Last week, Congress passed an omnibus spending bill containing a provision that lifted the ban on crude oil exports, signaling a new era of U.S. energy policy. Advocated by members of both political parties, the core of their argument rested on the countless benefits the repeal will bring to the nation’s economy and national security.
Now as we move into the New Year, the unanswered question towards crude oil exports lingers: What’s next?
For decades, OPEC has been dominating the world’s oil market through its overarching influence on the price of oil. But now that the U.S. has lifted its ban on domestic crude, OPEC and other energy-producing nations must take into consideration the actions of American energy producers. During a radio interview, Speaker Paul Ryan (R-Wisconsin) gave his opinion on the outcome of the omnibus bill, specifically highlighting the advantage U.S. crude oil exports will bring to our allies:
“By lifting the ban permanently, we can cut off Putin, we can help give Europe another source of oil, we can displace OPEC from dictating the terms of the international oil markets, we can displace Venezuela, we can create up to a million new jobs in America.”
U.S. crude oil exports will bring an alternative source of energy to the global market, releasing our allies in Europe and Asia from unstable suppliers. It will also allow American consumers to benefit from the global price of oil that is set by the international wholesale market.
Companies across the U.S. will also benefit from the opening of new markets as logistics to export American crude becomes a manageable reality. There is already an “extensive network of oil pipelines and storage tanks” along the Gulf Coast of Texas and Louisiana due to imports (The Wall Street Journal, 12/16/15, “Congressional Leaders Agree to Lift 40-Year Ban on Oil Exports.”) The transformation of import terminals to handle exports will also be relatively smooth since the permitting process is efficient in pro-energy states.
As we ring in 2016, the U.S. will be gearing up to export crude oil, signaling to the rest of the world that it’s finally taking its place as a leader in energy.