The United States government placed a ban on the export of domestic crude oil to other countries in the 1970s, mainly due to the fear of Americans that there was a lack of domestic energy resources. There is a heightened controversy in recent months over the movement to lift the ban on the exportation of U.S. oil – it is a topic of great discussion. Politicians, media, and experts in the field of oil extraction and production have made valid points as to the potential costs, benefits, pros, and cons of lifting the ban of exporting oil.
History of United States Crude Oil Production
The U.S. has increased its production of crude oil immensely in recent years. According to an editorial published by the Washington Post, crude oil production in the United States has grown by a staggering 70% since the year 2008. The article goes on to cite the fact that America is known for having some of the most advanced oil refineries in the world. The advancement of new technologies and processes has allowed for access to previously inaccessible reserves. As a result, U.S. oil production has risen to the tune of millions of barrels per day. This boom in domestic oil production is a key factor in the recent drop in oil prices throughout the United States.
The Oil Export Ban of the 1970s
The ban placed on the export of oil took place in the 1970s, and can be mainly attributed to the scare of a lack of supply of crude oil in the United States. Within this decade, a series of laws were passed to relieve fears of energy resource scarcity. Domestic production of crude oil was declining overall, and rumored to be low compared to foreign nations. The laws were also aimed to prevent American oil producers from evading U.S. price controls by selling their crude oil to foreign countries at higher prices.
Lifting the Ban on Exporting U.S. Oil
With these facts at hand, politicians and government officials are debating whether lifting the ban placed on exporting U.S. crude oil to other areas of the world would prove beneficial to the nation. Removing the ban on U.S. oil exports is highly debatable, and the change in legislation could impact many factors involved with both U.S. and foreign oil and energy markets.
Allowing for the export of U.S. crude oil could positively or negatively affect the price of gasoline for consumers, have an impact on domestic refineries, incur economic repercussions both nationally and globally, as well as influence the trade deficit or surplus involved with the global production and trade of domestic oil. There are also environmental impacts associated with an increase in the drilling and production of oil.
Arguments For Allowing Exports of U.S. Crude Oil
The ban on the export of U.S. crude oil of the 1970s that made many Americans fear a shortage of domestic oil supply has come full circle, so to speak. New technology and advances in the production of oil has completely flipped the scales. The United States is now one of the top world’s producers of oil. The states of Texas and North Dakota are some of the highest producing regions in the U.S., let alone the world.
One of the stronger points to be made regarding the exportation of U.S. oil is the fact that the American consumer will see a price drop in gasoline. The decrease in price of gasoline due to exporting oil to foreign nations is not absolutely predictable, but even critics admit that there will be a decrease in price.
Arguments Against Allowing Exports of U.S. Crude Oil
One argument that opposes lifting the existing ban on exporting domestic oil includes the possibility of negative environmental factors. Environmentalists oppose the export of U.S. oil, in part, due to the probable increased incentive for energy companies worldwide to drill more oil.
Environmentalists often insist that policymakers should regulate environmental responsibility to energy companies. Many people believe that companies involved with the crude oil and energy markets conduct operations that are not environmentally responsible or “rational”.
Some say the solution for negligible acts involved in the oil markets is taxing companies based upon the damage they impose on the environment. The standards for drilling and refining oil are not globally mandated, and damage to the environment incurred by doing so is arguably difficult to measure.
It should be noted that many countries and regions have economies that are almost completely dependent on their production of oil.
Tech-Flo: Oil Field Consulting
Tech-Flo is headquartered in Conroe, Texas, and is a reputable worldwide provider of hydraulic lift and system associated equipment. With world-renowned production equipment for oil, such as multiplex pump packages and hole completion production equipment that began with our successful hydraulic lifting products catering to the oil industry, we pride ourselves in providing the most advanced products. All of our experts in the field have had extensive backgrounds with specific knowledge in the oil industry. We attend to our clients’ diverse needs around the globe.