Business, Green

U.S. Oil Export Decision Could Open New Gateway for Industry

U.S. Oil Industry
U.S. Oil Industry

Amid debate over reevaluation of the export prohibitions for U.S. oil, the U.S. Commerce Department has quietly cleared two Texas-based companies to export a type of crude oil, slightly easing decades-old restrictions and possibly opening the door for many other oil producers.

This comes at a time when the U.S. oil industry is seeing domestic production booms and is considering the need to change restrictions to accommodate these booms. The department’s Bureau of Industry and Security (BIS) determined that very light crude that has been only minimally processed could be shipped overseas without a license.

Some say that this change is the BIS’s way of dipping their toes in the water to gauge the temperature. Currently this oil export ‘ban’ does allow certain companies to export oil to Canada, where exports have quadrupled in the past five years, but less than two percent of U.S. oil is being sold outside the country. Last month, energy research firm IHS released a report saying that lifting the effective ban on exports, which supporters are arguing to end soon, would reduce U.S. gasoline prices and boost domestic crude production by almost 30 percent.

The ban is considered by some to be out-of-date and in need of being lifted to continue the growth and success of the U.S. oil industry. However, supporters of the restrictions say that the policy protects U.S. consumers from oil price fluctuations and believe that it should go to a public vote. According to experts, a formal change in export policy is unlikely to happen before midterm elections in November but already Energy Secretary Ernest Moniz has signaled a willingness to reexamine it. Until then it seems the debate will continue.

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