Several weeks ago, I addressed the issue of US oil exports. I referenced the 1973-74 embargo which sent a shock throughout the world with production being cut along with shipments to the US.
One of the items in force since and because of the Arab embargo is the ban on exporting US crude oil. Keep in mind, during the 1970s, the US consumption began to outstrip production, and America started importing more oil than it produced. Just six years ago, pre-Bakken oil and US oil shale plays, it was projected that oil production in the US would likely continue its downward trend. At that time the US imported over 60 percent of the needed oil for consumption. Thanks to technological advancements, there is a new energy horizon.
Today, US oil production is increasing therefore many energy producers want to see the ban on exports lifted. The Oklahoma Independent Petroleum Association (OIPA) is leading the effort for the “case for crude oil exports”.
Royalty owners alone will greatly benefit from American crude oil exports according to the OIPA, including:
“1) The lifting of artificial trade barriers for domestic crude would encourage American oil and natural gas exploration and production, benefiting the nation’s estimated 12 million mineral owners through additional royalty payments. 2) Across the country, crude oil production is climbing faster than our nation’s refining ability. Allowing crude oil exports would allow American oil production to continue to explore for and produce US oil. 3) Removing export restrictions would encourage crude oil exploration in vast areas of the country where oil and natural gas resources have yet to be developed. 4) America is already a net exporter of refined petroleum products, including gasoline. 5) By allowing crude exports, American oil producers will be able to access additional global refining capacity, increasing the availability of gasoline and diesel fuel in the global market and pushing consumer prices down.”
Adam Sieminski, EIA (Energy Information Administration) administrator voiced his opinion regarding US oil exporting stating “I’m not sure we should just automatically assume that would be bad….it might actually be a way to grow the economy, create jobs, and ultimately help reduce prices.” The EIA states that domestic oil production is expected to increase from 6.5 million barrels per day last year to 8.2 million per day by the end of 2014.
As the OIPA states “limitations in the country’s refining capacity and outdated laws that restrict exports of domestically produced crude will make the energy renaissance unsustainable unless action is taken by the federal government. America must ensure this opportunity for continued growth remains by lifting oil export restrictions.”
It is time we come together. The US has the immediate challenge of striving for energy independence. It is extremely important that the US be in a strong position of securing energy reserves within its own boundaries. America Needs America’s Energy!
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