The fall in oil prices is creating a rift in the US petroleum industry. A debate whether to terminate a 1970’s era ban on the majority of exports of oil pumped from the U.S is going on.
Drillers desire the restrictions to be lifted given a 40% price drop in 2014. Refiners are getting huge profits from the cheap oil desire the restrictions to remain.
Both sides are promoting their case via increased lobbying, advertisement campaigns, congressional hearings, and think tank studies and also Twitter Inc (NYSE:TWTR).
The Consumers and Refiners United for Domestic Energy, a group of 4 refiners formed last year known by the acronym “Crude”, tweeted that energy independence doesn’t matter.
A group organized by drillers last year, the Producers for American Crude Oil Exports or “Pace” responded on Twitter. They commented that oil should be exported for the same reason that the US imports and exports many other products such as gasoline, cars, computers, etc.
Pace members such as ConocoPhillips, Marathon Oil Corp., and Chesapeake Energy Corp. spent around $27 million to lobby the previous year much more than the $3.44 million spent by Crude members. Outmatched financially, Crude follows a strategy of emphasizing touchstones including energy independence and the prospect of higher gasoline prices.
The division is making lawmakers reluctant to lift the ban as they may be blamed for rising gas costs. Last week at Capitol Hill news conference, Representative Joe Barton, who is behind a bill to terminate the export ban commented that the export ban does not apply to processed products such as gasoline, diesel and jet fuel. As a result, refiners are making huge profits by purchasing oil at a discount from the global benchmark and then selling their products to domestic, as well as international customers.
Representative Henry Cuellar of Texas, one of four Democrats who backed Barton’s bill as co-sponsors, dubbed the export ban obsolete.
