Skip to comments.Misconceptions feed reluctance to allow export of US crude
Posted on 06/01/2014 3:15:49 PM PDT by thackney
Three misconceptions make US officials reluctant to allow the export of crude oil. They are:
· The US will become a net oil exporter
· Oil is oil.
· Exporting crude would raise the US price of gasoline.
Expectations about the countrys becoming a net exporter trigger a strange hoarding reflex. Shouldnt the US keep its oil?
Well, no, not if the oil has greater value elsewhere. The US probably wont become able to produce more oil than it needs, anyway. It remains a net importer of nearly 6 million b/d. Further production gains and consumption cuts probably wont close that gap. Recent developments make clear that oil is not all the same, that its quality varies widely.
US production increases are almost all of light, sweet crude and NGL. That creates problems for refineriesmany of them in the Midwest and on the Gulf Coastdesigned for large doses of heavy, sour feedstock.
For the system to work optimally, the crude slate needs to match refinery design. By that standard, the Gulf Coast increasingly has too much light material and too little heavy feed.
Alignment would come by allowing bitumen from Canada to displace light crude and condensate not needed on the Gulf. Surplus light material should be able to move to where its needed. Condensate, in particular, needs to move to Asia.
Yet current law not only disallows most exports of crude oil but also leaves unclear whether gas-plant condensate falls subject to the ban.
Fear about gasoline prices breeds reluctance to act before an election. But gasoline prices are influenced far more by markets in Europe, to which products can be exported, than by US crude values suppressed by Gulf Coast imbalances. Allowing crude exports would have little effect on the price of gasoline.
The Energy Information Administration has begun breaking out crude quality in its production forecasts. The move usefully underscores the growing importance of quality differentials.
Officials should get the message and accommodate oil-trade policy to modern realities.
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Commies fear the Free Market.
Every gallon of gas I use should not be costing over $4.00, that is absurd.
Democrats want to keep the Oil and Gas in the ground until they get 1 party rule ,then sell it and get rich
Don’t worry, it’s all the ‘government’ doing it. Even though things really haven’t changed that much since the 2000’s. I remember it getting down to 75 cents in the mid to late 90’s and oil prices weren’t *that* much less.
It’s a huge racket. Period. Supply and demand do not matter in the gasoline market. Heck, demand is down majorly and prices still never drop.
Oil is not turnips. So, yes, the US should be able to keep it's oil to the extent we, the point of origin, are paying more favorable prices. Otherwise, what is the point in giving preference to any American oil company drilling on American leases? We might as well invite the Russians over or the Chinese or the Japanese or the Balaniese and triazillion the lease payments and permit costs, if it's all about profit for the individual companies, American public and industry be damned.
If gas was cheap, every illegal and his 8 family members would be rolling nationwide in their 1986 Suburban....
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2 or 3 more refineries in this country would put the U.S. in the energy independent catagory....our supply is virtually endless, but you can’t put crude oil in your corvette
The problem is not refining capacity, We use more oil than we produce ourselves. We have to import oil to keep our refineries full. We actually export surplus products because we refine more than we use.
Oil fell below $10 back then in many locations.
I would put a positive spin on repeal:
A free market in oil, both import and export, will reduce the price of gasoline to the consumer by:(a) importing heavy crude to bring low API refineries to capacity, increasing supply, and (b) exporting light crude that cannot be refined by domestic high API refineries operating at capacity, increasing domestic light crude prices without affecting pump prices and simultaneously stimulating greater exploration and production.
A free market in oil would be a win-win for both the consumer and the national economy.
Restraints on trade cause four things, all bad: increase pump prices, decrease exploration and production, reduce economic activity and kill jobs.
Oil should be back down to that level as well.. If not maybe double. I can see $1.50 gas, but we’re being robbed. Maybe you work for Aramco and don’t care.
I should win the lottery as well, even though I don't buy tickets.
Maybe you work for Aramco and dont care.
Or maybe I live in the real world and not a fantasy place.