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senate Bill S. 2886

Should the U.S. Ban Oil Exports?

Argument in favor

Oil exports make American customers more vulnerable to price shocks, and cause U.S. consumers to pay more at the pump. Banning U.S. oil exports will help shore up the Strategic Petroleum Reserve (SPR), an important protection against international price shocks.

burrkitty's Opinion
···
09/19/2018
Energy security is one of the most under valued security weaknesses of the United States. Manipulating oil prices is one of the ways other countries can disrupt the American economy and politics. Our dependence on foreign oil is dangerous. We should not be exporting oil to other countries while we are still buying oil from overseas. It makes no sense. Mind you that we should be diversifying our energy portfolio into renewables and lessening our dependence on fossil fuel‘s all together, but definitely, our dependence on foreign oil is a security risk that needs to be mitigated. Keeping our own oil at home (and preferably in the ground) limits the amount of influence other oil producing regions like the Middle East and Russia can have over our economy. Until our system migrates more fully to renewable energy, keeping our fossil fuel’s at home is a necessary middle step to transitioning off fossil fuels while keeping America independent from the controlled proxy manipulation of oil prices.
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Peter's Opinion
···
09/19/2018
I’ve been saying this for years. The only reason we export oil is because of greed. Than we import oil to satisfy the demand. Makes no sense except to those people who worship the money God who preaches greed.
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Leo's Opinion
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09/19/2018
Energy self-sufficiency is a large factor in national security.
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Argument opposed

It’s bad for both consumers and producers to ban U.S. oil exports: producers need access to international markets when they have too much oil to sell domestically, and consumers need access to international oil, which has different characteristics from U.S. oil.

Roger's Opinion
···
09/19/2018
Do you really want to give this president more power to regulate trade? The guy who thinks the Chinese pay the cost of tariffs we set?
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Esther's Opinion
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09/19/2018
The president doesn’t need any more authority. He’d really like to be king, I know, but we have a republic of the people, by the people and for the people. Let’s not forget that.
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Radnoq3's Opinion
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09/19/2018
Let’s pass some bills removing powers from the president first
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on Banking, Housing, and Urban Affairs
    IntroducedMay 21st, 2018

What is Senate Bill S. 2886?

This bill — known as the Block All New (BAN) Oil Exports Act — would reinstate the ban on the export of crude oil and natural gas produced in the U.S. It would give the president the authority to issue rules to ban exports of coal, petroleum products, natural gas, or petrochemical feedstocks. It’d also authorize the president to ban exports of supplies of materials or equipment that the president determines to be necessary to maintain, produce, refine, or transport energy supplies and supplies of materials or equipment that the president determines to be necessary to construct or maintain energy facilities within the U.S. The president would maintain the ability to exempt any crude oil or natural gas exports that are important to the U.S.’ national interest from the export ban.

All export bans on oil would have to account for the national interest in not interrupting or impairing the following:

  • Exchanges in similar quantity for convenience or increased efficiency of transportation with persons or the government of a foreign state;

  • Temporary exports for convenience or increased efficiency of transportation across parts of an adjacent foreign state before reentering the U.S.; and

  • The historical trading relations of the U.S. with Canada and Mexico

The Secretary of Commerce would be responsible for developing regulations that bring this export ban into effect. There would be a public comment period related to the rule for interested persons to comment on it as soon as practicable after it’s put forward by the Commerce Department.

Impact

Oil exporters; Energy Policy and Conservation Act; Strategic Petroleum Reserve; the Secretary of Commerce; and the president.

Cost of Senate Bill S. 2886

A CBO cost estimate for this bill is unavailable.

More Information

In-Depth: Sen. Edward Markey (D-MA) introduced this bill to protect American drivers from rising gas prices, which he blames on President Trump exacerbating geopolitical uncertainty around the globe and roiling oil markets and lifting the 40-year ban on exporting American crude oil:

“President Trump loves having his name on things – towers, steak, universities – and now his name is associated with higher gas prices. President Trump’s incoherent foreign policy has been driving up prices for America’s drivers by increasing risk and roiling markets. This increase in oil and gas prices is a ‘Trump oil risk tax’ and Americans are paying the price at the pump. President Trump says his agenda is ‘America First’, but the policies he and Republicans are pursuing put Big Oil first and American consumers last.”

