil fuels – we’re shipping crude oil overseas, increasing our dependence on foreign oil”. And already, US exports of refined oil products – which were not banned – have doubled in the past eight years.

In November, Lynn Helms, director of the Department of Mineral Resources, said he thought lifting the export ban could boost North Dakota oil prices by $10 to $12 a barrel.

Briggs said Russian Federation and, more recently, Saudi Arabia, have sold oil to American allies in Europe and in Asia.

“If people think this is going to drive (oil) prices up over $40 a barrel, that’s not my judgment”, said Heitkamp, citing the glut of supply on the global oil market and other factors pushing prices down.

Hoeven said lifting the ban is supported by studies at the U.S. Energy Information Administration (EIA), the non-partisan Brookings Institute and the Harvard Business School.

Benchmark U.S. crude dropped $1.83, or 4.9 percent, to close at $35.52 a barrel in NY on Wednesday.

Although it should not disrupt the world’s oil markets given that the USA has become the world’s largest oil producer for more than a year, the decision confirmed that the real battle is being fought on market shares rather than on prices.

Oil prices would have to nearly double for the ban’s departure to be felt by consumers, which is unlikely in the near future.

The American Petroleum Industry, an industry lobbying group, estimates by 2020 that 18 states will gain more than 5,000 jobs apiece because of US crude exports. “Incentivize further oil production”, he said.

“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. And the addition of USA oil on the market could prevent the kinds of price swings we’ve seen in the past decade, according to some experts.

The oil export ban was imposed during the oil embargo of the 1970s to ease oil shortages. But Boustany has been an enthusiastic proponent for lifting the ban.