Posted September 8, 2014 - Without getting into all the specifics on what happened, how it happened and where it all happened, (you can read all about it here) in 1973 the Arab Oil Embargo changed policy in the United States. In a nut shell, Congress banned crude-oil exports. The embargo caused oil prices to quadruple and led to rationing at gas stations across the U.S. Automakers started building cars that were fuel efficient and stopped building the gas guzzlers that were the norm at that time. The rules were put in place when there was a fear the country’s oil fields were running dry. That was then and this is now.
That fact is that it's hurting us...economically. With Europe poised to endanger its gas supply by imposing more sanctions on its major supplier Russia, the possibility of energy exports from America takes on an important security dimension too. A few months ago, the Obama administration began clearing the way for ultralight oil known as condensate to be allowed to ship to foreign buyers. Only two companies are allowed to export this condensate. It's a wait and see approach to see if it's a viable option.
During the Governor’s Energy Conference in Oklahoma City, Jamie Webster, senior director of global oil markets for research firm IHS Energy said “We have the best refining system. The Gulf Coast refineries are unparalleled in the world. The problem is that here in the U.S., we are producing world-class oil. While it would seem like matching up a world-class refining system with world-class oil would make sense, they actually don’t play well together."
Sound a lot Congress and the Obama Administration doesn't it?
The debate will continue. Oil companies are obviously wanting to end the embargo but it's going to be a hard sell in Congress. There is much debate about whether prices at the pump will go up or go down as a result of ending the ban. And that's what will determine the fate of the embargo that's now over 40 years old. The american people want to know how much money it's going to take to fill up the gas tank. If sending crude oil overseas does that...then everyone wins. The question is...will it? Stay tuned.