The US crude export ban is one of the bizarre quirks of American politics. American politicians have a long history of demagoguery and idiotic behavior in the sad history of our national energy policy.
At the time it was instituted in the 1970s the US was already a major importer of crude oil. I'm not sure if the ban was designed to be ineffectual, but there was never any impetus to end it, even in the long era of deregulation. The US was the thirstiest country in the world, why would anyone want to export from here anyway?
Although we are still a huge importer of crude, we are producing too much light oil, when our refineries are geared towards refining heavy oil oil. Heavy oil is more technically challenging to refine efficiently and "high-complexity" US refineries on the Gulf Coast are needed to refine Mexican, Venezuelan, and Canadian heavy crudes. The logical thing to do would be to export light oil and import heavy oil. But the export ban prevents this.
Obviously the ban was ostensibly intended to keep US fuel prices down. I say "ostensibly" because in order to have this policy be successful, you would clearly need to also ban the export of gasoline and other refined products. But we have not done this. So millions of barrels per day of diesel is exported from the USA. US gasoline and diesel prices will never get far below world prices, because then people would just export more gasoline and diesel out of the US to take advantage of any price difference. So now that there is a glut of US light crude, the price differential between US and world light crude oil grades is not accruing to the US consumer, it is accruing to the US refining industry. In fact it is a massive subsidy to the US refining industry. The refining industry and the refining unions have the gall to lobby against lifting this ban. I can only imagine how they would cry if congress fixed the ban and ended exports of refined products too, so that the benefits would accrue to the consumer instead of the refining industry, as it ostensibly was originally intended.
The Republicans are pushing bills through to end the ban. Its hard to see how this could get held up or vetoed, but in the world of US Energy policy I suppose anything can happen. The Dems could bow to the environmental left(a la Keystone), or the Republicans could put a highly offensive and wholly unrelated rider in the bill (like the abortion language in the recent anti-human trafficking bill). Ending the ban will hurt refiners and help domestic E&Ps.
At the time it was instituted in the 1970s the US was already a major importer of crude oil. I'm not sure if the ban was designed to be ineffectual, but there was never any impetus to end it, even in the long era of deregulation. The US was the thirstiest country in the world, why would anyone want to export from here anyway?
Although we are still a huge importer of crude, we are producing too much light oil, when our refineries are geared towards refining heavy oil oil. Heavy oil is more technically challenging to refine efficiently and "high-complexity" US refineries on the Gulf Coast are needed to refine Mexican, Venezuelan, and Canadian heavy crudes. The logical thing to do would be to export light oil and import heavy oil. But the export ban prevents this.
Obviously the ban was ostensibly intended to keep US fuel prices down. I say "ostensibly" because in order to have this policy be successful, you would clearly need to also ban the export of gasoline and other refined products. But we have not done this. So millions of barrels per day of diesel is exported from the USA. US gasoline and diesel prices will never get far below world prices, because then people would just export more gasoline and diesel out of the US to take advantage of any price difference. So now that there is a glut of US light crude, the price differential between US and world light crude oil grades is not accruing to the US consumer, it is accruing to the US refining industry. In fact it is a massive subsidy to the US refining industry. The refining industry and the refining unions have the gall to lobby against lifting this ban. I can only imagine how they would cry if congress fixed the ban and ended exports of refined products too, so that the benefits would accrue to the consumer instead of the refining industry, as it ostensibly was originally intended.
The Republicans are pushing bills through to end the ban. Its hard to see how this could get held up or vetoed, but in the world of US Energy policy I suppose anything can happen. The Dems could bow to the environmental left(a la Keystone), or the Republicans could put a highly offensive and wholly unrelated rider in the bill (like the abortion language in the recent anti-human trafficking bill). Ending the ban will hurt refiners and help domestic E&Ps.
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