With the oil glut firmly in place, many Americans are pushing for the U.S. oil export ban to be lifted. Producers especially are hoping to get their excess supply, brought on by the shale boom of recent years, out into the world.
Now, those in favor of lifting the ban have some unlikely allies: U.S. oil refineries.
U.S. refineries have profited from both the shale boom and the oil ban. Excess oil produced domestically means more oil to be refined, and the ban means that supply must be refined into certain products to be sold to other countries.
But more recently, many oil refiners are seeing the long-term benefits of exporting U.S. oil supplies. Free trade agreements have helped refineries export their product to global markets.
Now is the time to extend that free trade freedom to all oil supplies of all grades. Big Oil companies with a hand in both production and refining have written to the House and Senate to lobby for this change. ExxonMobil, BP, Chevron, and Shell are among those who lobbied.
However, free trade agreements are not the only barrier preventing open U.S. oil exports. Other problems refineries would like to examine and reevaluate are the Jones Act, which requires American-made ships manned by mostly Americans to transport crude oil supplies, and the Renewable Fuels Standard (RFS), which requires that refined fuels must be a certain percentage biofuels.
Opponents of these changes, such as the aptly named CRUDE, or Consumers and Refiners United for Domestic Energy, continue to argue that exporting domestic oil would hurt refinery businesses and American consumers.
ExxonMobil admits that in the short term, it may cost the company some profits if more unrefined oil is allowed to be exported. But the company asserts that free trade will benefit everyone in the end by both encouraging more energy production investments and strengthening the whole country’s economy.
Ken Cohen, ExxonMobil’s vice president of public and government affairs claims, “we understand that supporting free trade trumps supporting protectionist policies that may benefit our bottom line.”
If Big Oil is willing to give up a chunk of short-term profit for long-term gains, it’s definitely time for the rest of the American oil market to fall in line.
To continue reading…
Click here to read the Reuters article.
Click here to read the ExxonMobil Perspectives article.
Christian DeHaemer
Check us out on YouTube!Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
