Should the United States Export Crude Oil?

For some time now, the United States has been exporting crude oil to Canada on a very small scale. These exports took place in an environment of declining U.S. oil production. Fortunately for Americans, the times have changed, and we are predicted to be energy-independent by 2035 because of a surge in domestic oil and natural gas production.

Aside from our national security, publicly traded companies are already trying to benefit from this scenario. Look no further than BP (NYSE: BP  ) and Royal Dutch Shell (NYSE: RDS-A  ) , which both received permission last year to export crude oil from the United States to refineries in Canada. While this is a small start, the debate is likely to gain momentum for greater exports. This comes alongside the ongoing tensions surrounding exporting liquefied natural gas.

If this trend is to move forward on a larger scale, several refineries could see the prices they pay for domestic crude rise. Many have been exporting refined products for quite some time, so it would simply be adjusting the timing of exports to an earlier point on the production life-cycle. 

For information regarding the interesting dynamic existing for U.S.-based refineries, check out the roundtable discussion in the following video.

While these prolific production numbers we've seen lately might warrant lower oil prices, higher prices per barrel are certainly a potential reality. If you're on the lookout for some currently intriguing energy plays that could benefit from the later scenario, check out The Motley Fool's "3 Stocks for $100 Oil." For free access to this special report, simply click here now.

 


Read/Post Comments (11) | Recommend This Article (1)

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  • Report this Comment On June 23, 2013, at 10:56 AM, beachcruiser wrote:

    No, there should be. No export of any energy from the United States. Unfortunately American based oil companies took advantage of cheap mining costs overseas by moving refineries and drilling rigs in the late seventies. They partnered up with a newly firmed oligopoly of oil rich tribes and called it OPEC.

    For many years we have supported efforts to help keep overseas pacts in place using US Government resources, and yet all the common consumer experienced has been is elevated costs.

    Now that certain oil companies have seen the unlimited financial cost associated with a fully developed overseas competition they now see the untapped US market as the Middle East of the 21st century.

    Oil mined in the US should be refined and used here, this is in tune with the "all of the above" strategy of huge energy companies. The cost of product sources domestically will drop the at pump price to nearly 30 cent so a gallon. Remember the 60's.

    Oil companies have given no goodwill to the US consumer who has proudly paid them for their work overseas, now however domestic costs should be reflected. Presedence has been set in Venezuala, for cost.

    I would imagine after a few years we can review the needs of the rest of the world, and possibly begin shipments then, but unfortunately due to the extreme urgency of global negatives from carbon based fuels, we must immediately use our domestic resources as cheaply and effectively as required.

    Not continue a price gouging scenario whereby prices vary from street to street and no one is held accountant able for the environmental impacts of burning this stuff.

    pj

  • Report this Comment On June 23, 2013, at 11:02 AM, Fog643 wrote:

    If the USA does not promptly increase its refining capacity (no major new refinery has been built in some 30 yrs), we will have to export crude since we'll have no ability to refine it.

  • Report this Comment On June 23, 2013, at 11:38 AM, kmp65 wrote:

    If we have such an abundance of crude oil, and we are supposingly supposed to be energy independent by 2035, then why are we still spending so much per gallon at the pumps? Tom me it seems all we hear is how good the oil companies are doing, I want to see savings! Like any family in the United States we are spending too much to even afford a daily commute to work.

  • Report this Comment On June 23, 2013, at 12:58 PM, phatandfoolish wrote:

    not sure who or how it was decided that the public's natural resources could be purchased by an individual, but they were wrong. it's time to nationalize these resources.

  • Report this Comment On June 23, 2013, at 1:19 PM, jasonmoxter wrote:

    Where do you think the oil from Alaska has gone all these years. It goes to Japan and China and anyone else that will pay. The oil companies are here for profit not for good will. Every time there is a hiccup in the Middle East, the oil companies raise prices on Americans. It does not matter one iota if warranted or not, just go ahead and stick it to the working public.

  • Report this Comment On June 23, 2013, at 2:18 PM, bugmenot wrote:

    The problem is Obama. He is about to shut down the US coal electricity industry. That will raise electrical power rates by 100% That will raise the cost of rail transportation by 400% (coal supports the rails today). The cost of US goods would increase by 500%! If this happens, there will be a civil war and the Democrat Party will be eliminated. Poor people will certainly take out the elected Democrats. The government instability will be massive. The US will look like Syria or Egypt or Brazil. Obama will have cemented his legacy in world history. Cain killed Able will be second to Obama killed billions!

  • Report this Comment On June 23, 2013, at 2:42 PM, fpl1954 wrote:

    The only way the USA should consider exporting oil is if it's profitable to do so.

  • Report this Comment On June 23, 2013, at 3:05 PM, pigle36278 wrote:

    Perhaps the people at the Fool haven't done much reading. The US has been a net exporter of crude for the last 2 years-meaning oil companies EXPORT more than we import, we are energy independent right now, oil companies simply have to stop selling it all overseas..

  • Report this Comment On June 23, 2013, at 3:21 PM, pigle36278 wrote:

    And, of course, there is the one "It's all Obama's fault" racist in the mix..

  • Report this Comment On June 24, 2013, at 1:07 AM, Gene0001 wrote:

    When the United States becomes self sufficient energy wise, where the cost of fuel for all purposes drop to what they were before we invaded Iraq, then it could be considered.

  • Report this Comment On March 10, 2014, at 12:30 PM, antred wrote:

    @pigle36278

    "Perhaps the people at the Fool haven't done much reading. The US has been a net exporter of crude for the last 2 years-meaning oil companies EXPORT more than we import."

    That is blatantly false. The U.S. is net exporter of REFINED OIL PRODUCTS but it is (and has been since the 1940s) a net importer of crude oil.

    The U.S. presently burns through roughly 18 million barrels of crude per day, only 8 million barrels of which are produced domestically.

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