Oil Boom: Should US export oil?

Oil Boom: Should US export oil?

A new debate is rising about the latest energy boom in the U.S, as a result of the remarkable fracking (Hydraulic Fracturing) revolution; the United States finds itself in a superior position to export crude oil at favorable prices. But should it?

On the “for” team is the current oil industry, which says that the fall in oil prices could threaten investments in new drilling and the countless jobs that it’s created and supported over the years. Joining them are the free market types, who say that higher exports could lower oil prices all over the world by diminishing the power of OPEC. To make this happen, they’d have to persuade the U.S government to lift the ban on oil exports that have been in place ever since the Middle East oil impediment in the early 1970s, which led to extensive shortages.

While the “against” side includes U.S consumers, who are concerned that they may end up paying more on gasoline, as well as those who dislike the idea of reliance on foreign oil. Then there’s the environmentalists who shun the idea, as substantial quantities of the new oil will come with a heavier toll on the already suffering planet. They commit to mount a campaign just like the Keystone campaign to keep the current export ban from being lifted.

This may turn out to be a very tricky debate. The government will have to consider the arguments of both the camps with equal intensity.

For export of oil:

The oil industry is the biggest supporter for the export decision, a topic it’s expected to bring up when it outlines priorities for the current year. The American Petroleum Institute is of the opinion that exporting a fragment of our surplus crude oil supply could end up providing greater stability to the international supple while creating new jobs and generating higher revenues nationally.

The supporters of free trade imply that it would be highly hypocritical for the U.S to reprimand other countries, like China for restricting the export of rare minerals while it restricts the export of oil. The United States prides itself on being a country that endorses free trade not only for itself but from other countries as well; this would be contradictory if the ban on export of oil is not lifted. It would also lead to the loss of power for the OPEC making it difficult for them to push the market around.

Presently, there are no reports of the Congress passing any bills to lift the ban on exports, but most analysts predict it will happen in the coming year.

Against export of oil:

Getting this bill passed is not going to be an easy task. Firstly, there are the gas rates, thanks to the oil boom; the surplus of oil has resulted in motorists paying around 10 cents a gallon, which is lower than the normal rate. Some have argued that if more oil comes from America, it reduces the need to keep a heavy military presence in the Middle East. Given that most of their oil goes to Asia and its neighbors.

Environmentalists on the other hand are dead set against lifting the ban on exports. They stress that most of this new oil comes with a destructive blow to the environment, fracking (Hydraulic Fracturing) raises the ground water levels, oil sands crude tales a lot of energy to produce and deep water drilling can lead to gigantic spills. The impact of which would be irreversible for the environment. Permitting exports would create a higher demand which would encourage more drilling. They plead for a sustainable approach with a restricted reliance on oil, or we won’t be able to face the inevitable and catastrophic climate change.

 

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