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U.S. Commerce Department Eases Oil Export Ban

by Elizabeth Alford on August 17, 2015

The battle over the U.S. oil exports gained traction this week as the Commerce Department moved to give permission for limited shipments.

Related: Senate Committee Votes to Lift Oil Export Ban

The U.S. Commerce Department told Congress it will approve an application by Pemex, the national oil company of Mexico, to exchange their heavy crude oil for the light crude pumped in the U.S. Most interpret this move as a significant step to overturn the 1970’s oil export ban, though it is very limited. At this time, this unique permission is only for Pemex in Mexico and will likely only include about 100,000 barrels a day.

Congressmen, Will Hurd (R., Texas) commented that, “The American energy renaissance that has flourished in Texas due to Eagle Ford, Permian Basin and Barnett shale exploration will continue to strengthen because of this decision.”

Analysts at Fortune warned against reading too much into this decision, saying the change should be seen more as a “gesture of goodwill, which, may yield far more lucrative dividends down the road for Big Oil.”

In March, the IHS reported that the oil export ban hurts the economy and that eliminating the ban will have far-reaching consequences including:

  • Further increases in domestic oil production

  • Lower gasoline prices

  • 964,000 additional jobs

  • Benefits to manufacturing and service-related sectors in every state

  • Strengthening national security and America’s position in the world

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