In late July, a tanker loaded with 400,000 barrels of American oil, left Texas for South Korea. This export of oil stands-out because it is the first in nearly forty years. Oil has been essentially banned from export since the 1970’s due to the impact of OPEC’s oil embargo. US oil refineries (where oil is processed), benefited from the ban, because crude was kept and processed in the United States. But, many believe times have changed, saying the ban should be re-examined in light of global shifts.
These days, America is likely perceived as a more reliable exporter of oil than Russia or the Middle East. Shale oil drilling has ramped up in the US by about 70 percent over the last six years -- and it continues to grow leading to gluts in certain parts of the country. Shale oil found in the US is light compared to the heavy crude found in Canada, Mexico, and Venezuela. Experts say US oil refineries, geared to process the heavy crude, aren’t equipped to process the amount of light crude coming at them fast enough. Supporters of the ban say increasing crude oil exports could cause a rise in gasoline and heating costs -- hitting Americans at home and at the tank. Critics of the ban say American exports would lower the international benchmark, leading to more stable oil prices. Supporters say, Americans could leverage high levies on the exported oil and use those taxes as a political tool, increasing tension with the countries, degrading national security. Critics say America can assist its allies by serving as a new source of crude.
Should the US increase their export of shale? If not, what’s to be done with the glut of the light crude? What might be the impact on gas prices and job creation at home, short-term compared to long-term? What impact can exporting more oil have on national security? How does OPEC influence decision-makers when it comes to exporting oil?
Jeff Peck, a lobbyist for CRUDE -- a group of refiners that want to keep US oil supplies at home.
Erik Milito, director of Upstream and Industry Operations for the American Petroleum Institute from American Petroleum Institute (API)