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U.S. lifts 40 year-old oil export ban.

December 30, 2015

On December 22, 1975, to stifle the impact of future oil embargos by foreign oil producing countries, President Gerald R. Ford signed the Energy Policy and Conservation Act (EPCA). Ford signed the bill after the 1973 Arab oil embargo shook the U.S. with high world oil prices. The law required the president to ban crude oil exports to nations other than Canada. The point of EPCA was to insulate the U.S. from volatile and sometimes unpredictable global crude markets.

Forty years later, on December 18, 2015, the U.S. Congress passed and President Barack Obama signed into law a $1.8 trillion government spending and tax relief bill that included repealing the four-decade-old oil export ban, according to a Reuters report. The Department of Commerce has issued an official notice saying companies no longer need to apply for licenses to export crude.

Leading oil and gas industry associations immediately expressed their approval. “This is a historic moment in our energy renaissance,” American Petroleum Institute Pres. Jack N. Gerard said. “Lifting this ban will help put downward pressure on gas prices, create jobs, grow our economy and lower our trade deficit” according to an Oil & Gas Journal report.

“The US is producing more energy than ever before, with production at its highest levels in decades,” Independent Petroleum Association of America Pres. Barry Russell observed. “The ability to export surplus US crude oil is a much needed shot in the arm for America’s producers and the economy, and will generate significant savings for American families and consumers.”

The bill won crucial support from several Democrats because it also would revive expired tax credits for alternative energy sources ranging from wind and solar to biodiesel.

In the coming weeks, companies are likely to “stress test” where export opportunities will be, said George Baker, executive director of the Producers for American Crude Oil Exports, which led the successful lobbying effort in Washington to lift the ban.

Pressure from oil producers to scrap the restrictions intensified over recent years, as U.S. crude oil prices plunged to as much as $25 a barrel below global prices due to a build-up of swelling U.S. shale production caused by infrastructure bottlenecks as well as the export ban.

What this means to you
On December 18, 2015 the United States lifted a 40 year-old oil export ban. The repeal of the ban provides a much needed shot in the arm for America’s producers and significant savings for American families and consumers.

MIRATECH can help
Contact MIRATECH to learn about engine emission reduction solutions in oil, gas and marine applications.