Posted on 01/31/2016 3:19:31 AM PST by Enlightened1
America is wasting little time getting back into the oil exporting business.
Just weeks after Congress lifted a 40-year ban on exporting oil, the first shipments of the black stuff left U.S. ports for Europe.
The first freely-traded shipments of U.S. crude are symbolic of the country's newfound role as a leading producer of oil. America's entry into the world market can also be viewed with relief by those worried about potential supply disruptions. After all, many big oil producers are located in volatile parts of the world susceptible to geopolitical shocks.
"The fact that producers have free access to the global market will make it easier for U.S. supply to respond to disruptions around the world," said Jason Borduff, a former energy adviser to President Obama who is currently a professor at Columbia University.
America officially banned exports in 1975. It came two years after an OPEC oil embargo that banned oil sales to the U.S. had sent gas prices skyrocketing. Newspaper photographs of long lines of cars outside of gas stations became a common and worrisome image.
Fast forward 40 years and the world has changed drastically, with booming U.S. oil production from the shale revolution creating an epic supply glut that recently sent oil prices below $30 a barrel.
Some of that American oil is now finding a home overseas. On New Year's Eve ConocoPhillips (COP) and NuStar Energy (NS) announced what they said was the first exports of U.S.-produced light crude oil since the ban was lifted. The companies shipped oil pumped from the Eagle Ford Shale of Texas.
Other shipments believed to be containing oil pumped from the U.S. have left for destinations in Europe in recent weeks as well.
(Excerpt) Read more at money.cnn.com ...
I thought it was Texas oil, because a lot of Bakken oil is actually very dark green.
Keep in mind we consider OPEC countries like Saudi Arabia that provide military weapons, finance and support Al-Qaeda and ISIS who kill American soldiers.
This is who we call our “friends”.
Would be better off refining it here and using it to reduce our dependence on foreign oil.
This is a great move, opening up markets for free trade. Thank God we no longer have the government telling manufacturers they’re arbitrarily banned from selling their products to somebody. The ban better not go back in place when oil supplies are tighter again. Right now the government is acting like a stupid Joe 6-pack stockholder...they’re saying sell when the price is low and hold when the price is high.
All banning exports can do is disincentivize providers from producing domestic supplies. When they reach the limit on how much they can sell here, they will stop producing. Now they can continue to produce, sell and create jobs even when domestic demand is met.
However, we increased our dependence on foreign oil over the past eight years all while the leadership pretended to want to reduce same.
Reducing that dependence disincentivises OPEC pulling another oil embargo as such a move would have much less impact.
Also, reducing domestic energy costs either for home heating or vehicles would take some edge off our crappy economic situation.
The US is now run by people who see the US and US citizens as no different than colonies in Africa in the nineteenth century.
All the "free trade", "free markets", exaggerations people swallowed are now paying off. The right people benefit from globalization and the nation that was America dissolves into a third world resource provider full of warring factions.
Yep plus free market works ONLY when everyone is playing by the same rules.
Right now the Trade Agreements are just like playing a rigged poker game.
There’s absolutely no way we can win it the way it’s set up.
booming U.S. oil production from the shale revolution creating an epic supply glut that recently sent oil prices below $30 a barrel
‘
Great news! My nit is this quote. It wasnt the US supply that did that it was the Saudi actions (and others) to also increase production that made the price so low trying to effect a kill shot on the nascent US industry. Friends like that, committing economic suicide, who needs enemies?
All it took is for Paul Ryan to give Obama everything he wanted and more.
OK, I'm open minded on this premise. I've been under the impression that this would be a good thing for our economy. Someone convince me it's not.
Here are what I believe are some of the arguments against the premise that the freedom to export our oil is a bad thing:
We are not providing this oil free of charge. Dollars come into the coffers of American (in this case Texas) extractors, and therefore by definition provide employment to Americans. More jobs at the wells, more jobs in transport, more jobs at the port. Do we want more export of American produced goods and services, or not?
We have to assume that if the oil being exported were more "needed" by American refiners, then the refiners would simply out-bid the European purchasers. The market is therefore saying that this oil is redundant, and absent the European buyers, might remain in the ground, no?
