USA ban on exporting crude oil could be lifted soon

In the wake of a historic agreement at this month’s Paris Climate Change Conference, the United States is expected to take the significantly regressive step of lifting a 40-year ban on crude oil exports, and the Northwest will find itself directly in the path of the oil industry’s plans to dramatically increase crude oil production for overseas export.

But Brian Busch of Genscape, which gathers data on the oil industry, says pockets of interest will soon emerge, not least because lifting the ban will increase the world’s access to the different grades of crude produced in America. We hope so, although an LSU analysis recently suggested that whatever price impact, the largest outcome is likely to be simply a expanded market for crude along the Gulf Coast. The ban on U.S, oil exports was passed by Congress in the early 1970s following the crippling Arab oil embargo of 1973-1974.

Repeal may not immediately provide a jolt of USA crude exports, due to the relatively small discount of American crude blends, including WTI, to global prices.

Sara Vakhshouri, an energy analyst at SVB Energy International and the Atlantic Council think tank, said the end of the export ban will help stabilize global oil prices.

Oil prices are as low as they are because Saudi Arabia, which depends nearly entirely on foreign oil revenue, maintained production despite falling prices to establish market dominance in the Far East with oil importers such as China and Japan.

Oil refiners strengthened Wednesday after Congress agreed on providing a tax break for refineries as part of a comprehensive $1.1 trillion government spending bill, which included lifting a 40-year ban on most oil exports, according to NPR.

“There are concerns that we have about jobs, [that] jobs will leave the country because they’ve lifted the ban on crude oil”, House Minority Leader Nancy Pelosi (D-Calif.) told reporters. “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”. And already, USA exports of refined oil products – which were not banned – have doubled in the past eight years.

Barry Russell, president and CEO of the Independent Petroleum Association of America, said, “By passing this legislation and lifting the outdated exports ban, American producers will be able to compete on a level playing field with countries like Iran and Russian Federation, delivering energy security to our friends and allies, advancing the energy revolution that has revitalized our economy and providing meaningful benefits to families and consumers across the United States”.

U.S. Rep. Peter DeFazio, D-Ore., on Wednesday announced the Government Accountability Office will investigate the capacity of emergency responders to handle rail accidents involving oil trains. We also export more than ever before. That, in turn, has driven down prices.

A March 2014 poll by Reuters found that almost 60 percent of Americans support the restriction on oil exports.

“This shouldn’t be Republican, this shouldn’t be democrat”, said Murkowski.

In return, Democrats won a five-year extension of credits for wind and solar energy producers and a renewal of a land and water conservation fund and nixed attempts to roll back President Obama’s environmental regulations.