Energy Secretary Ernest Moniz has weighed in on the question of whether the US should loosen export restrictions on domestically produced crude oil, suggesting that the export regime may be “outdated” at a Platts event on 12 December. So it was only a matter of time before someone in congress objected, loudly, to an Obama administration official hinting at the potential approval of sending more US oil to other countries.
Senator Robert Menendez (D-NJ) penned a letter to President Barack Obama on Monday “to express [his] deep concerns” over Secretary Moniz’s comments.
“Easing this ban might be a win for Big Oil, but it would hurt American consumers.”
“The world price of oil (otherwise known as the Brent crude price) is currently about $110 per barrel, while the American price is about $97 per barrel. The threshold question then, is why would we want to export oil and raise American oil prices to match the world’s oil price? Big Oil clearly wants to pad their record profits and fetch a higher price for their oil.”
“We must continue to keep domestically-produced crude here to lower prices for consumers.”
As we’ve written before, the relationship between US oil prices and domestic gasoline prices is just not that simple. A protectionist export regime is by no means a guarantee of lower prices at the pump.
For more on this issue, see Without Exports, US Could Face Oil Supply Glut in 2015