Congress Considering Lifting Oil Export Ban
A couple of weeks ago, the Senate Energy and Natural Resources Committee approved legislation, The Offshore Production and Energizing National Security Act (OPENS Act), which would lift the oil exports ban that has been in place for 40 years running. The House of Representatives is expected to vote on the bill as early as September and pass it to the Senate for a vote early next year. Supporters of the move, which passed on a party line vote of 12 to 10, assert that lifting the ban will transform the U.S. into an energy superpower and benefit the industry and consumers alike.
What’s at Stake?
The bill addresses two key areas that would help move the U.S. oil and gas industry into the 21st century. The firstis allowing the U.S. to export crude oil and compete with other suppliers, such as Iran and Russia, on a global scale. The second is expanding energy development to areas that are currently closed off in the Gulf of Mexico, the Arctic and the Atlantic Ocean. As it stands, roughly 87 percent of the nation’s outer continental shelf is off limits to oil and gas exploration. Also up for a vote is the Energy Policy Modernization Act of 2015, which includes requirements for the Department of Energy to rule within 45 days on applications to export liquefied natural gas (LNG) to non-free trade agreement countries, expediting the process considerably.
Who Benefits From Lifting the Oil Export Ban?
The export ban is the product of the 1970s oil crisis. Intended to shield the U.S. from volatile world markets after the Arab oil embargo, the ban instead drove up gas prices, decreased American oil production and made the country more dependent on foreign oil. The Brookings Institute and other experts hold that allowing U.S. crude exports and opening up previously closed off areas to exploration will have a widespread positive impact on our job market, GDP, and trade deficit as well as drive down the prices of gasoline and other petroleum products. Additionally, the U.S. can leverage its oil exports with regard to international relations, considering the fact that Russia and, soon, Iran have no such commercial sanctions on selling oil on the world market.
John Henry Petroleum: At the Forefront of Oil and Gas Exploration
A renaissance in U.S. oil production is in the works, largely due to increased demand and advanced technologies, and reversing the ban on crude oil exports can help the oil industry, investors and consumers reap the benefits. For the latest developments in American oil and gas policy, follow us on Twitter, or contact us today to learn about how you can benefit as an investor.