U.S. Crude Oil Export Ban

Exporting crude oil from the U.S. for decades was largely illegal. Until lately, it had also been mostly unthinkable. Domestic production had been declining for decades and the country seemed hopelessly addicted to foreign supplies. Not anymore. Horizontal drilling and hydraulic fracturing have squeezed torrents of oil from shale rock deep underground. The U.S. produced more oil in 2013 than it imported for the first time in two decades and in June 2015 it surpassed Russia and Saudi Arabia to become the world’s biggest producer of oil and gas. Six months later, with an assist from a budget bill, the ban was headed for the history books.

The Situation

Congress voted in December to lift the 40-year-old ban on crude oil exports as part of adomestic prices until drilling became unprofitable, jeopardizing the U.S. goal of energy independence. Some independent refiners supported the ban to maintain their cost advantage, which helped them sell record amounts of fuels abroad (because exports of oil products were permitted). European and Asian refiners, by contrast, may benefit from access to U.S. crude. Some Democratic politicians, such as Senator Edward Markey of Massachusetts, have contended that allowing crude exports could lead to higher U.S. gasoline prices. (Similarly, government approval for facilities to ship liquefied natural gas was opposed by chemical companies that use the fuel as a raw material, arguing that exports would raise prices at home.) Many Democratic lawmakers and President Barack Obama had opposed the end of the ban as a step back on limiting carbon