Home' Trinidad and Tobago Guardian : January 8th 2014 Contents NEW YORK---American oil compa-
nies have not been allowed to export
crude for 40 years, but the industry
wants to change that, even though the
US still consumes far more oil than it
A surprising surge in domestic pro-
duction of light, sweet crude---a par-
ticular type of oil that foreign refiners
covet---has triggered growing calls to lift
the restrictions, which were put in place
after the Arab oil embargo of 1973.
But the idea is touching a nerve that
remains raw four decades after oil short-
ages crippled the economy and led to
the law that banned crude exports with-
out a special license.
"For 40 years, energy policy has been
shaped by that experience of the 1970s,"
says Daniel Yergin, energy historian,
author and vice chairman of the research
and analysis firm IHS. "But we are in
a different world. Neither our logistics
nor our thinking has caught up with
the dramatic changes in North Amer-
Skeptics worry that lifting the restric-
tions would lead to higher gasoline prices
and decreased energy security. Econo-
mists and analysts argue that it would
have little or no effect on prices, largely
because the US already exports record
amounts of gasoline and diesel, which
are not restricted.
Some experts say allowing crude
exports could actually improve energy
security by encouraging more domestic
Major oil companies such as Exxon
Mobil and ConocoPhillips, along with
the American Petroleum Institute, an
oil and gas lobbying group, are the
biggest proponents of ending the ban.
Alaska Sen. Lisa Murkowski yesterday
released a paper on energy exports
describing the nation s export laws as
"antiquated" and urging President
Barack Obama and the Senate to allow
crude exports. Late last year, Energy
Secretary Ernest Moniz suggested at an
industry gathering that it may be time
to revisit export laws.
But easing the restrictions will be
politically difficult, especially in an elec-
tion year. In a recent letter to Obama,
New Jersey Sen. Robert Menendez made
an argument that is likely to resonate
with voters: "Crude oil that is produced
in the US should be used to lower prices
here at home, not sent to the other side
of the world."
Environmental groups have worries,
too, mainly that by allowing US com-
panies to export crude to get higher
prices, producers will be able to afford
to go after oil deposits that require more
elaborate, more environmentally dam-
That the nation is talking about
exporting oil at all is a result of a huge
turnaround in domestic production in
states such as North Dakota and Texas.
The US is producing more crude oil than
it has in 25 years, and the government
predicts production will approach its
1970 peak of 9.6 million barrels per day
That s still not nearly as much as we
consume. The US still imports an average
of 7.5 million barrels of crude every day,
more than any other country but China.
The issue is that refineries around the
world have spent billions of dollars to
gear up to process specific types of crude
oil they expected to receive. But a boom
in US production put the global refinery
system "out of whack," Yergin says.
In the US, refiners expected to import
more crude from Venezuela and the
Middle East, a relatively thick oil that
is high in sulfur and known as heavy,
sour crude. Many refineries abroad can
more easily handle light, sweet crude,
which is thinner, lower in sulfur and
easier to refine into gasoline and diesel.
But in a surprise, US drillers are pro-
ducing so much light, sweet crude that
US refiners can t use it fast enough, and
a relative glut has emerged. US oil prices
are lower than global oil prices by US$10
per barrel or more. Foreign refiners would
be willing to pay full price for that crude
if US producers were allowed to sell it.
Wednesday, January 8, 2014 www.guardian.co.tt Guardian
US oil companies call
for end to export ban
Mathew Martoma, centre, arrives for jury selection for his trial at federal court, yesterday, in New York.
Martoma is charged with persuading a medical professor to leak secret data from an Alzheimer's disease
trial between 2006 and 2008, while Martoma worked at SAC Capital Advisors, the hedge fund company
founded by billionaire Steven A Cohen. Prosecutors say the information enabled other investment
professionals at SAC to earn a quarter-billion dollars illegally. AP PHOTO
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