The recent budget bill makes it legal to export crude oil. This just makes it easier to do what they've already been doing.
US Crude Oil Export Ban Lifts, Could Hit US Oil Industry, by Tina Casey, 12/24/15
The lifting of a decades-old ban on crude oil exports primes Corpus Christi to become a key oil hub in the coming years, but it also dampens interest in expensive projects to export condensate, an ultralight oil not subject to the long-standing restriction.
As Meyers explains, US oil producers have been ramping up their interest in condensate as a way to get around the now-defunct export ban. The problem is that when you factor in stabilizers — the infrastructure needed to process condensate — it’s a lot more expensive than simply loading crude onto a ship.
While there is a law that bans U.S. crude oil exports, corporations skirt the law by slightly processing the oil and exporting it. Because of the oil shocks in the 70s that led to high inflation in the first case (1973) and long gas lines in the second case (1979), after the first President Gerald Ford banned the U.S. export of crude oil on Dec. 22, 1975 -- there are significant exceptions, but the law allows oil to be processed into products like gasoline and exported.
Brilliant! Gasoline crises prompt a law banning the export of oil, but the law allows that oil to be processed into gasoline and other products and then exported. One could not ask for a clearer example of the United States under corporate rule.
This makes it clear: Companies 'work around' U.S. oil export ban June 25, 2014.
Companies and federal officials are finding a way around a 1970s-era U.S. ban on crude oil exports by slightly processing some of the rising amounts of oil extracted from the nation's shale deposits.
Texas-based Pioneer Natural Resources said Wednesday that the U.S. Department of Commerce has approved its plan to export an ultralight oil known as condensate produced in the state's Eagle Ford Shale. In processing the oil, Pioneer runs it through a distillation unit that lowers vapor pressure and removes volatile lighter hydrocarbons.
Exactly, federal officials are in the pocket of oil corporations. Surprise, surprise.
I was unaware of this law until late last month. Who'd guess that, with petroleum-based exports increasing so rapidly, there's a law banning some crude oil exports?
Under the guise of helping allies, there are now calls to eliminate any export bans in place. This is a bad idea for the planet and for U.S. consumers.
One person commented on a website regarding my contention that oil corporations are manipulating the supply of oil in the U.S. to keep gas prices high and that they are plundering U.S. resources for private gain:
Oil is a global commodity, period. It's about supply and demand, period. The more oil that is available to the world, the cheaper a barrel of oil becomes. The less oil that is available to the world, the more expensive a barrel of oil becomes.
Now who is it that is attempting to limit the total amount of oil available, Obama or the big oil companies?
It's not true that "Oil is a global commodity, period." There's no "period."
Seriously, what part of the *fact* "U.S. oil exports up and imports down" don't you understand? Oil may be a global commodity, but oil corporations are manipulating the market to reduce the amount available in the U.S. to keep gas prices and profits high. That's why idle refinery capacity is up.
So who is limiting the amount of oil available in the U.S.? INTERNATIONAL OIL CORPORATIONS, that's who.
Given oil exports manipulated up and imports manipulated down, you must disabuse yourself of *any* notion that oil drilling in the U.S. is for the U.S. So, yes, it is obviously for the world market. Plunder U.S. resources for private gain and to hell with the national interest.
To hell with life on planet earth ... after all, the global "free market" is God Almighty for "conservatives" ... the national interest matters? ... don't be silly. And to boot, the U.S. government subsidizes the corporate plunder of U.S. resources. Insane!
If it's in the oil corporations' overall interest in higher profits to keep gas prices high -- billions in profit to be gained by doing that -- and export U.S. oil to sell on the international market at prices driven up by speculation, that's exactly what they'll do.
The data per the U.S Energy Information Administration: In 2013, about 134.51 billion gallons (or 3.20 billion barrels) of gasoline were consumed in the United States. So an extra $1 per gallon added profit is worth $134B. Worth manipulation? You bet!
|Petroleum Exports soared and Imports fell, taking oil off the U.S. domestic market to artificially restrict supply in the U.S. Note: I need to correct this graph, The y-axis is labeled correctly, but the text within the graph should show M(illions), not B(illions) |
An edited version of this article, without graphs, was published in the Colorado Springs Business Journal on 1/4/13: Reality about oil imports, exports might surprise you.
Update 4/26/14 ... and exporting continues:
Gasoline Prices Rise As U.S. Refineries Send More Fuel Overseas by MARILYN GEEWAX, April 25, 2014
- This article in pdf doc formats. (If pdf doesn't download at first, hit retry.)
- Letter to City Council & Mayor (pdf): Points out plans to also export natural gas.
Earlier articles related to this topic on this site are: Petroleum Prevarication 5/10/08 and Oil Drilling Deception 4/21/11 on the deceptions of Rep. Doug Lamborn (R).
