Tag: "exporting"

Reducing Europe’s Dependence on Russia, Benefits United States

As tensions over the situation in the Ukraine heightened over the last few months, sanctions were thrown left and right between Russia, the United States and the European Union. The sanctions targeted the Russian banking and energy sectors, putting pressure on Russian President Putin’s inner circle.

Since the sanctions, Russia has lost $75 billion in capital worth, faces weaker direct investment and is teetering on the brink of recession, according to the BBC.

Unfortunately, Russia wasn’t the only one impacted by the sanctions. As one of the biggest energy suppliers in the world, Russia ranks in the top five producers of both petroleum and natural gas and is a huge energy supplier to the E.U. Sanctioning Russia could very well backfire on many E.U. nations.

So the question remains: how can the global community, and in particular the U.S., take action against Russia without risking E.U. economies?

According to Stephen Cheney’s Wall Street Journal op-ed, the answer is simple: expediting the export of liquefied natural gas (LNG) from the U.S. to the E.U. and its neighbors.

Oil and natural gas sales accounted for 68 percent of Russia’s total export revenues in 2013, according to the U.S. Energy Information Administration (EIA). From natural gas alone, Russia took in $73 billion last year.

The U.S. has seen booming growth in the natural gas industry over the past few years, and that growth is only expected to continue. According to Cheney, a recent Citigroup study predicted that the U.S. energy industry would add 665,000 new jobs and be a net exporter of energy by the end of the decade, and that by 2035 $115 billion would be added to the U.S. gross domestic product.

Creating U.S. LNG exports would transfer $4 billion in wealth from Russian consumers to European consumers, according to a 2013 Deloitte study. Additionally, says Cheney, reducing Europe’s dependence on Russia would increase the national security of both the U.S. and its allies. Yet the U.S.’s restrictive export laws only allow exports to be sent to nations with which the U.S. has a free-trade agreement, or after a lengthy permit process to ensure the export is within “the public interest.”

If opening up U.S. exporting restrictions to allow U.S. companies to export liquid natural gas could increase natural security, add jobs, and increase the security of our allies, shouldn’t that fall within “the public interest?”

Megan Simons is a research associate at the National Center for Policy Analysis.

Oct 29, 2014 | 2 comments | by

Another Call to Export American Energy

Yet another “call”, this time from Roll Call, to export energy from the United States and joins many who support lifting the ban and regulations on our energy industry to export. With the U.S. now producing more oil and natural gas than Russian and Saudi Arabia, over 11 million barrels a day, lifting the U.S. oil export ban would:

  • Add over $1 trillion in government revenues by 2030.
  • Reduce fuel prices at the pump.
  • Create 300,000 more jobs a year.

The current hydraulic fracking and American energy boom is reducing oil imports by 22 percent next year. Also, this American energy boom could also reduce the oil imports of European countries. The United States could replace Russia title as “Europe’s gas station” and provide all of Europe’s energy needs.

Oct 20, 2014 | 7 comments | by

Lower Energy Prices Help Many Americans Stay Warm

Many Americans struggle during the winter with expensive and excessive consumption of energy resources to keep warm. Inflated energy prices really puts a strain on many families and their budgets. However, this upcoming winter will be a bit easier to get through, thanks to the fracking boom.

  • Propane prices are 24 percent and consumption is 13 percent lower.
  • Oil price reduction allows a 15 percent reduction in heating oil energy spending.
  • Homes will use 10 percent less gas and 5 percent gas bill reduction.

The recent fracking boom has not only lowered energy prices for consumers, but also benefited the United States economy. Fracking’s benefits are very important to American consumers. This benefit will increase as fracking technology advances and the option to export our natural resources becomes more of a reality.

Oct 08, 2014 | 2 comments | by

Former Top Aid to Obama Calls for Exporting Oil

In addition to the most recent Brookings report that shows some of the benefits of lifting the United States ban on crude oil exports, Larry Summers is also calling for an end to the ban.

