Decades-Old Export Ban Threatens U.S. Oil Production

CULVER CITY, CA - APRIL 25: Oil rigs extract petroleum as the price of crude oil rises to nearly $120 per barrel, prompting oil companies to reopen numerous wells across the nation that were considered tapped out and unprofitable decades ago when oil sold for one-fifth the price or less, on April 25, 2008 in the Los Angeles area community of Culver City, California. Many of the old unprofitable wells, known as 'stripper wells', are located in urban areas where home owners are often outraged by the noise, smell, and possible environmental hazards associated with living so close to renewed oil drilling. Since homeowners usually do not own the mineral rights under their land, oil firms can drill at an angle to go under homes regardless of the desires of residents. Using expensive new technology and drilling techniques, California producers have reversed a long decline of about 5 percent annually with an increased crude flow of about 2 1/2 million barrels in 2007 for the first time in years. 
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Clare Foran
Jan. 21, 2014, 1:50 a.m.

The In­ter­na­tion­al En­ergy Agency said Tues­day that the U.S. ban on crude oil ex­ports could act as a brake on in­creas­ing do­mest­ic pro­duc­tion, ac­cord­ing to The Wall Street Journ­al. 

“The grow­ing volumes of light tight oil that can­not leave North Amer­ica are in­creas­ingly pos­ing a chal­lenge to in­dustry, put­ting the spot­light on the U.S. crude oil ex­port ban,” the agency said in a monthly re­port on oil mar­kets. 

Re­fined pet­ro­leum products are not sub­ject to the same ex­port lim­it­a­tions, and U.S. re­finer­ies are work­ing double time to pro­cess in­com­ing ship­ments of crude oil to ready them for trans­port abroad. But do­mest­ic out­put shows no sign of slow­ing and is on pace to over­whelm coastal re­finer­ies if the ban re­mains in ef­fect, with IEA fore­cast­ing that in 2014 oil pro­duc­tion in the U.S. will ac­cel­er­ate to 780,000 bar­rels per day.

Strong de­mand for oil at home and abroad, along­side a surge in U.S. oil pro­duc­tion res­ult­ing from shale-oil ex­plor­a­tion, has put pres­sure on law­makers and the Obama ad­min­is­tra­tion in re­cent months to lift the re­stric­tions on crude ex­ports. 


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