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    CRUDE FLIP-FLOP: Biden’s Energy Sec Now Open To Oil Ban, But Will It Actually Lower Gas Prices?

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    By Thomas Catenacci

    • The Biden administration appeared to reverse its previous position that it wouldn’t consider an oil export ban Tuesday.
    • “I can confirm the president is not taking any tools off the table,” Energy Secretary Jennifer Granholm remarked, Reuters reported.
    • “If you had a ban on crude oil exports, because you’re cutting off supply to the global market, you are going to have higher global crude prices and higher global refined product prices that would be fed through here,” said Garrett Golding, a business economist tasked with analyzing energy markets at the Federal Reserve Bank of Dallas.

    Energy Secretary Jennifer Granholm said the administration hasn’t ruled out a petroleum export ban Tuesday, an apparent reversal of its previous position on the policy.

    Granholm’s comments appeared to suggest President Joe Biden was open to both an oil export ban and export ban on refined products like gasoline or diesel fuel. The energy secretary promised in December that a crude oil export ban was off the table during a meeting with oil industry officials, adding that she didn’t “want to fight” with domestic energy producers.

    “I can confirm the president is not taking any tools off the table,” Granholm remarked Tuesday during a visit to Louisiana, Reuters reported.

    However, market analyses of the 1975 federal oil export ban, which was repealed in 2015, suggested the policy had a negligible impact on prices and, sometimes, led to higher domestic energy prices. Allowing oil exports incentivizes domestic production, ensures global market stability and boosts the U.S. economy, according to multiple studies.

    “Petroleum product prices in the United States, including gasoline prices, would be either unchanged or slightly reduced by the removal of current restrictions on crude oil exports,” the Energy Information Administration (EIA) concluded in a 2015 report.

    A crude oil export doesn’t impact prices of refined products like gasoline or diesel fuel since they are traded on the international market, according to the Center for Energy Studies at Rice University’s Baker Institute for Public Policy. The 1975-2015 oil export ban didn’t apply to refined products.

    In addition, American refineries have a limited capacity for processing the lighter crude oil type that is mainly drilled in the U.S., forcing lower domestic production if excess crude cannot be shipped overseas.

    “That’s what led to us allowing crude oil exports to begin with in 2015 — the fact that we were going to run out of refining capacity for the type of crude oil that’s produced in the U.S.,” Garrett Golding, a business economist tasked with analyzing energy markets at the Federal Reserve Bank of Dallas, told The Daily Caller News Foundation in an interview.

    “That relief valve for U.S. crude production is what allowed it to keep growing,” he said, adding that it would require billions of dollars and take years to upgrade domestic refineries.

    Golding and fellow Dallas Fed economist Lutz Kilian published a paper in January that argued an oil export ban would not lower gasoline prices for consumers. They argued that limiting exports would increase international refined product prices which determine U.S. gasoline and diesel prices.

    Golding and Kilian added that an export ban would increase U.S. reliance on foreign oil and increase the nation’s trade deficit.

    “If you had a ban on crude oil exports, because you’re cutting off supply to the global market, you are going to have higher global crude prices and higher global refined product prices that would be fed through here,” Golding continued.

    The U.S. imported 6.2 million barrels of crude oil a day and exported 3.3 million barrels a day in February, the latest month with data, according to the EIA. The majority of the imports derived from Canada which mainly exports bitumen, a heavier crude type.

    At the same time, the U.S. imported 2.3 million barrels of refined products a day and exported 5.7 million barrels a day in February.

    Senate Democrats led by Massachusetts Sen. Ed Markey, meanwhile, have urged the Biden administration to implement a crude oil export ban in November and introduced a bill in April 2021 that would mandate the policy. The lawmakers argued such a ban would protect American consumers and prevent climate change by taking fossil fuels off the global market.

    Democratic Oregon Sen. Ron Wyden, who co-sponsored the Block All New Oil Exports Act, said the U.S. exports and imports millions of barrels of oil per day, perpetuating “a merry-go-round of oil dependence.”

    The White House and Department of Energy didn’t immediately respond to requests for comment from TheDCNF.

    SOURCE


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    2 COMMENTS

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    C E Voigtsberger
    C E Voigtsberger
    29 days ago

    “Let’s ban crude oil exports.”
    “But that will drive up international markets and ultimately affect prices in the U.S.”
    “Well then, let’s not ban crude exports.”
    “But that will effect international markets and make U.S. crude too expensive to recover.”
    “Well, then we’ll limit crude exports to the extent that it won’t drive up prices in the US.”
    “How much will we export per day?”
    “I thought you knew what those figures were supposed to be.”

    I am not a petroleum engineer. Never portrayed one in any entertainment field. That said, doing volunteer work for over seven years, I worked with a genuine petroleum engineer who had been all over the world working in that field. During slow periods sometimes we talked about oil and its processing. I already knew a little bit about the refinery business because my father worked at a refinery for the biggest part of his life and I have toured the refinery where he worked on public relations tours on several occasions.

    As the article indicates, refineries are set up to process certain grades of crude oil. A refinery set up to refine sweet, light crude cannot process heavy sour crude. It can be converted to process heavy crude but that takes it off line for a considerable period of time which, given the state of refineries in this country has an impact on the gasoline supply. We don’t run with a huge surplus of refining capacity. Every time the Arco plant down in El Segundo goes off line you notice it almost immediately at the pumps. When the Exxon refinery up in the Bay Area goes down the folks in NorCal start bleating every time they fill up.

    In order to have a steady supply of petroleum products, and that includes much more than simply 86 octane gasoline at the pumps. It includes stuff you smear on your face, it includes the plastic in the baby bottle you stick in your offspring’s mouth. It includes the plastic bags that the City of Ventura wants you to wrap your food waste in these days. The list of products that contain petroleum is longer than the list of social programs the demonkrauts want to institute. Wow! Is that ever a run-on sentence.

    Anyway, to pick up where I got off track, in order to have a steady supply of petroleum for our needs, it is essential to have a steady, dependable petroleum plan. We would have a more uniform plan if decisions were reached by throwing darts at a dart board. Take the pipeline form Canada. How many times has that been started and stopped. One of these days the Canadians will tell us to jam our end of the pipeline where the sun don’t shine and run it across Canada to Vancouver and sell the crude to the Chinese who would be more than happy to take it off the Canadians hands. They wouldn’t feel the pressure to control the Malay Straits that they feel now. They could run their tankers across the Pacific to Vancouver directly from China and wouldn’t have to negotiate any of the pinch spots on their present supply lines.

    Raise crude exports. Lower crude exports. Tap the petroleum reserves. Don’t tap the petroleum reserve. Import more crude. Cut crude imports. ;It doesn’t seem to matter which administration is in charge, neither of them have a coherent petroleum policy. That seems to me to be the first order of business. Instead of blowing with the wind and listening to the folks who fly in private jets and ride in limousines and who want regular folks to ride non-existent public transportation, somebody in charge ought to formulate a reasonable petroleum policy and stick to it for a significant period of time.

    The picture of the lady currently in charge of that policy certainly doesn’t inspire confidence in me that we are gong to have a coherent petroleum policy any time soon.Nor do her reporter statements seem to have the coherency and thoughtfulness that would assure me that somebody in charge has actually given some serious thought to the matter

    Charles
    Charles
    2 days ago

    Liberals living in a Utopian world , money grows on trees don’t you know ! Liberals and Wind Energy gives new meaning to Don Quixote chasing windmills !

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