If you ask most US oil producers how the 50pc drop in prices affects their business, the conversation will quickly pivot to the long-standing federal ban on most crude exports. Lifting the ban, which has been in place since the days of disco, is the panacea for all that ails crude producers, at least according to some.
So how likely is it that the White House or Congress will make any meaningful changes to allow US producers to put more of their light-sweet crude oil on the water? According to US energy secretary Ernest Moniz, who surely will play a key role in advising his boss (hint: his office is oval-shaped), US oil producers have not yet made a compelling case.
“I do not think a totally compelling argument can be made on the basis of pragmatic economics,” Moniz said this week, speaking to reporters at the IHS CERAWeek energy conference in Houston.
US producers have lobbied hard to get their views heard, with most US refiners vociferously opposed. Last month, ConocoPhillips chief executive Ryan Lance, Marathon Oil chief executive Lee Tillman and executives from nine other members of Producers for American Crude Oil Exports met with President Barack Obama’s energy and environment adviser Brian Deese to discuss the export restrictions.
Senate Energy and Natural Resources Committee chairman Lisa Murkowski (R-Alaska) this week said she plans to introduce a bill to repeal the ban. Speaking at CERAWeek, Murkowski pointed out that Iran may soon be exporting more crude if the US and other global powers can reach a comprehensive accord with Iran by 30 June on Iran’s nuclear program
“We should not lift the sanctions on Iranian oil while we are keeping sanctions on American oil,” Murkowski said. “It makes no sense.”
In its Quadrennial Energy Review, released this week, the White House affirmed that “increasing domestic oil production has focused attention on US oil export laws established in the aftermath of the 1973–1974 Arab Oil Embargo.”
The review makes no definitive ruling on whether the ban should be overturned. But it seems to hint at the adequacy of the status quo.
“Recent Department of Commerce determinations that liquid hydrocarbons, after they have been processed through a crude oil distillation tower, are petroleum products, and therefore eligible for export, will help avoid adverse production impacts,” the report said.
ConocoPhillips’ Lance seemed to acknowledge this week that a wide-scale lifting of the export ban may be a bridge too far, citing the wave of political paralysis that is sure to grip Washington leading up to the 2016 presidential election.
“I recognize it’s a long hill to climb,” Lance said.
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