Why US will lift restrictions on oil exports

Congressional negotiators reportedly concluded a sprawling agreement late on December 15 to keep the United States government operating through next September. But reports say Democrats need to sign off on the deal, and then the measure has to go to the House and Senate before President Barack Obama could sign it into law.

Greens said the extensions of wind and solar power tax breaks does not justify a provision that would generate billions of dollars for the oil industry. Chevron Corp gained 0.5 percent, and Marathon Oil Corp rose 0.3 percent.

Lawmakers in the house and senate found middle ground to stick the ban repeal in the year-end spending bill.

House Speaker Paul Ryan, R-Wis., called removal of the export ban the most important change in USA oil policy in more than a generation. In 2015 production volumes stayed at the same level due to falling oil prices. In the case of the March futures contract, WTI was trading above Brent early Wednesday.

“The Democratic leadership traded this ban for a small extension of taxes that support renewable energy”, said Wenonah Hauter, executive director at Food and Water Watch. This week, crude prices fell below $35 per barrel, down from more than $100 per barrel in June of previous year.

Congress is getting closer to lifting a 40-year-old ban on oil exports, a move that could be a boon for US oil producers hoping to expand into the global market.

Lifting the oil export ban “could be a big deal some time in the next decade but not in 2016”, he said.

Oil train traffic from the Bakken region of North Dakota to refineries in Washington has increased in recent years.

Companies could see benefits to more open markets over the long term when the price of crude oil increases. This provision further states that “no official of the Federal Government shall impose or enforce any restriction on the export of crude oil”. For decades after the embargo, USA oil production declined as investment waned and existing wells matured.

Mason says exports shouldn’t have much of an effect at the pump, because gasoline prices have historically been tied to the global oil benchmark. The price of oil is based on supply and demand – the more oil on the market, the lower the price to consumers.

The oil and gas industry “needs to participate in the free market”, said Don Briggs, president of the Louisiana Oil & Gas Association.

“Who do countries want to buy oil from?” he asked, “the US or Russian Federation?”

According to White House spokesman Josh Earnest, the grand budget bargain that lifted the export ban was a good deal for Democrats because the legislation will keep funding for Planned Parenthood in place, prevent curbs to Dodd-Frank financial reform efforts and permit Syrian refugees to enter the U.S.

SolarCity Corp, First Solar Inc, Abengoa SA, SunEdison Inc and Sunrun, as well as the industry’s trade group, have spent more than $2 million lobbying Congress this year, according to public records compiled by the Center for Responsive Politics.

The fiscal package would extend tax credits for biodiesel, solar and wind.

“The U.S.is now the world’s largest producer of oil and natural gas, and Americans are enjoying an energy renaissance that has produced abundant supplies of domestic energy resources”. All comments are subject to editorial review.