“Shale-Oil Boom Puts Spotlight on Crude Export Ban” – 1 January 2014, Wall Street Journal

The flood of natural gas might have the US rethinking its ban on crude oil exports, which dates back to the 1970s.

The world’s biggest oil refinery is located in the US, along the Gulf Coast, and is pumping out an oversupply of crude. The abundance of oil is causing prices to crash, forcing producers to look at their other options — i.e. exporting. These last few months, the American Petroleum Institute (API) has been fighting to lift export restrictions, as is Exxon Mobil, the US’s largest energy company. US Energy Secretary Ernest Moniz has more or less agreed, noting that the bans were instituted during the period of an energy dearth, not an abundance.

Arguments on the ban pit environmentalists, producers, consumers and the government all against each other. Proponents contend that removing the ban will boost the US’s trade deficit; opponents want to retain supplies in the US so that we rely less on the Middle East; others worry about the negative effects of increased drilling on the environment and climate.

The US currently exports coal, electricity, gasoline, diesel and natural gas — everything, it seems, but crude. Crude production is on an upswing in the US, largely due to shale formations located in Texas and North Dakota. It’s predicted that these formations will generate around 7.7 million barrels/day in 2014, and, according to the Energy Information Administration (EIA), set to grow by 24% to 9.6 million barrels/day in 2019. The onslaught of oil could drive down prices, ultimately slowing the nation’s energy boom.

The only way Congress is likely to immediately act is if the ban induces layoffs of energy workers. Regardless, any revisions to the law won’t be immediate. But the new year might just be Exxon’s, and other major energy companies’, year.

We believe that US oil companies should be allowed to export crude oil as a tool lower trade deficit, and increase export-related high paying domestic jobs.

See also:
Exxon Presses for Exports

Developed and Written by Dr. Subodh Das and Tara Mahadevan

January 3, 2014

Phinix LLC

Copyright 2014. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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“Exxon Presses for Exports” – 11 December 2013, Wall Street Journal

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Wall Street Journal

According to Exxon Mobil’s annual energy outlook, in the following decades, the world’s rising need for oil and energy will be met by ample amounts of petroleum sourced both in the US and globally. Exxon is asking the US to end embargoes on crude exports, which were originally created during the Arab oil embargo of 1973. The oil giant believes that the nation is now generating enough crude to become an exporter.

The US’s abundant amounts of oil have created some issues for Exxon and many energy companies: increased production has flooded US demand, causing domestic prices to decrease and gnawing at energy companies’ profits. The US doesn’t allow crude to be exported to other countries, except Canada; however, the government will soon allow natural gas to be exported through terminals to countries that don’t have free-trade agreements with the US.

Exxon’s outlook states that, by 2015, more oil will be tapped in North America than from Organization of the Petroleum Exporting Countries (OPEC), excluding Saudi Arabia. However, by 2040, Exxon foreshadows that OPEC will produce 45% of the world’s petroleum. Exxon’s outlook predicts that the world will use 35% more energy in 2040 than 2010, stemming from growing incomes and populations in developing countries like India and China. Exxon also predicts that oil and gas will supply 60% of energy used in 2040. Exxon’s projections are optimistic, noting that 65% of the world’s crude will remain untouched in 2040.

Lifting this embargo might be met with opposition, as consumers worry that crude exports can lead to rising US gas prices, and environmentalists worry about the environmental consequences of enlarged production. Exxon’s outlook reinforces the split between those who promote fossil fuel emission limits, and those — like Exxon — who deem such limits as impractical.

Exxon believes that coal will be mostly forced out by natural gas by 2030. By 2040, sources of gas, from materials like shale rock, will make up one third of the world’s energy.

As guardians of the free-trade market and pragmatism, we believe that US oil companies should be allowed to export (and import) oil and any other energy sources.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

January 2, 2014

Phinix LLC

Copyright 2014. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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