U.S. Rep Ken Buck wants to lift U.S. oil export embargo
September 24, 2015
To help oil production, the U.S. needs to lift the antiquated embargo on oil exports, said U.S. Rep. Ken Buck in a telephone town hall meeting Monday evening.
Buck held the telephone conference call, which was open to anyone, to talk about the energy issue in northern Colorado and the U.S.
With the downturn in the oil and gas industry this year, Buck and others said it's going to help the economic outlook of both the country and the industry to start exporting oil.
Buck invited George Baker, executive director of Producers for American Crude Oil Export, to talk about lifting the export embargo.
"This ban, which most people do not know about in this country, goes back to the 1970s," Baker said.
Baker explained the embargo was placed because at that time, the U.S. officials were worried the U.S. didn't have much oil left for exporting. But now the U.S. is back in the game.
Recommended Stories For You
The recent technological improvements in oil and gas extraction, including hydraulic fracturing and horizontal drilling, have opened the flood gates on oil production in the U.S.
"We're now the world's largest producer of oil," producing more than 9 million barrels a day, Baker said.
Buck added; "There is additional oil found all the time in this country."
The American market has been struggling since the price of oil per barrel started dropping late in 2014. Northern Coloradans have seen and been personally affected by the drop in oil production. The drop has affected many nationwide, as well.
"We've lost over 216,000 oil jobs. Over 1,000 rigs have gone down," Baker said of national losses.
He quantified that by saying that for each rig, more than 200 jobs are lost directly, and about 600 in support staffing.
The reason for the production loss is because Saudi Arabia is flooding the world oil market, which drives down the price, they said. This makes it harder to have profitable oil production in the U.S.
"It's a simple matter of supply and demand," Baker said. "You have to understand that the price of gasoline in this country is set in the world market."
If the U.S. puts its oil on the world market by lifting the exporting embargo, it will create healthy competition, and it will bring back many of the lost jobs in oil and gas production.
"By adding supply to the world market, you stabilize," Baker said. "You reduce the volatility of the world market."
So lifting the embargo would help the economy, and foreign relations.
Many European countries rely on Russia and Middle Eastern countries for their oil supply.
"They want to work with us," Baker said of the countries reliant on Russia and the Middle East. "They don't want to be dependent on these unstable countries."
The other issue is the U.S. has what's referred to as light, or sweet, oil, which requires different refinery methods. Other countries have heavy, or sour, oil, which American refineries have been built around.
"So we are exporting one kind of crude and importing another type of crude," Buck said.
But that could soon change.
"(U.S.) oil refineries are in the process of changing the technology in their plants," to be able to refine the U.S. light oil, Buck said.
"Over time they are getting more and more confident that the light crude we are producing here in this country is going to be sustainable," he said.
Buck said he hopes a bill lifting the embargo will pass by the end of the year. The votes to do so are present in the House of Representatives, he said, but the Senate is still uncertain territory.
"I believe this president will sign a bill if it makes it to his desk," Buck said. "I think most of the folks in Washington, D.C., realize the economic benefit to this country."