Oil Export Ban May Hurt Economy

Oil Export Bans
Oil Export Bans

U.S. crude production reached record levels in 2014 and the growing surplus has many questioning why a 40 year-old oil export ban is still on the books.

The export ban on all petroleum products was imposed during the 1970s as a way for the government to control prices during a time of scarcity. But times have changed and since 2008, U.S. crude oil output has increase by 81%. This record production is beginning to overtake the industry's ability to economically process these growing volumes and producers and analysts are raising their voices to advocate for a repeal on the anachronistic law.

Related:Continental Resources CEO Pushing for Lift of Export Ban

Reporting to the Senate Committee on Energy and Natural Resources, IHS Vice President, Ambassador Carlos Pascual testified “The conditions that justified the crude oil export ban in 1973 no longer apply. More importantly, continuation of this ban hurts American consumers, causes an unnecessary drag on American productivity, and does not let the United States exploit fully the national security benefits from our energy resurgence.

Earlier this month, IHS issued a report on the implications of the current ban and concluded that lifting the export ban could create hundreds of thousands of additional U.S. jobs and add billions to the U.S. economy.

Related: Oil Export Ban Is Hurting Your Royalty Checks!

The report goes on to say that eliminating the ban will have far-reaching consequences for the U.S. economy including:

  • Further increases in domestic oil production
  • Lower gasoline prices
  • 964,000 additional jobs
  • Benefits to manufacturing and service-related sectors in every state
  • Strengthening national security and America’s position in the world

Read more at ihs.comPhoto: © Hramovnick

Oil & Gas Industry Focused on Innovation - Deloitte Oil & Gas Conference

Deloitte - Technically Recoverable Tight Oil
Deloitte - Technically Recoverable Tight Oil

Several key leaders from across the industry shared their optimism at the annual Deloitte Oil & Gas Conference on November 16th.

The conference agenda covers the global oil & gas industry, but US shale plays dominated the conference. Many of the speakers reiterated that we're no longer in a "shale revolution", but a renaissance that will last for years to come.

The industry is focused on innovation. New technologies are needed to address challenges presented in shale development. Whether it is lowering operating costs or utilizing currently flared gas through a gas-to-liquids (GTL) process, the industry sees room for growth.

A few key points and statistics we noted while at the conference:

  • Oil production has grown to 1980s levels
  • 15% of technically recoverable shale gas and 17% of technically recoverable shale oil resources globally are located in the US
  • The US will pass Russia as leading O&G producer this year; will pass Saudi Arabia next year
  • Shale has increased our current trade balance by $200 million/yr and is predicted to give us oil independence by 2020
  • US has increasing geopolitical influence in critical regions due to growing oil & gas production
  • The oil export ban needs reform. Otherwise, refinery changes are needed and we will consume more expensive crude.
  • Operators are focused on cutting costs to increase valuations
  • According to Maynard Holt, "we may be in the 8th inning of the shale game, but we're in the 3rd inning of the completion/cocktail game"
  • Since 2008, foreign firms have invested over $100 billion in US unconventional assets
  • Over that period, Chinese companies have spent $44 billion to acquire N. America based energy firms and assets
  • Gas-to-liquids technology is becoming more and more attractive with current oil and gas prices
  • Skip Horvath, Natural Gas Supply Association predicts that natural gas will hit $6.00 by 2020, "assuming Washington leaves us alone over the next few years."

"This boom isn't just for a few years. We believe the shale revolution really has staying power" -Ryan Lance, ConocoPhillips CEO

About the Deloitte Oil & Gas Conference

The Deloitte Oil & Gas Conference is an annual conference for oil and gas executives and leading industry experts to share their views on important issues facing the global oil and gas industry. The objective of this conference is to provide a forum for executives and managers from companies in all sectors of the oil and gas industry, commercial and investment bankers, industry analysts, service providers to the oil and gas industry, representatives of government agencies, trade groups and policy planners, to understand emerging issues.