Why US will lift restrictions on oil exports

Since Congress and the President agreed last week to lift the ban on oil exports the government's energy forecasting arm decided on Monday to highlight a recent analysis it did on the topic.

Just 17 months ago, with benchmark Brent and West Texas Intermediate oil prices hovering above $100 per barrel, the argument received far less focus comparatively outside of energy conferences and policy wonks. "However, the advantages could be much larger in a couple years' time as the United States resumes growing production".

Pelosi fought hard against the repeal, according to a New York Times report, and the issue nearly unraveled the deal. Many Democrats opposed the notion due to environmental concerns and worries a repeal would hurt refineries in the Northeast.

The hope for many Texans is that doing away with a crude oil export ban will stabilize oil prices. Lifting the ban will finally allow American energy producers to compete on a level playing field in the worldwide marketplace.

The bulk of United States oil comes from shale producers.

The ban on US oil exports was seen as a way to put the country on "the road to energy independence", as President Ford said when he signed the Energy Policy and Conservation Act.

Allowing oil exports would be a win for the US oil industry and Republicans, who had argued that the ban was a relic of the 1970s Arab oil embargo.

The bipartisan legislation, which provides 1.15 trillion US dollars in government spending and 680 billion dollars in tax breaks, now goes to President Barack Obama's desk for his signature. "We have a ban, we can't export, and we are the only producing country in the world that cannot export".

US drillers dropped 17 gas rigs but added 17 oil rigs last week, sending the USA rig count down to 871 rigs compared to 2,266 rigs a year ago, according to Baker Hughes.

And Rep. Nita Lowey, of NY, the top Democrat on the Appropriations Committee, said the crude oil provision "leaves a sour taste about this package".

"I am deeply concerned about the impact of lifting the oil export ban on our independent oil refiners, who employ thousands of hardworking, middle class Americans", he said.

John Waters, executive director of the Carlsbad Department of Development, said that if the spending bill was passed and the export ban was lifted then it would mean huge things for the economy in Eddy County.

And because USA crude is now cheaper than worldwide crude, the Council on Foreign Relations points out "there is currently little if any incentive for US oil producers to export crude oil even if the ban is lifted". The agreement announced Wednesday includes give and take among both parties, as Republicans get the export ban repeal they've longed for and Democrats get extensions on wind and solar credits, in short.