In Freight News 27/05/2015
Calling an end to a 40 yr US ban on Crude Oil exports and using the new found energy bounty to strategic advantage is on the front burners now.
“We have got an abundance of supply,” Wisconsin Governor Scott Walker said last week in Oklahoma at a gathering of putative Republican candidates for next year’s presidential election. Lifting the ban, he said, would allow exports to “our allies in Europe, where, instead of being dependent on Vladimir Putin and the Russians, they could be dependent on Americans.”
US President Barack Hussein Obama’s administration has allowed some exceptions, but has said it will not open the door to Crude Oil exports as long as the United States is still importing some Crude Oil. The Republican-led Congress is reluctant to push too quickly for an end to the export ban, fearing political repercussions should gasoline prices spike in the aftermath.
But several in the ranks of Republican presidential candidates or likely candidates are warming to the idea. Gov. Walker’s call was echoed by others in Oklahoma, where powerful Crude Oil and Nat Gas interests want the ban lifted.
Former Texas Governor Rick Perry is calling for faster approval of Liquefied Nat Gas (LNG) exports, vowing to “flood Europe” with it if elected president. That kind of talk upends the past politics of energy scarcity, perhaps most famously expressed by the “drill, baby, drill” mantra of the Republicans’ 2008 vice presidential candidate, Sarah Palin.
Drilling in Alaska and off-shore waters was seen as a way to boost America’s petroleum reserves and curb dependency on foreign oil. But that was before the advent of widespread hydraulic fracturing – the drilling process known as fracking – unlocked new domestic oil and gas reserves.
The boom in Us supply disrupted global Crude Oil markets, causing a sharp decline in prices and lowering gasoline costs at home. The emergence of energy abundance presided over by a Democratic president who embraced fracking caused Republicans to form a new plan of distinction on energy policy.
Proponents argue that Crude Oil exports would be a job creator.
Low prices have forced the global energy industry to scale back drilling projects and lay off workers.
Lifting the ban carries some risks.
Oil refiners oppose lifting the ban because it keeps the domestic Crude Oil they buy at low prices.
And there is nervousness in Congress that lifting the export ban could trigger a backlash from the public if gasoline prices spike. Senator Ted Cruz of Texas, a declared presidential candidate, proposed lifting the ban earlier this year but pulled his measure before it could be voted upon.
If exports happen and gasoline prices go up, and then the Congress gets the blame, so expect the status quo on exports in here.
Have a terrific week.
