Why can't Texas export oil when Iran can?

Houston Chronicle ^ | July 16, 2015 | CHRIS TOMLINSON

[thackney]

Now that the international community plans to lift the embargo on Iranian oil, it's time for Congress to lift the one on U.S. oil.

For 40 years, the United States has banned almost all exports of U.S. crude in the mistaken belief that energy independence is the same thing as energy security. The result is that U.S. oil companies are forced to sell their product at a substantial discount to prevailing international prices to U.S. refiners who then export gasoline, diesel and jet fuel at a significant profit.

Congress needs to repeal this misguided federal ban so that U.S. crude can become another source in the international marketplace and diminish the power of OPEC, and Iran in particular, from manipulating it. Depending on how quickly the agreement is implemented, Iran could add 250,000 barrels a day early next year to the global market and add a million more barrels in three years.

When a nation that many lawmakers consider an enemy can sell crude more easily than Texas, there is something wrong in Washington.

There are lawmakers who understand the imperative. Rep. Joe Barton, R-Texas, and Sen. Lisa Murkowski, R-Alaska, are leading the battle to lift the ban, but they are finding that too many Americans, including members of Congress, believe some old myths that need to be dispelled once and for all.

First, many Democrats believe that allowing oil exports will increase the price of U.S. gasoline. While that may sound logical because exports will likely raise the price of American crude while lowering the price of foreign crude, the truth is that U.S. refineries have never given Americans a discount.

[LoneStar42]

Maybe if we knew what EID is.
Sorry.

[Paulie]

Makes sense to me.

I don’t see how our scholars inside the Beltway can justify doing business in every other commodity on an international scale while hamstringing Texas crude.

What are the rules for other oil producing states from OK to ND to AK?

[AFreeBird]

So, export Texas oil, so we can import Iranian oil?

[jpsb]

Congress banned exporting American crude. The idea being that American crude should be used in America for Americans. So the rules are the same for all 50 US states. I think there are a few exceptions where it is just to costly to get the crude to US refineries.

[bestintxas]

We do export oil from Texas. It goes to other states.

Texas could be an international exporter simply by seceding.

[txrefugee]

Seceding is looking better by the day. Texas should just go ahead and ship out the excess oil we are now producing all over the state. Obama can do whatever he wants, totally ignoring the law, so why not?

The U.S. Navy in the Obama reign doesn’t have enough ships to transport our military in a time of war, so it certainly wouldn’t have enough ships to patrol the oceans to intercept oil shipments from Texas.

[thackney]

Crude oil exports are restricted to:
(1) crude oil derived from fields under the State waters of Alaska’s Cook Inlet;
(2) Alaskan North Slope crude oil;
(3) certain domestically produced crude oil destined for Canada;
(4) shipments to U.S. territories; and
(5) California crude oil to Pacific Rim countries.

Crude Oil Exports by Destination
http://www.eia.gov/dnav/pet/pet_move_expc_a_EPC0_EEX_mbblpd_m.htm

[thackney]

We basically have a surplus of light sweet oil (expensive) while we have a lot of Gulf Coast Refineries optimized for heavy sour oil (cheap).

It makes sense to export the expensive and import the cheap.

[conservatism_IS_compassion]

Markets are complex, and trying to manipulate them is foolish. That's why we must lift the export ban and let capitalism work. It will make our oil industry stronger and the global energy market more secure.

Agreed.

But, admittedly off topic, we need a better word than Karl Marx’s “capitalism” to express the above thought.

I, Pencil is an article written in 1958 by Leonard E. Read. This classic article does not use the word “society,” but - in the process of pointing out the breadth of the economic inputs - not only Eberhard Faber and all of the companies which supply it, but also the employees of all the the above and the suppliers of the capital equipment required for those companies, and the infrastructure which provides the needs and wants of the workers for all of the above companies - without which the people who do all that work, wouldn’t be there either. Thus in the big picture it is society, and not merely Eberhard Faber, which makes the pencil.

Again, it is I and not Leonard E. Read who use the word, “society."

I am fully aware, of course, that conservatives are accustomed to checking their wallets the moment someone says “society should” do this or that. They are right to do so. But, in reality, that is an artifact of the systematic reality that

SOME writers have so confounded society with government, as to leave little or no distinction between them

That, at the present moment, is a gross understatement, and it has been so for a very long time. Six decades ago, a public school teacher assigned his class the question, “Does the individual have to obey society?” And, when told that the answer was, “no,” replied that “We use the term 'society' but it doesn’t mean anything else but government.” That was unpersuasive to me at the time, but I did not then know to respond with the quotation above - which continues as follows:

whereas they are not only different, but have different origins. Society is produced by our wants, and government by our wickedness; the former promotes our happiness POSITIVELY by uniting our affections, the latter NEGATIVELY by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher.

Society in every state is a blessing, but Government, even in its best state, is but a necessary evil; in its worst state an intolerable one: for when we suffer, or are exposed to the same miseries BY A GOVERNMENT, which we might expect in a country WITHOUT GOVERNMENT, our calamity is heightened by reflecting that we furnish the means by which we suffer. Government, like dress, is the badge of lost innocence; the palaces of kings are built upon the ruins of the bowers of paradise. For were the impulses of conscience clear, uniform and irresistibly obeyed, man would need no other lawgiver; but that not being the case, he finds it necessary to surrender up a part of his property to furnish means for the protection of the rest; and this he is induced to do by the same prudence which in every other case advises him, out of two evils to choose the least. Wherefore, security being the true design and end of government, it unanswerably follows that whatever form thereof appears most likely to ensure it to us, with the least expense and greatest benefit, is preferable to all others. - Thomas Paine, Common Sense (1776)

My conclusion is that that teacher was a “liberal.” I also had an uncle who was a “liberal” - and who when challenged could not undertake to draw a distinction between “society” and “government.” I generalize those episodes into a general theory, namely that:

1. ”Liberals” systematically conflate “society” with “government.

2. ”Conservatives” (more properly, true liberals) eschew the use of the word “society" because “liberals” have given it a bad odor, and

3. ”Conservtives” have always lacked a proper term for their true meaning when they refer to “the market” or, worse (because coined by Marx as a perjorative) “capitalism.”

4. My conclusion is that the proper word to describe so-called “capitalism” is, simply, “free society.” In a free society, some people elect to take risks in an effort to become leaders. Some fail, and others succeed. But society does not need government to determine which succeed, at what, when, and where.

[laplata]

Excellent! Thanks c_IS_c

[E.G.C.]

BTTT

[1010RD]

I’m interested in the ‘why’. Do you know the history of that? The reasoning I presume comes from central planners.

[1010RD]

Very interesting. Thanks.

[thackney]

The ban came under Nixon if I remember right with the OPEC embargo timing.

Alaska North Slope was banned export when the pipeline was approved. It changed because the West Coast oil glut got so bad it dropped down to ~$3 IIRC.