In addition to introducing this legislation to ban oil exports, Markey has also asked the Department of Energy (DOE) about the current state of the Strategic Petroleum Reserve (SPR) and called on the Government Accountability Office (GAO) to complete a review and report on the effects of crude oil exports on American consumers and the economy.

The American Petroleum Institute (API)Independent Petroleum Association of America (IPAA), and Brookings Institute support U.S. oil exports. The API, the only national trade association representing all facets of the oil and natural gas industry, contends that there are multiple reasons for the U.S. to remain both an importer and exporter of gas:

“First, while we point out that oil is a global commodity, almost no one consumes oil directly.  It must be refined into the fuels, feedstocks, materials and products that we purchase and use in our daily lives.  This means that physical characteristics – such as where oil is produced versus where there is refining or manufacturing plants, or the location of the greatest consumer demand – affect its usefulness and therefore value. At the same time, you need different kinds of oil to make different products and, despite the rapid increase in domestic oil output, significant portions of the oil that is being produced here may not be what is needed to make all of the products Americans use. This underscores the need for flexibility in trading oil internationally – marketing supplies that might not match local needs to global buyers – which is integral to unlocking the United States’ productive potential. For these reasons and others it’s neither practical nor in our country’s best interest to keep American oil here at home and opt out of the global crude market… Ultimately, banning exports is misguided energy policy because it could disrupt new sources of crude oil production that otherwise would not be needed domestically, and the supporting economic activity that has accompanied it could be squandered... [T]he different locations, qualities and quantities of U.S. crude oil explain why the U.S. has continued to import and export crude oil even as it has become abundant domestically.  These activities are integral to the 10.3 million U.S. jobs supported by the natural gas and oil industry and the broader U.S. economy. The right policies, though, are necessary to help sustain the energy renaissance and continue to foster domestic production. This means increasing access to resources (onshore and offshore), expanding infrastructure and cogent policies that enhance trade, reduce tariffs and protect investments at home and abroad."

Sen. Lisa Murkowski (R-AK), ranking member of the Senate Energy and Natural Resources Committee, is a longtime advocate of oil exports, calling it “good policy” to allow exports of U.S. energy.

This bill has the support of two cosponsors, both of whom are Democrats.


Of Note: Since President Trump took office, gas prices have risen 25%, causing the average U.S. customer to now pay approximately an additional $350 per year.

According to the U.S. Energy Information Administration (EIA), the U.S. exported 2.57 million barrels of oil per day in May 2018 — an all-time record rate, outpacing the same time period in 2017 by 1.48 million barrels per day.

U.S. crude oil exports were banned for 40 years, from 1975 to 2015. The ban was originally put in place two years after an OPEC oil embargo that banned oil sales to the U.S. sent gas prices skyrocketing, and was lifted in 2015 when President Obama signed the Consolidated Appropriations Act of 2016 into law with a provision stating that “to promote the efficient exploration, production, storage, supply, marketing, pricing, and regulation of energy resources, including fossil fuels, no official of the Federal Government shall impose or enforce any restriction on the export of crude oil.”

Proponents of allowing U.S. oil exports argue that it increases production, raising revenue by at least $1.3 trillion on an annual basis, which would increase U.S. GDP by approximately 1% — a substantial increase for a developed nation. They also argue that it creates 400,000-964,000 jobs, and results in more innovation in the oil market as capitalism kicks in and oil producers compete to bring their products to market at the lowest possible rates.

Those who oppose U.S. oil exports contend that there is a real risk of the U.S. becoming a resource-reliant economy if it exports too much, and point out that exports deplete the SPR.


Media:

Summary by  Lorelei Yang

(Photo Credit: iStock.com / Im Yeongsik)

AKA

BAN Oil Exports Act

Official Title

A bill to amend the Energy Policy and Conservation Act to reinstate the ban on the export of crude oil and natural gas produced in the United States, and for other purposes.

