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 ...
Thanks. I wondered about that.
SPR was always a funny idea, extracting oil to bury it again. Reminds me of the old gold standard practice of extracting gold from underground, just to bury it underground again. Each had their rationale, but one could ask if there is a better way.
I haven't yet checked into who will be exporting from the US right away but I think I could make a good guess just based on this from the above article :
But Exxon Mobil, which last year was ranked by the Fortune 500 as the nation's most profitable company, is representative of Big Oil's slow evolution on climate change policy.
Regards
Well I guess that if there is a tax, you have to pay it.
Perhaps oil companies gave up their political resistance to the tax as quid pro quo for permission to export oil. That would be a shame.
What comes out load and clear in the NYT’s article is Koch, Koch, Koch. What a trashy newspaper.
Oil is fungible.
Do you understand what that means?
Like gold, it is a global commodity price.
What far complicates oil prices is the significant difference in pricing due to quality. All oil is not equal.
I understand that oil is fungible under most circumstances. But it is very unusual for a major producer to outlaw exports.
From Wikipedia:
Fungibility is the property of a good or a commodity whose individual units are capable of mutual substitution. That is, it is the property of essences or goods which are “capable of being substituted in place of one another.”
So oil is oil and American crude can be substituted for anyone else’s crude. But how can substitution take place if exports are illegal?
First, as I said, there can be major differences in oil qualities. It is NOT all equally replaceable.
Crude oils have different quality characteristics
https://www.eia.gov/todayinenergy/detail.cfm?id=7110
Secondly, the US export ban has been lifted.
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