Late last year the president finally said #Yes2Energy and signed into law a provision lifting the 40-year-old ban on crude oil exports. Lifting the ban was a priority for the Energy and Commerce Committee and the House passed legislation, H.R. 702, authored by Chairman Emeritus Joe Barton (R-TX), and H.R. 8, the North American Energy Security and Infrastructure Act, which contained provisions lifting the ban. House Republicans’ commitment to lifting the ban paid off and the first two tankers shipping American liquid freedom have left Texas ports and begun their journey to our allies in Europe.
A Wall Street Journal article notes that this is just the beginning, “The first oil sales abroad are flowing to Europe but, in the longer term, Latin America and Asia could become natural markets, according to industry experts." Long-term, increased U.S. oil exports will lead to more jobs, increased pipeline infrastructure, and more refineries throughout the country.
U.S. Exports First Freely Traded Oil in 40 Years
Energy companies race to ship abroad after ban is lifted
The ink is barely dry on legislation to lift a 40-year-old ban on exporting U.S. crude and energy companies already are jockeying to ship American oil overseas.
Two tankers filled with freely traded U.S. oil have pulled out of Texas ports in the past two weeks, with more shipments expected. The first American oil sales abroad are flowing to Europe but, in the longer term, Latin America and Asia could become natural markets, according to industry experts.
U.S. oil sales to foreign buyers have been quick to start after President Barack Obama signed the bill that abolished the crude export ban less than a month ago. Big energy infrastructure companies including Plains All American Pipeline LP and Enterprise Product Partners LP have spent the past five years pouring billions of dollars into building new pipelines, oil storage tanks and dock space at ports.
The first freely traded cargo of U.S. oil was shipped from Corpus Christi, Texas, on New Year’s Eve. ConocoPhillips pumped the oil from around Karnes County, Texas, 60 miles south of San Antonio. From there it will travel about 5,000 miles to Bavaria in Germany.
A second cargo of U.S. oil shipped from Enterprise’s Houston terminal at the start of the year is sailing to Marseilles, France. From there it will move by pipeline to a refinery in Switzerland. …
The oil being shipped abroad is light, sweet crude, which is pricier than the heavy crude U.S. refiners are equipped to process, noted Skip York, vice president of integrated energy at Wood Mackenzie. “The barrels leaving U.S. are a better fit for other refiners" around the world, he said.
Ryan Lance, chief executive of ConocoPhillips, expects the global oil glut to diminish in the next year or two as low crude prices spur demand for fuel.
As demand rises enough to push crude prices higher, Mr. Lance predicts that foreign buyers may come to rely on the U.S. to export as much as two million barrels of oil every day within the next five years. …
As with most new markets, the flow of American oil abroad is expected to start with a trickle and then steadily rise. The current price of foreign crude isn’t much higher than what a barrel of U.S. oil can fetch, making a tanker ride across an ocean look expensive to many buyers, experts said. …
Read the article online HERE.
