Skip to comments.Ruling could help US become major oil exporter
Posted on 06/26/2014 7:23:40 AM PDT by TurboZamboni
NEW YORK (AP) Companies are taking advantage of new ways to export oil from the U.S. despite government restrictions, and in the process helping the U.S. become an ever bigger exporter of petroleum on the world stage.
The Obama Administration has opened the door to more exports without changing policy by allowing some light oils to be defined as petroleum products like gasoline or diesel, which are not subject to export restrictions.
Although U.S. production has boomed in recent years, the nation still consumes far more crude oil than it produces and remains heavily dependent on imports. But the crude being produced by U.S. drillers in recent years includes types of oils that don't have a big market here. This has the oil industry and some politicians calling for an end to crude export restrictions, which were adopted after the 1973 Arab oil embargo.
Economists generally agree that lifting the restrictions would benefit the U.S. economy, but the ban remains a touchy political subject because of the fear unfounded, most analysts say that lifting the ban on exports will raise gasoline prices for U.S. drivers or compromise U.S. energy security. Most experts believe the restrictions will not be overturned this year because of the coming midterm elections.
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Clintonion Word Twisting - It’s the democrat way.
with oil prices rising isn’t it time to sell the oil to Americans?
or would selling outside the country have the affect of lowering the price of imported oil? not good at the whole global economy thing myself.
Zero may have accidentally done something right.
Sheesh, don’t you know that we don’t deserve low gas prices. The rest of the world has to pay thru the nose for gasoline so we should too.
Welcome to communism.
I would rather see the feds allow the building of new refineries and keep the oil here.
As with any and all decisions in the Obama administration it is only happening because it’s bad for the country or good for Obama.
effff the rest of the world. USA USA USA.
Oil is a global commodity. It’s prices are determined by the market. A good start is to look up division of labor and comparative/absolute advantage.
Let the market determine what gets exported and imported.
I guess it is OK to have Obama change the laws unilaterally when we agree with him. Congress should decide this, not Obama. But the GOP will give him a pass just like they did with Obama’s backdoor amnesty for Dreamers.
What a misleading article.
Condensate is not crude oil.
This ruling only applied to after processing, downstream of the distillation tower, just like refinery products.
This is an so called journalists, trying to pretend this is oil and effecting refineries. It is not.
The parsing of the law allows the “crude” to be exported, circumventing the oil export controls put in place in the days of the Arab oil embargo. Since the light grade of oil extracted has a large admixture of the petroleum gases (natural gas), it is sent through a primary distillation, separating the lighter elements, leaving “petroleum condensate”, a partially refined form of very light crude oil. Because other refineries throughout the world are better equipped to handle this very light crude, it is exported for refining, then either goes into world trade, or is re-imported as a fully refined product.
We don’t have the capability of handling the very light crude without cutting into the capability to process other types of crude, and the Current Regime would not, ever, permit the construction of new refinery capacity within the United States.
Most of our export goes to Canada. Via rail transport or tank trucks. Also because the Current Regime will not permit the construction of a decent network of additional trans-national and trans-border pipelines.
Keep it scarce, and create as many artificial bottlenecks as is possible by executive order or vetoing legislation.
Sure, if there was a true supply and demand market and the gov’t had a true ‘hands off’ policy.
We all know those days are gone, if they ever existed to begin with.
Remember the ‘Pickens’ Plan’? T. Boone Pickens, an established oil/gas man had a viable plan for energy independence and deficit reduction that the idiot McCain all but ignored as a Presidential candidate. I say let's go with the Pickens’ Plan.
Most US refineries are optimized to process heavy and sour imported crudes.
US refining capacity is running near full capacity and it is almost impossible to build more capacity given our environmental laws.
Therefore the most efficient use of our crude may be to sell it on the export market.
More US oil on the market could lower the global price of oil, making the imports cheaper as well, potentially relieving some of the pressure at the pump.
The world market for crude is $114.
Superior grade Texas crude is $106.
The arbitrage is kept by big pipeline companies and multi-national refiners like Valero, Chevron, Shell, to the detriment of local mineral owners and states.
Permitting USA citizens to sell their crude on the open market instead of being held captive only hurts the multi-national companies.
The law is also a “taking” — that is, the domestic producers (generally small companies) are getting screwed out of nearly $10/bbl.
That’s just theft to big companies.
The same can be said of oil. Most US refineries are tooled for heavy crude; the oil in the Dakotas is light. It will cost billions to retool the refineries. So for now, it makes sense to import heavy crude and export light crude. Also with Obama not allowing pipelines, add $15 to the cost of a barrel of oil.
This is one factor in the import/export trade. There are other factors as well, but I fear I have bored too much already.
We don't need any new refineries. Gasoline consumption in the US peaked in 2007 and has been falling. It will continue to fall in the coming years and decades because the CAFE standards will be rising.
US refiners are exporting record amounts of gasoline and diesel, the most since WW2.
But there are refining problems dealing mostly with transportation.
The refiners in eastern US and Canada are set up to refine sweet light Brent crude from Europe but it has a premium price so they desperately want the US shale oil from Dakota and Texas.
The gulf coast refiners are set up to refine the heavy crude that they used to get from Venezuela and they desperately want the oil from the Alberta tar sands. A lot of Alberta oil is already reaching the gulf coast but they want more and want Obama to approve the Trans Canada pipeline.
As for exporting oil, Obama has certain administrative authority to bend the regulations, which he has done, but Congress has to change the law banning oil exports. AS it stands now US producers can export only to Canada and Mexico, which they are allowed to do because of NAFTA.
Even if Congress changes the oil export law, the US will continue to import much more oil than it exports. Sometimes producers need to export because it is more practical to export it than ship it across the country
Nor did the previous regime. One would have thought that would have been part of the War package. Especially when part of the WOT was the instability in the ME and such areas. Building refineries is/was part of the beans and bullets.
I say, let’s go with the free market. I’m not a fan of central planning. America doesn’t need a central government energy plan. Let the states compete on energy and get the feds out of the way.
Most of our new increases, yes, but not most of our production, not yet.
Increases in U.S. crude oil production come from light, sweet crude from tight formations
JUNE 6, 2014