Inability to Export Crude Could Impede Growth of U.S. Oil Revolution
MESQUITE, Nev., Oct. 23, 2013 /PRNewswire/ — America has surpassed projections of becoming the world leader in oil production by 2020, by being reported to be the world's largest total supplier of oil liquids in 2013, exceeding both Russia and Saudi Arabia. According to the 2013 Energy Outlook by British Giant BP, the U.S. should be nearly self-sufficient by 2030.
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This news is an astounding turn of events to spectators and the oil industry alike, with Tim Dove of Pioneer Natural Resources calling it an "Oil Shale Revolution." This Revolution is considered by many to be America's greatest hope for economic recovery.
However, the ironic obstacle to this economic savior, according to Boron Capital, is the U.S. government's unfriendly energy policies that ban the exportation of crude and give way to over-the-top environmentalism.
"After the disastrous 1973-1974 Arab Oil Embargo that eventually increased fuel costs for Americans by 400 percent, America responded with the Energy Policy and Conservation Act of 1975, which banned the exportation of crude in the United States," Boron Capital CEO Blake Templeton said. "It was meant to be temporary, but this act is still in place and threatens the continued growth of the Shale Revolution, since refineries in the U.S. will soon be unable to handle the increased volume being produced."
According to the EIA, there are 139 operating refineries in the U.S., down from 146 in 2008. In 2008, the average refinery utilization was 85.4 percent. With production of oil increasing 766,000 barrels a day last year, the biggest gain in world history, Templeton expects that America will outgrow oil refinery capacity within 12 to 36 months.
The inability to export oil threatens to impede growth of the industry since oil will be congested without an outlet of exportation.
Templeton says obstinate environmentalism supported by U.S. lawmakers makes building new refineries capable of handling the new production nearly impossible, and hinders pipeline infrastructure to support transportation of oil and gas to refineries.
A new refinery, Arizona Clean Fuels, scheduled to open in 2009, took seven years to get an air quality permit. In 2013, this refinery, among others, remains unopened, due to opposition from environmental groups.
"Some of the environmental upset is warranted like with the proposed Keystone XL Pipeline that has shown lack of both environmental care and lasting domestic economic benefit," said Templeton. "Others, such as the Cactus Pipeline, if they are undertaken with proper environmental measures, will bring great economic benefit to the U.S. "
The Economic benefits that increased oil production brings with it are encouraging, to say the least. In 2011, the oil industry added nearly 150,000 new jobs, which amounted to 9 percent of all jobs added in the U.S. A report by firm IHS Global Insight estimates that the rise in production from unconventional oil plays increased disposable income by an average of $1200 per household, and that number is predicted to rise.
In addition to the boom being good for American citizens, it also reduces oil imports, makes America more energy independent, eases political pressures from the Middle East, and shrinks America's foreign trade deficit, which keeps more dollars in the U.S. versus going abroad.
Templeton suggests, "In order to avoid hindering the economic benefits of the increased oil production, the U.S. will need to overturn the ban on exporting crude and put a limit on unnecessary environmental meddling so that new refineries and pipelines are able to progress, which would support America reaching energy independence by 2030. If the United States plays its cards right, they will go from being the world's largest net oil and gas importer, to the world's largest net oil and gas exporter, like they used to be. And that is a position that carries with it immense economic and political clout."
Boron Capital is a private real estate investment firm based in Mesquite, NV that analyzes conditions affecting the economy and investments. More information about Boron Capital can be found at www.BoronCap.com.
CONTACT: Julie Templeton, (806) 722-4904 or Email.