Despite price drops for both oil and natural gas, drillers continue working in the Marcellus and Utica shale formations.
WHEELING, W.Va. — Both Democratic and Republican senators believe they have an agreement in place to lift a ban on oil exports, in the interest of both economic development and national security.
The federal government’s ban on exporting oil dates to the 1970s, an era when gasoline shortages – caused by OPEC imposing an embargo on oil sales to the U.S. – led to skyrocketing prices and long lines at service stations.
Even as the price for a barrel of crude oil fell from about $106 to roughly $36 during the last 18 months, Ohio shale drillers more than doubled their production in the same time period by pumping 15.7 million barrels in the first nine months of this year. Moreover, thanks to U.S. shale production from formations such as the Marcellus and Utica, the nation now produces about 9.4 million barrels worth of crude oil and lease condensate per day, up from just 5.6 million daily barrels in 2011, U.S. Energy Information Administration figures show.
“Reversing the ban on oil exports will improve our national security interests by reducing our trade deficits, neutralizing countries like Iran that extract the same types of oil as the U.S., expanding our competitive edge in a global marketplace and providing a stable source of energy to our allies so that they will no longer be dependent on undemocratic regimes,” Sen. Joe Manchin, D-W.Va., said. “I am very encouraged that this deal will bring us one step closer to achieving energy independence and an all-of-the-above domestic energy approach.”
Manchin said in his role as a member of the Senate Energy and Natural Resources Committee, he worked with Sens. Heidi Heitkamp, D-N.D, and Lisa Murkowski, R-Alaska, to achieve a deal to allow crude oil exports. Senators began negotiating the deal over the summer when the price for a barrel of oil on the New York Mercantile Exchange was roughly $58. As the price kept dropping, Heitkamp’s state, filled with Bakken Shale oil, suffered some economic declines.
“This deal to lift the 40-year-old ban on exporting oil is a huge win for North Dakota, and it reinforces the importance of good-faith, bipartisan negotiations and legislating,” Heitkamp said.
Heitkamp said the deal would also include a five-year extension of the Solar Investment Tax Credit in hopes of convincing more Democrats to vote in favor of the measure. The legislation would also give the president authority to impose certain restrictions on oil exports if there is a specific reason for doing so.
Ashley Berrang, spokeswoman for Sen. Shelley Moore Capito, R-W.Va., said the senator supports lifting the ban on crude exports. However, she said Capito still needs to review the full package of legislation under consideration before committing to a vote on this particular deal.
“I have consistently been a proponent of increasing our nation’s access to foreign markets, as American exports have generated substantial economic growth and supported good-paying jobs at home,” Sen. Rob Portman, R-Ohio, said. “Trade and investment are particularly important for Ohio, as Ohio is the seventh-largest exporting state with over $52 billion in exports in 2014.”
Officials in the office of Sen. Sherrod Brown, D-Ohio, could not be reached for comment.
Now, the Washington, D.C.-based American Petroleum Institute is asking the House of Representatives to pass a version of the legislation.
“According to various studies, lifting the ban would create 1 million jobs at its peak in 2018, and add $38 billion to our economy, and lower our trade deficit by $22 billion and our federal budget deficit by $1.4 billion in the coming years,” API President and CEO Jack Gerard wrote in a Wednesday letter addressed to Speaker of the House Paul Ryan, R-Wis., and House Minority Leader Nancy Pelosi, D-Calif.
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