I'm not sure that, with the American shale-oil boom, that it can be said that we are still "dependent"on foreign oil. Perhaps we have reached a point where we are dependent on cheaper-to -extract foreign oil, and foreign oil that our refineries are better suited to refine at this time. The cause of this can be attributed to the severe regulations regarding the building of new refineries in our country, geared to process the different consistency of this "new" American crude, is this not a factor?
I'd like to import nothing at all, but to me the benefit to consumers is always forgotten in these discussions. I've always felt that the reason the left hates Walmart so much is that, on net, Walmart has done more for the American poor than all the Democrat party "programs" combined, via cheaper prices. Should we deprive American consumers this benefit, admittedly provided by China and others willing to enable Walmart to put cheaper goods on our shelves? Isn't the solution to the problem worse than the problem, in that only an over-bearing federal government can remedy this situation? Economic freedom cannot accrue to American consumers if American companies cannot enjoy the same freedoms, this is the reality, and always will be.
From the geo-political standpoint, how can the fact that the OPECkers are now begging us to keep buying their crude not indicate that it is far less dangerous to purchase their oil than admittedly it once was? Our allies in Europe are the buyers of this American crude, isn't it making them less reliant on purchasing from the Middle East, and perhaps more importantly, from Vladimir Putin? How does this net out from a geo-political standpoint? Don't we still need friends? (I know....Obama. Fly in the ointment here, but not much longer.....).
The one thing that makes me think I might be wrong, and those who think this new "right" to export is a bad thing may be right, is that Obama allowed it to happen, and therefore, it must be bad for our country in some way. I just can't get my head around why he has allowed this to happen. It's completely out of character. Perhaps others on this board can enlighten me?
At any rate, I can be convinced that maybe it is a bad thing that our extractors now have the right to export, but I'd like to hear more evidence from those who make that claim.
The feds finally looked up the meaning of “fungible”, did they?
CC
-Would be better off refining it here and using it to reduce our dependence on foreign oil.-
Not all oil is alike. Refineries are huge chemistry machines that are specifically tuned to take certain types of input and produce certain products. Oil that is outside those parameters is of limited use as it may or may not work in the particular refining process the plant is tuned for. Another factor is shipping costs. If you have a well far from a refinery your shipping will be by pipeline or rail. It is currently difficult to build a pipeline and rail is very expensive. It may be much cheaper to sent it to the nearest port than to the nearest refinery. Remember, if the total cost exceeds the current finished product sale price the well will be capped and the company receive no income. Also, there is the economics factor. The broader the marketplace the more oil will be produced and the cheaper the finished products will become. Remember, many of those foreign refineries will send back gasoline or diesel which will compete with locally refined products thus reducing the price.
Agree. But this change was the trade off for giving Obama everything he wanted in his last budget. What does that tell you about out illustrious congress?
Mining and mineral production is not even similar to manufacturing. Get a grip.
they are better allies than all in Europe - UK
“with booming U.S. oil production from the shale revolution”
I notice they do not use the word “fracking.” The MSM can’t say anything positive about fracking. I suppose some people will end up lauding the “shale revolution” and condemning “fracking” even though they are the same thing.
“Would be better off refining it here and using it to reduce our dependence on foreign oil.”
My recollection. Environmentalists stopped the construction of new refineries. That did not stop refiners from improving existing plants. For many years we lacked refining capacity, maybe we still do.
Are we still importing oil? It wouldn’t seem to make sense to both export and import oil. However there are different grades/uses for oil, so maybe it does make sense.
There is a lot to consider here and the only people motivated to think things through are the people in the business.
“All banning exports can do is disincentivize providers from producing domestic supplies. When they reach the limit on how much they can sell here, they will stop producing. Now they can continue to produce, sell and create jobs even when domestic demand is met.”
Yes. But for the ban, we might have been exporting years earlier. That would have meant more jobs, etc.
With the current US oil glut, it seems to make sense to buy for the strategic petroleum reserve. The US Government could buy at low prices.
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