Resentment is coming out from the oil producers who blame the government for the low crude oil prices which are due to ban its exports. According to them when the crude oil exports are banned, a reaction to the 1970s oil crisis brought on by the OPEC oil export embargo does not seem to have any valid justification now, it should be lifted.
ForexMinute had earlier reported that the ban was then though justified as it was a tit-for-tat legislation to counter the OPEC lobby; it did not seem to have any impact as the US was a net importer of oil. It is believed that the ban formed a part of a range of measures meant to increase America’s oil independence and ensure that foreign powers could not bring the US to its knees.
The measures on the part of the government of the US were then bundled together in the Energy Policy and Conservation Act (EPCA), which came into force in December 1975. Now the same law is being protested by the oil producers in the country who think that as the US is a major campaigner on the world stage for free markets and liberalized economies, EPCA does not seem to fit into it.
Does the US Want to Save its Oil Reserves from Heavy Exploitation?
Moreover, the ban seems to be hurting the American interests more than anything or anyone’s interest and for that reason the oil producers want EPCA to be lifted. The resentment has gone up to the extent that some oil producers believe that their government actually prevents a US industry benefiting the economy through exports.
Nonetheless, with the advent of fracking and new discoveries of more reserves, producers are calling for this ban to be lifted as it is becoming counter-productive for the nation. Also, according to market observers the crude oil export ban removes the incentive from oil producers to invest in delivery systems which could help in lowering the oil prices.
Logic behind the ban on the export of oil is that all the oil in the ground in the US will one day run out; however, if it is protected from heavy exploitation, it can be good for the country. However, according to some observers, it does not seem to hold water as the feasible level of production within the US is much lower than the demand of the country.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org