Crude awakening

Forty-two years ago, many Middle Eastern countries cut oil exports, leading to what’s now known as the 1973 Oil Crisis. The U.S. government’s response — a complete oil export ban — is now lifted, likely helping the Wyoming economy.

The recently repealed ban kept all oil drilled on American soil in the country.

Meant to ensure the country’s independence from worldwide oil trade if necessary, the ban has become unpopular in recent years, said Anne Alexander, former University of Wyoming economics and finance professor and current associate vice president of academic affairs.

“We just have so much oil sloshing around here doing nothing,” she said.

Specialized crude oil refineries play a key role in the success of exporting oil. American refineries are geared toward heavier oil imported from areas such as the Middle East.

Meanwhile, oil drilled in the U.S. is described as sweet and light. Other countries, such as in Europe, are better equipped to refine the lighter oil, Alexander explained.

“By the analysis we did, lifting (the ban) means we can ship oil out to people that can better refine it,” she said. “It’s brilliant.”

Lower retail gas prices could be the final result of the repealed ban, positive to nearly everybody in Wyoming and the country. However, direct effects on the state’s drilling might be less noticeable, said Chuck Mason, the H. A. “Dave” True, Jr. chair in petroleum and natural gas economics in the Department of Economics and Finance at UW.

“It has the prospect of having an effect, but it can’t be large,” he said. “There might be in the neighborhood of a $5 (per barrel) increase. It’s not going to foster a massive increase in drilling.”

Still, no large production increase is better than decreased production, leading to closed wells and eliminated jobs, Mason said.

“More likely, this will provide a little extra revenue to producers starting to reach a point of closing production or reaching bankruptcy,” he said.

Any larger economic effects, such as increased drilling, won’t take effect in the next year or two, Alexander said, but rather a decade.

“What the oil export ban lifting does is, it gives (energy companies) that more much reason to continue even in the face of low prices, because at least they’ll have a place to send the oil where it will be refined and priced competitively,” she said.

The lifted export ban in oil likely won’t change coal or natural gas prices, Mason said.

“In the U.S., we’ve evaporated the link between natural gas and crude,” he said. “And coal is on tough times because natural gas is so prolific.”

In the long run, exporting oil can lead to an increase in wells, allowing the U.S. to rapidly obtain local oil if needed in a time of crises, Mason said, while also leading to cheaper and more advanced drilling techniques.

“I think things that promote the development and deployment of fracking projects, however those ventures might be incented, makes us better generally at doing fracking jobs,” he said. “And I think that’s going to lower the cost of drilling across the board. Looking down the road, there could be this knockoff effect that could make it easier to extract natural gas.”

(5) comments

Brett Glass

To where, exactly, would we export? The glut is worldwide. There are tankers stacked up in the Gulf of Mexico, full up with oil, unable to unload because the refineries don't need the crude. They aren't going elsewhere because there is no demand anyplace else.

We must face facts. OPEC is drowning the world in oil so as to weaken its three biggest enemies: Russia, ISIS, and (now especially, after the recent escalation of Sunni/Shiite tensions) Iran. Until and unless the situation vastly changes, dropping the export ban isn't even worth considering. Wyoming is simply going to have to hunker down for a spell 80s-like energy prices and all of the effects they will bring.

clipper

LOL, Hillary and 0bama's favorite terrorist group ISIS is in need of some oil as those darn Russians have been bombing the group's logistical lines.

Actually, this export ban was much ado about nothing as U.S. oil was exported all along as refined products with the profits and high paid jobs remaining within the U.S. refining industry. With export ban lifted Valero is no longer a long term hold.

adroit1

LOL...

Another baseless statement from the master himself. If the Emperor without Clothes cannot possibly be more off base (again)...

http://www.cnn.com/2016/01/11/politics/us-bombs-millions-isis-currency-supply/index.html

clipper

LOL, CNN (a government propaganda outlet) has a headline so it must be true.

There are people who see something written or hear something spoken and assume it's true. adroit falls in that category.

There's another group of people that, rather than believe what's been spoken or written, look to people's actions for the truth.

Then there's a third group of people that perform the analysis connecting the dots to ascertain Why people say one thing but are doing something else. I fall into this category.

So you see adroit with two levels on intellect separating us, it's impossible for us to have a meaningful discussion.

Stick to something you can comprehend like video games.

adroit1

Hahahaha!

Being delusional is a separate level of intellect! Yep!

Like "peer" reviewed science, journalism also goes through a process of vetting sources to publish stories. Journalists put their reputations on the line with each story they write.

When it comes to propaganda - you promote your spittle with each post.

And everyone sees through your hypocrisy. Just like railing against the government (NOAA) and bashing all things "0bama" government related - but wanting the NOAA to answer to a congressional subpoena. Isn't a congressional subpoena government too?

So when the "propaganda" tells your lies - it's all good. But when it doesn't - well - it is an inherent evil.

Perhaps you should work on that analysis and connect some dots in your flawed thinking.

It fails you everyday.

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.