Summers, the former top economic advisor to President Obama, also agreed with Brookings that lifting the ban would lower domestic gasoline prices, create jobs and increase economic growth.While he is unsure if the president will lift the ban, he says the ban, which was put in place in 1975, can only be removed if the president finds that it is in the nation’s best interest.

Larry Summers also added that the only losers of lifting the ban would be the refineries that are currently benefiting from cheaper global crude prices.

Sep 10, 2014 | Leave a Comment | by

Major Effort to Lift Oil Export Ban

Despite a fear of rising gasoline prices at the pump, a strong lobbying effort will be aimed at persuading lawmakers and administration officials that the United States can afford to export crude oil now that the country is the world’s biggest oil producer.

  • The U.S. pumps more than eight million barrels of oil a day.
  • An increase of 55 percent from five years ago.
  • The U.S. still imports 33 percent of its oil from foreign sources.
  • Oil imports are at the lowest level since 1985.

A broad view by the public is that U.S. oil should stay at home will test export proponents. A majority of voters, 53 percent, opposed exporting oil in a poll conducted this year by FTI Consulting. Republican voters opposed oil exports more than Democrats did, the poll found.

However, according to a study by IHS last May, lifting the ban on U.S. crude oil exports would lead to:

  • Increase current U.S. production from 8.2 million B/D currently to 11.2 million B/D.
  • Add investment of nearly $750 billion.
  • Cut the U.S. oil import bill by an average of $67 billion per year.

At present, the current policy is discouraging additional crude oil supplies from being brought to market, which actually makes gasoline prices higher than they otherwise would be.

The additional crude oil supply that would be generated if exports restrictions were removed would:

  • Lower gasoline prices by an annual average of 8 cents per gallon.
  • Save U.S. motorists $265 billion for during the 2016-2030 period.

The increased economic activity resulting from the rise in crude production would support an average of:

  • 394,000 additional U.S. jobs over the 2016-2030 period
  • With a peak of 964,000 jobs in 2018.

Doing away with exports restrictions would also generate added benefits to U.S. household income, gross domestic product (GDP) and government revenues. The average disposable income per household would increase by an additional $391 in 2018 as benefits from increased investment.

Aug 27, 2014 | Leave a Comment | by

DOE Must Expediate LNG Export Permits

The United States Department of Energy (DOE) finalized reforms it proposed on May 29 to its process for determining whether planned Liquid Natural Gas export projects are in the national interest as reported in Oil & Gas Journal:

  • Liquid Natural Gas (LNG) export proposals are presumed to be in the national interest under the Natural Gas Act.
  • This excludes countries that do not have a free-trade agreement (FTA) with the United States.
  • DOE has conducted an informal review for more than 30 years, and has issued eight conditional authorizations for LNG exports to non-FTA countries in the last 3 years.

However, The Center for Liquefied Natural Gas expressed serious reservations about the direction of the Department of Energy’s procedural landscape in response to the proposed reforms becoming final and said:

  • The Department of Energy could improve regulatory certainty by instituting a policy of prompt approval for final non-FTA export permits once the applicants have completed their National Environmental Policy Act reviews.
  • Continued regulatory uncertainty is not beneficial.
  • The development of these projects and the economic benefits they will deliver to this country should be expedited.
Aug 25, 2014 | 1 comment | by

WTO Rules on China’s Rare Earth Exports

World Trade Organization (WTO) ruled recently that China’s rare earth elements (REE) export restrictions violate international trade regulations.

  • China has a 90-percent stranglehold on the bulk of supply and a 70-percent share of global consumption.
  • China is looking at removing REE export taxes, which were levied at a rate of 15 to 20 percent.
  • The new tax regime “will force Chinese rare earth producers to raise prices towards levels outside China.”
  • The impact in the short term could be significant, as domestic prices are generally 36 percent lower than FOB prices.
  • Should China manage to clean up its smaller mines and consolidate its REE industry, the country could solve the current overcapacity situation.

