US lifts ban on crude oil exports

The Jefferson Energy Terminal at the Port of Beaumont

President Barack Obama signed a $1.1 trillion spending bill Friday, Dec. 18, that lifts a nearly 40-year-old ban on crude oil exports.

“This is a historic day, and one that is long overdue,” said Dan K. Eberhart, CEO of Canary, LLC, one of the largest private oil field service companies in the country. “I applaud our lawmakers for their dedication in staying the political course and finally lifting this ban. I’m eager to see the benefits unfold from this policy change.”

The oil export ban was first enacted Dec. 22, 1975, by President Gerald Ford in response to the infamous Arab oil embargo of 1973. The decision by the members of the Organization of Arab Petroleum Exporting Countries, in addition to Egypt and Syria, to cut off their oil exports to the United States sent gas prices soaring.

According to Eberhart, the export ban might have been the right move then, but it is not the right move now.

“The energy landscape in this country is vastly different than it was in the mid-’70s,” Eberhart said. “Energy production in the United States is on track to outpace our own domestic needs, and we may not even need to import any oil by the 2030s.”

He added that lifting the ban is not just a boon for the energy industry; it’s good news for all Americans.

“This represents a gesture of international goodwill by our country and demonstrates our clear commitment to free and fair trade,” Eberhart said. “This puts us in a strong position to counter foreign nations’ aggression toward our allies because we are now able to present ourselves as an alternate and reliable supplier of crude.”

The policy change will also affect national security.

“We now have the ability, at our discretion, to curtail, increase or even put a temporary hold on our country’s crude exports. This means that if we, our allies or any neutral nation are in trouble, we have a domestic energy surplus to depend on and leverage in our favor or on behalf of other nations,” explained Eberhart. “In terms of our security at home and that of our friends overseas, that’s a game changer.”

U.S. Rep Brian Babin (TX-36) said, “Lifting this outdated and unnecessary ban on crude oil exports is a win for Texas and America. It opens up billions of dollars of new economic opportunity for American companies, which will create thousands of good paying jobs. It will help to stabilize the price of energy on the world market, making sure that gasoline and electricity remain abundant and affordable for hardworking families across America. And Southeast Texas is uniquely positioned to be at the center of it all, with the Port of Houston and other facilities in our area uniquely suited to lead America into this new market.”

The Jefferson Energy Terminal at the Port of Beaumont has been preparing for the possibility that Congress would lift the ban, said Mark Viator, director of Government Affairs and Special Projects for Jefferson Energy Companies.

“One of the key attributes of the Jefferson Energy Terminal is our deep-water ship loading capacity,” Viator said. “To date, all of our marine loadings have been on inland barges; however, we are working on several future projects involving loading and offloading ships, and the loaded cargoes would likely be exported.”

Viator said he believes that the change in law regarding crude oil exports will increase the demand for export capacity and that Jefferson Energy Companies has kept this factor in mind.

“We are in discussions with several parties about loading rail cars for export of finished products to Mexico in conjunction with the ongoing deregulation,” Viator said.

Of course, not everyone is happy about the ban on crude exports being lifted.

Friends of the Earth, a non-governmental environmental organization headquartered in Washington, D.C., said lifting the ban is a leap in the wrong direction.

“This is a deal that puts more money in Big Oil’s pocket and more carbon in the atmosphere,” the environmental advocacy group said on DeSmog Blog.

The same spending bill that lifted the ban on crude oil exports also strengthened cyber-security programs, renewed the health care program for Sept. 11 responders and made changes to the visa waiver program.