Here Are the Biggest Winners as the 40-Year Ban on U.S. Crude Oil Exports Ends

Money Matters ^ | 6/27/14 | dr. Kent Moors

[mgist]

After over four decades, it looks like America is getting back into the oil export business again.

For the first time since the 1970s, Washington has opened the door to sending more U.S. crude oil abroad.

Of course, the United States has been exporting oil products for some time now.

In fact, America is now the largest exporter of products like gasoline, low sulfur heating oil, and diesel fuel in the world.

But until now, companies were hamstrung when it came to the raw material itself.

Of course, there have been a few exceptions. Very heavy California crude, which has to be sold at a deep discount and for which there is not a ready domestic market, has received some permissions to export. In addition, a few tolling programs - in which the raw material is exported out and finished products are imported back in - have been allowed.

But for the lion's share of what is pumped out of the ground at American fields, the domestic market has long been the only option.

This change in policy promises to open up new opportunities for investors...

U.S. Crude Oil Exports: A Major Reversal in Policy

Late Tuesday evening, the U.S. Department of Commerce announced that it would allow exports of ultra-light oil (essentially condensate after very minimal processing) by two companies - Pioneer Natural Resources Co. (NYSE: PXD) and Enterprise Products Partners LP (NYSE: EPD).

Both requested the exports from production at tight/shale oil plays in the Eagle Ford basin of South Texas.

As volumes go, this is a very small step. But it is a major change in policy (despite what the Commerce Department was trying to tell everybody yesterday). And that means other companies are certain to follow suit.

Earlier this year, Continental Resources Inc. (NYSE: CLR) Chief Executive Officer Harold Hamm said he expected an opening for across-the-board crude oil exports. And CLR just happens to be the largest producer in the Bakken.

After yesterday's announcement, we've now learned export permissions will certainly be granted on an ad hoc basis. These changes are now set to begin in August, marking the end to a restriction that was initiated for national security reasons during the Arab Oil Embargo of 1973.

Of course, some U.S. companies have already found a way to get around this restriction. It involves boiling the oil to take out some of the more easily separated gases in order to "stabilize" the crude.

As such, the oil has been initially "processed" without actually being refined. But the result is enough to qualify as an "oil product," which puts it in a category that is regularly exported.

Here's what this important development means for energy investors...

[familyop]

SunkenCiv is right. It was Obama's move with some of his favorite anti-competition constituents. Links and information in comment #20 should clear it up quickly enough.

[Alberta's Child]

Are you suggesting that mineral rights owners and private industry subsidize our energy usage out of their own pockets?

Not at all.

[Alberta's Child]

And Nigeria, Venezuela, Iraq, etc.

[Alberta's Child]

???

And 'scuse me while I go visit the doctor to get a post-op update on my sex change operation. LOL.

[mgist]

I have no problem with lifting export bans.

The problem is the back door deals for the exclusive benefit of companies that Soros is a majority shareholder.

The fact that rewarding political Fat Cats, is the only motivation, is the reason domestic energy will go no where under Obama. In case you haven't noticed he is also beholden to OPEC nations.

This process was not transparent, and we have to put an end to Obama abusing the constitution, the US Military, and American citizens, to support his Radical Islamists. It has been clearly documented.

Samuel Hersch, famed author, did a good job of connecting the dots of Obama's illegal use of the US military to go to war in Lybia, Syria, and Pakistan.

The Red Line and the Rat Line.

The foreign press also recognizes Obama's illegal actions. "Obama's Illegal Use of US Military A True Concern"

"The real Obama scandal: fighting illegal wars in Libya and Pakistan The AP, IRS and Benghazi controversies are political sideshows. Obama's use of illegal force abroad is true concern" The Guardian 2013.

I hope the oil companies call Obama out on his insider trading deal with Soros, and force him to play fair and treat all companies equally, or sue him and Soros.

I can't believe that a president in this country can do what he does.

[mgist]

This is THE ONLY winner of any of Obama's energy policies.

Soros’s Oil Spill Payoff

June 22, 2010 by Tait Trussell

Within 48 hours after President Obama issued the six-month moratorium on deep-water drilling, the George Soros-backed Brazilian oil company, Petrobras, contacted a large New Orleans company, Laborde Marine, which services the deep-water drilling market. The company was seeking to lease all its vessels.

“If the moratorium on deep-water drilling is not lifted, 33 semi-submersible rigs and/or drill ships affected will simply go to other countries where they will be well received, such as Brazil,” Cliffe F. Laborde and J. Peter Laborde, Jr. wrote in a June 4 letter to their Louisiana Senators.

Could this be merely a happy coincidence for George Soros, the major financial backer of Obama’s presidential campaign who also has $811 million invested in the Brazilian oil company, Petrobras? Wasn’t it enough of a payback to Soros when the Obama Administration loaned up to $10 billion to Petrobras? Soros, with his far left-wing organization, MoveOn, is called the Godfather of world socialism. But most relevant currently is that he has been an enthusiastic proponent of global warming and environmental liberalism.

He has urged adoption of a global carbon tax. Could it be more than coincidence that his position is strikingly similar to what Obama called for in his June 14 Oval Office speech on the Gulf oil spill and future energy actions?

“Seizing on the widening calamity in the Gulf of Mexico, to push for legislation he had advocated [a carbon tax] since his campaign” a New York Times article noted. “Mr. Obama said he was willing to look for approaches from Republicans as well as Democrats….” Obama delivered the speech the evening before he was to meet with British Petroleum top executives to demand that they agree to the creation of a multi-billion dollar escrow account to pay claims stemming from the disaster when the company’s rig blew up and spewed oil into the Gulf.

The moratorium could mean the loss of at least 20,000 jobs, Louisiana Governor Bobby Jindal wrote in a letter to Obama. “The last thing we need is to enact public policies that will certainly destroy thousands of existing jobs while preventing the creation of thousands more,” Jindal’s statement said. Each drilling platform idled by the ban puts 1,400 jobs at risk, according to the National Ocean Industries Association (NOIA), a group of drillers and companies that support oil production. Lost wages could reach $10 million a month for each rig, according to Jangal.

NOIA has said: “The offshore industry is responsible for nearly 200,000 jobs in the Gulf of Mexico alone, and provides 30 percent of our nation’s domestic oil production….[W]e must be careful not to make things worse.”