Burning A Hole In Our Pocket: Exporting American Oil
The landscape of American energy is changing. Fracking has opened up once inaccessible resources at great cost to the American public and environment. The question now is what can be done with all this shale gas? Some people want to export it, but that requires changes to American laws.
The issue of easing the crude oil export ban here in the U.S., and adjusting ethanol quotas are quickly becoming hot-button policy issues. There’s a lot of money at stake here, and predictive analysts in the oil market have been hit with surprise after surprise ranging from the boom caused by fracking technology to the attempted reduction of ethanol use through the tailoring of outdated mandates. Now that American crude oil could hit the open market, all bets are off.
Right now American oil exports are in the limelight. The U.S. has been under an export ban since the Arab oil embargo of the early 1970s. This ban is now, in some political sectors, being seen as outdated policy, and there are signs of this ban slowing being slowly dismantled. Already the ban allows American oil to export to Canada, and with the ongoing crisis unfolding in Ukraine the U.S. allowed some U.S. oil to be exported to Europe.
With all of this oil now flowing, the issue of transportation is also on the minds of policy makers. The Jones Act, a law that forces all domestic freight to be carried on U.S.-flagged, U.S. crewed, and U.S. built vessels, has caused waves of tension about the cost of just repeatedly shipping oil from Texas to the East Coast. Additionally, American rail lobbyists have been making the rounds to promote greater use of rail in the shipping of oil in newer, safer tanker cars.
Nothing is going to happen overnight though. 2014 is an election year, so neither party is likely to make any drastic changes to the oil export bans here in the United States. However, international relations and political pressure at home might be enough to at least begin the process of dismantling the export, which probably means higher prices for us, and higher profits for the oil companies.
What remains to be seen is what this effect will have on the United States. There is no clear answer coming from Washington, with some elected officials claiming that lifting the ban will hurt the average American, and open the country up to the impact of foreign oil influences. Others say that exporting the oil would drastically reduce the national debt and of course, “create jobs.” In any event, the political policies of the past are starting to catch up with the rapidly changing technologically driven world we live in today.