Posted March 9, 2015
How the Oil Export Ban Chokes the Fracking Boom
The Wall Street Journal: Oil is overflowing U.S. storage facilities partly because of the 40-year-old export ban. The wave of bankruptcies and layoffs that many have predicted for the U.S. energy sector may finally be coming, but less because of the distressed price of oil than because producers will have to stop producing if they have nowhere to send their output.
Today’s oil export ban was part of a spasm of nonsensical responses to the 1970s, all of them producing disasters on their own different schedules. Price controls on gasoline, the first stooge, quickly failed amid long lines at gas stations. Fuel-economy rules for auto makers, the second stooge, persist to this day, and played an unsung role in driving the auto industry into bankruptcy by forcing it to lose billions trying to compete in the small-car market with the Japanese.
The third stooge of 1970s energy policy, the ban on U.S. oil exports, is now getting ready to produce its own unique pratfall. Thanks to the fracking boom in Texas and North Dakota, America is producing more light sweet crude than domestic refineries can handle. Oil producers were already being denied a premium of $12 a barrel by not being allowed to export this oil. Soon the only option may be to shut down production altogether.
Read more: http://on.wsj.com/1KKYbRq
More industry news:
Analysis: Is the U.S. Ready to Export Oil? http://usat.ly/1AW1oT4
Majority in U.S. Still See Opportunity in Foreign Trade: http://bit.ly/1Mnzlob
Permian Basin Drillers Lead the Way in Water Recycling Push: http://bit.ly/1AVXglX
The World of Energy is Getting Diversified: http://onforb.es/1A9sWnK
Letter: Jeopardizing Growth in the Marcellus Shale: http://bit.ly/1NB4y8W
ABOUT THE AUTHOR
Mary Schaper is a Digital Communications Manager for the American Petroleum Institute. She previously worked on Capitol Hill for the Senate Energy and Natural Resources Committee as Digital Director and for Senator Lisa Murkowski. Before coming to D.C., she spearheaded digital strategy for Murkowski's successful Senate write-in campaign in 2010. Schaper enjoys traveling and taking in the local culture alongside her husband, their son and loyal springer spaniel.