Americas News
US Moves One Step Closer to Being an Oil Exporter as Senate Backs "No Fossil Fuel Left Behind Act"
The U.S. Senate Energy and Natural Resources Committee has voted to repeal a 40-year ban on crude oil exports, but although this is heralded as a major step towards the prohibition being lifted entirely, experts disagree on how oil prices would be affected, according to reports.
The Committee on July 30 voted 12-10 to approve a bill sponsored by Alaska Republican Senator Lisa Murkowski to repeal the export restrictions and provide new lease sales and drilling in the eastern Gulf of Mexico and off the coasts of Virginia, Georgia, the Carolinas, and Alaska – along with revenue-sharing provisions for some states.
The vote could lead to a full Senate vote later this year on the export policy, but the restrictions can only be lifted if legislation is approved by the full House of Representatives as well as Senate and signed into law.
Many Democrats and environmental groups were said to oppose Murkowski's bill on the grounds it would give U.S. oil producers unfettered access to the world market, but proponents argue that current policy does not acknowledge the nation's record high oil production.
Washington Democratic Senator Maria Cantwell says more time is needed to debate the matter, calling it "one of the most contentious issues that has ever been before the committee."
Jay Hauck, a spokesman for Consumers and Refiners United for Domestic Energy, released a statement saying that Murkowski's bill would reverse the U.S.'s attempt to gain energy independence and cause gasoline prices to rise.
However, supporters point to studies suggesting that exports have minimal impact on petroleum product prices and in fact a price drop could result if export restrictions are lifted.
Last year, Christopher Rex, chief economist at the Danish Shipowners' Association, noted that if the U.S. is allowed to export crude, "the crucial thing from a shipping perspective is who the buyer will be" and that very large crude carriers (VLCCs) could benefit most from a change in U.S. policy.
As for market reaction to exports, when the U.S. Commerce Department quietly approved the first exports of unrefined American oil outside North America in January of 2014, the gap between U.S. and global oil prices narrowed on this news, causing some analysts to predict a broader relaxation of the country's export ban.