Here's the point: U.S. oil imports have been steadily decreasing from 2005 through 2011, with U.S. exports steadily increasing by lots more. Current-trend projections show the U.S. will be a net oil exporter by around 2017. Incredible.
That's got to be a shock for those who chant "Drill, Baby, Drill" and "Drill Here, Drill Now", thinking that increased U.S. production will be used here to reduce gas prices.
Concern about high gas prices is expressed in a Gazette "Our View" column, "Wish them well as they begin to drill" published 2/21/12. It states "... gasoline prices are soaring and threatening to reach record highs of $4.25 a gallon in April on the heels of President Barack Obama's refusal to allow a major oil pipeline from Canada through the United States." Wayne Laugesen, editorial page editor, worries that "high gas prices could wipe out the slow and delicate recovery" ... even as he admits that "it would be a gargantuan stretch to suggest that successful oil production in El Paso County could lower fuel prices."
Nevertheless, he argues drilling shouldn't be opposed -- get this -- because "Americans, including those along the Front Range of Colorado, need to accept oil and gas exploration and production as a patriotic duty." He writes, we can't "afford to say 'not in my backyard'."
Mr. Laugesen relates higher gas prices to that pipeline, but that has nothing to do with it. The graph shows that as the U.S. imported 433M barrels less in 2011 than in 2005, it exported 642M barrels more. Yes, that's correct. Oil corporations are exporting more oil, while importing less. Is that patriotic?
Mr. Laugesen stated, "Our entire economy depends upon a steady and abundant supply of oil, and it will for generations to come." But does exporting more U.S. oil create "steady and abundant supply" or reduce gas prices? Obviously not.
|Petroleum Idle Distillation Capacity, a rising trend since 2004 with 2nd order polynomial least-square fit.|
Data is from census.gov/foreign-trade/statistics/historical/ and from eia.gov, the U.S. Energy Information Administration.]
Plus, oil corporations exported more gasoline, diesel and other fuels than were imported in 2011 according to the Energy Department.
Does Wayne Laugesen know these facts? Or does he ignore them for ideological reasons?
Why is this happening? Follow the money. These practices by the oil oligopoly create U.S. oil scarcity. This market manipulation drives up gas prices AND sells more oil on international markets at prices driven up by speculation. Result: increased profits.
Very clever: plunder U.S. resources for profit, impose a "gas tax"-like burden on Americans, and fundamentally undermine the U.S. economy. Remember, once oil corporations have those oil leases, it's their oil, not "our oil", and they do with it as they like. Their duty is increased profits; not patriotism.
Some may argue, "Well, the U.S. just doesn't have the refinery capacity because of those damn environmentalists." But that ignores that Idle Refinery Capacity increased from 30.3M barrels/year in 2004 to 261M in 2011. Add to this that U.S. Operating Crude Oil Distillation Capacity in 2011 was 700 M barrels/yr less than the steadily-increasing trend from 1992 through 2004 would predict. Want to guess why oil corporations want TransCanada's Keystone XL Pipeline? To use that idle capacity for more exports.
|Petroleum Operating Distillation Capacity has fallen well below the trend set from1992 through 2004 with 2nd order polynomial least-square fit.|
1. Fracking uses significant amounts of water while a developer-subsidy Southern Delivery System is built at Colorado Springs Utilities ratepayer expense. Note that's instead of making the expense explicit as a tax (which I wager would never be approved by voters).
2. Fracking pollutes and it's no accident that the federal Energy Policy Act of 2005 contains the "Halliburton Loophole," an exemption for gas drilling and extraction from requirements of the Safe Drinking Water Act. There are also exemptions in the Clean Air Act and Clean Water Act. Experience across the U.S. shows fracking pollutes; and that's just really OK according to U.S. law.
3. Exporting so much oil, depriving the U.S. of these resource in the future, is a national security concern. We'll someday need that oil.
4. Earthquakes and subsidence? There are coal mines beneath my home.
5. Global warming is real; our burning of hydrocarbons is causing it. Face that and the fact that the amount of carbon already contained in proven coal and oil and gas reserves, fossil fuel currently planned to be burned, is five times greater than the amount projected to cause a two degree rise in planetary temperature. As Naomi Klein, writing a book on the climate crisis, states: "... these numbers make clear that with the fossil-fuel industry, wrecking the planet is their business model. It's what they do." The result: more vicious wild fires and increased coastal flooding. I've no doubt that billions will die in this century, if this is allowed to happen.
Fracking, given the risks and the draining of U.S. resources, is simply crazy. It must stop. Colorado Springs City Council and the mayor should do all they can to stop it and promote renewable energy.
|Petroleum Export/Import Projections including 10 months of 2012 annualized, lines cross in 2016 with 2nd order polynomial least-square fit.|
Bob Powell, Ph.D. physics, MBA, is a consultant using the lens of systems thinking to understand organizational, economic, and social issues.
|Petroleum Export/Import Projections not including 2012, lines cross in 2018 with 2nd order polynomial least-square fit.|