By Vivien Diniz of Resource Investing News

Aug 20, 2014 | 1 comment | by

Why the U.S. Should Already be the Global Energy Leader

Nearly 40 years ago, United States Congress passed legislation that would cease all exports on crude oil in the U.S. This was done as a way to protect our natural resources, and ensure that the country would have oil in the event of an international incident that would cut off our supply. The belief was that we would conserve what oil we had, and remove dependence on crude oil. However, it did the exact opposite.

production of crude oil

The graph shows the amount of U.S. Field Production of Crude Oil per day from 1970 to 2013. In 1970, production of crude in the U.S. actually peaked and is the most barrels ever produced in a given year. An administration, claiming to preserve our natural interests, did the exact opposite leaving congress puzzled. However, free-market thinkers, are not puzzled. It is clearly visible that U.S. producers of oil realized the shrinking market, and began producing less and less oil. Since it was no longer advantageous to produce oil, they were forced to pull back on production or shut down altogether.

oil rigs

While the Energy Information Administration does not have data for oil rigs going back to 1970, we can see that until 2005 the trend was declining over time. Until the newest energy revolution or “Age of Innovation,” our country was in serious harm of reaching energy dependency. Legislation clearly harmed the oil industry and cost thousands of jobs, all for a result that produced the exact opposite of their intention. In order to achieve the desired effects the administration must do several key things;

  • The first is allowing exports of crude oil. If exports are allowed again, the amount of oil production our country will achieve will be monumental and our lower prices will reflect that.
  • Next, laws must be changed so that a new oil refineries can open in the United States. The amount of innovation and production at existing refineries is substantial, but there has not been a new refinery opened in 40 years. If our production rise is to continue a new refinery must be built.
  • Finally, Obama must open the Keystone pipeline. While many point out the key economic benefits associated with the project such as jobs and lower prices, we must also recognize the diplomatic advantages. Canada wants the pipeline approved as well, and is irritated that Obama has not done so. We must open it to improve relations with Canada, and work with our neighbors in the energy sector. Even Mexico has key energy resources, and with the ability to privatize oil now, we can gain a lot from both of our NAFTA partners.

The volatile nature of international energy markets that includes OPEC members and countries in the Middle East could be avoided with propelling and establishing our own energy sector. We must begin removing the barriers that constrict our energy economy.

Jun 30, 2014 | 6 comments | by

Hoard and Use Some Resources, Export the Rest

President Obama’s administration approved expanding natural gas exports back in 2011 and 2013. Cheniere Energy Inc’s Sabine Pass facility will begin exporting to countries in 2015, Freeport LNG in 2017 at up to 1.4 billion cubic feet a day of liquefied natural gas and Cameron LNG, LLC has been added this year to export up to 1.7 billion cubic feet a day.

The United States has an abundant amount of natural resources that we are not using and may never use if technology keeps improving our energy consumption. A recent technological advancement, fracking, increased the volume of a number of our energy sources such as natural gas and oil. In a recent NCPA issue brief, the clear advantage fracking is for America’s energy needs are explained:

Just 15 years ago, analysts predicted America had only 60 years of natural gas supplies available at then current rates of use. Today, natural gas consumption is much higher, and fracking has increased estimated reserves to 100 years or more.

The Strategic Petroleum Reserve (SPR) that can hold up to 727 million barrels of crude oil only. Refined oil reserves do not exist in the United States. If our existing refineries went offline, we would have to import refined petroleum products. This defeats the purpose of having an “emergency” stockpile of petroleum reserves. What good is the oil if you cannot use it? There should be a Strategic Refined Petroleum Reserve (SRPR) of at least equal in size for real emergencies.

We have an abundant amount of natural resources that we are not using and may never use. Resources like our natural gas and oil are very valuable and can be easily exported. We would then boost our nation’s economy and have the money needed to improve the technology at a faster rate making our energy use more efficient.

Mar 17, 2014 | 5 comments | by
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