    Energy security is one of the most under valued security weaknesses of the United States. Manipulating oil prices is one of the ways other countries can disrupt the American economy and politics. Our dependence on foreign oil is dangerous. We should not be exporting oil to other countries while we are still buying oil from overseas. It makes no sense. Mind you that we should be diversifying our energy portfolio into renewables and lessening our dependence on fossil fuel‘s all together, but definitely, our dependence on foreign oil is a security risk that needs to be mitigated. Keeping our own oil at home (and preferably in the ground) limits the amount of influence other oil producing regions like the Middle East and Russia can have over our economy. Until our system migrates more fully to renewable energy, keeping our fossil fuel’s at home is a necessary middle step to transitioning off fossil fuels while keeping America independent from the controlled proxy manipulation of oil prices.
    Like (79)
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    Do you really want to give this president more power to regulate trade? The guy who thinks the Chinese pay the cost of tariffs we set?
    Like (62)
    Follow
    Share
    The president doesn’t need any more authority. He’d really like to be king, I know, but we have a republic of the people, by the people and for the people. Let’s not forget that.
    Like (39)
    Follow
    Share
    I’ve been saying this for years. The only reason we export oil is because of greed. Than we import oil to satisfy the demand. Makes no sense except to those people who worship the money God who preaches greed.
    Like (36)
    Follow
    Share
    Let’s pass some bills removing powers from the president first
    Like (30)
    Follow
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    Energy self-sufficiency is a large factor in national security.
    Like (24)
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    What a stupid idea. Oil companies find oil deposits, drill for it, extract/pump it, and finally sell it creating financial wealth for stockholders. If you can't sell surplus oil to offshore buyers, the oil must be stored or left in the ground. If you leave it in the ground, why drill for it? This proposal is just a sneaky way of closing down ”Big Oil.” This oil revenue is why the most liberal progressive state institutions or government pension plans include a hefty oil portfolio.
    Like (15)
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    Rules to ban exports of coal, petroleum products, natural gas, or petrochemical feedstocks. Sounds good on the surface, but the devil in the details. This would be the same as tariffs, but from a different direction. Protect America energy first is right thing to do and I have no problem with that. We as a nation and colonies need energy independents, we as Americans, need to support all energy source and pursue alternative energy! Alternative energy will drive cost down, help energy Independences and create jobs, but jobs and economic, just like tariffs, putting rules on ban exports, jobs will be lost and drive cost on goods up, plus higher deficits. Negotiation is the only way to reduce cost and stability in the world market.
    Like (14)
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    I will always oppose anything that gives Emperor Bonespurs any more authority than he already has, or just plain gives himself.
    Like (12)
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    Remember we started the fracking boom so as not to be dependent on foreign energy at home. Now apparently that we’re in drill baby drill mode from sea to shining sea we’re not so nationalistic about our resources. 🙄
    Like (10)
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    Let the free market ride!
    Like (10)
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    Banning oil exports again will lower gas prices and protect America from international price shocks.
    Like (6)
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    OMG. We keep building walls around us, barriers against progress. Walls never work. We MUST be the leaders in worldwide economic progression, building a better world.
    Like (6)
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    This question is inane and demonstrates a lack of basic understanding of how economies work. Fossil fuels are commodities traded on open markets. Stop that trade and airlines, shipping companies, power companies, and many more businesses will go out of business in a long chain reaction. The world runs on fossil fuels and the open markets that they trade on makes it all possible.
    Like (6)
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    We really need to switch to clean renewable energy, but we can do this too.
    Like (5)
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    Any oil needs to be kept here so we drill less
    Like (5)
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    Sure sounds like a lot of regulation from the reichwingers. Thought trump was against that.
    Like (5)
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    It’s bad for both consumers and producers to ban U.S. oil exports: producers need access to international markets when they have too much oil to sell domestically, and consumers need access to international oil, which has different characteristics from U.S. oil. This question is inane and demonstrates a lack of basic understanding of how economies work. Fossil fuels are commodities traded on open markets. Stop that trade and airlines, shipping companies, power companies, and many more businesses will go out of business in a long chain reaction. The world runs on fossil fuels and the open markets that they trade on makes it all possible.
    Like (5)
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    People and companies should be free to engage in commerce and trade. Prohibitions like this are bad for everyone.
    Like (5)
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    Having Trump determine how we import/export our oil/gas is a dangerous power for him to have.
    Like (5)
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