Is the U.S. ready to become an oil exporter?

An employee of oil giant Total gathers informations on the company's Texas plant in Port Arthur on June 6, 2013. 

Thanks to the fracking boom, the United States has become the world’s largest oil and gas producer. But it’s still illegal for energy companies to export crude oil. Exxon has just become the latest oil company to say it’s time for the U.S. to lift the ban on oil exports

One question that comes up is whether U.S. consumers would see higher gas prices. Another is: Wait, does the U.S. actually have an oil surplus?   

Not overall. “The US has not yet become a net producer of oil,” says Simon Wardell, an energy analyst with IHS. “It still consumes more than it produces by quite a margin.”

But it turns out that the places where oil is being produced in the U.S. are actually closer to foreign markets than to domestic ones: West Texas -- right by Mexico. North Dakota, next to Canada. 

Meanwhile, U.S. refineries that can handle this oil are farther away. There’s a bottleneck there. Wardell says it could be more efficient to ship some of that oil to our neighbors -- and buy more on the global market. When it comes to prices, he says the impact could be more complicated than U.S. supply and demand.

“Oil is a global commodity,” he says. “You can ship oil very cheaply, and what you tend to find is, the price of oil converges globally.” 

And by the way, he says, if there was some new threat to imports, we could just impose an export ban again.

For what it’s worth, oil companies aren’t the only ones saying it’s time to reconsider the ban. The Council on Foreign Relations published a memo last summer saying the same thing.

About the author

Dan is a sustainability reporter for Marketplace.
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Last I checked, my car runs on gasoline, not oil. And companies have been exporting the heck out of refined fuels. I fact, America exports more $ worth of refined fuel than anything else. More than grain, more than Hollywood movies....
That's what the Keystone pipeline is all about. Getting the heavy crude down here to Texas. Then they will refine it right here, and put the fuel on barges and ship it to Mexico and South America, even to Europe. And American consumers think it will help lower fuel prices at the pump. It might, if you are a consumer in South America.
The truth is they want to bring some heavy Canadian crude down a super long pipeline, refine it in our backyard, then ship it overseas. So what do you get out of this? Unless your the CEO of one of the big refiners, not much.
Obama should cut a deal, you get your pipeline, but we also ban refine fuel exports. We might get gas below $2 again. Then Americans would have a piece of the economic benefits of US fracking, instead of a few executives who already make millions a month. Stick that in your keystone pipe and smoke it.

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