+917718880355

news

Constraint on oil-export likely to ease in 2014

YarnsandFibers News Bureau 2014-01-03 15:41:00 – Mumbai

With America pumping in more crude, 2014 might be the year to see ease in oil-export constraints. US had almost imposed ban on export of crude oil in the wake of the mid 1970s energy crisis.

The final months of 2013 saw signs that the industry would challenge the export restrictions with the American Petroleum Institute, the oil industry's main lobbying group in Washington, saying it was looking to end the ban. Last month, Ken Cohen, vice president of public and government affairs at Exxon Mobil Corp., the nation's biggest energy company, said that it was time to rethink the prohibition.

For decades, even discussing the possibility of exporting domestic oil was a nonstarter in Washington. Now, rolling U.S. production has led to the beginning of a glut along the Gulf Coast, home to the largest refinery complex in the world. Too much crude is driving down prices, making producers eager to export oil to places like Europe where prices are higher.

U.S. Energy Secretary Ernest Moniz made a similar overture, remarking that the export prohibition dated from a time of energy scarcity.

Even as the first trial balloons were floated, politicians began to fight back.

Sen. Robert Menendez, (D., N.J.) wrote the president that easing this ban might be a win for Big Oil, but it would hurt American consumers. Crude oil that is produced in the U.S. should be used to lower prices here at home, not sent to the other side of the world.

Some backers of ending the ban already argue that it would improve the trade deficit, experts say, while opponents will press for keeping oil at home with a goal of reducing dependence on Middle East production. Others will maintain that allowing exports would be bad for the environment.

Michael Webber, deputy director of the Energy Institute at the University of Texas thinks, it will be a huge knockdown fight, because it pits environmentalists against national security hawks against producers against consumers. It's a cage match for a multi-hundred billion dollar market.

If the export restriction causes -- or appears to be about to cause -- problems, such as layoffs of energy workers, Congress might move quickly, said Jason Bordoff, a former senior energy adviser to President Barack Obama.

An actual change in the law is likely to take time. But given the confluence of politics with energy production and price pressures, 2014 is likely to be a year where they will seriously talk about oil exports, said Kevin Book, managing director at Clear View Energy Partners LLC, a Washington, D.C., political advisory firm.

Crude production is suddenly surging, mostly from shale formations in Texas and North Dakota. Plummeting oil prices could slow the boom. But according to the Energy Information Administration envision crude production to break the U.S. record set in 1970 as the production will rise by 24% to 9.6 million barrels a day by 2019.

0 0 vote
Article Rating
0 Comments
Inline Feedbacks
View all comments

Market Intelligence

Ask for free sample Report


why us?
21 yrs

experience

Fortune 500

Customer Base

100%

dedicated team

55+

Countries Served Worldwide


newsletter

Register below to receive our newsletters with latest industry trends and news!

WeCreativez WhatsApp Support
Our support team is here to answer your questions via WhatsApp. Ask us anything!
? Hello