Domestic oil and gas reserves are at all-time highs. New technologies make previously unaffordable hydrocarbons now cost effective to produce. Domestic demand may be decreasing, but worldwide demand could sustain economic growth for oil- and gas-rich areas in the United States for decades, perhaps even centuries.
With Middle East unrest, especially Iran threatening to close the Strait of Hormuz, the oil-consuming world is taking note of the United States' enormous supply of recoverable oil and gas. Why isn't this abundance of oil and gas being sold on the world market? Why has West Texas Intermediate Crude, the price basis for domestic oil, been recently priced 22 percent less than Brent Crude, the price for international oil? Why such a discrepancy? What's to keep U.S. production from selling on the world market at a higher price?
The Mineral Leasing Act of 1920 and the Outer Continental Shelf Leasing Act prohibit international sales of U.S. oil without a presidential waiver. Exporting domestic oil and gas is banned unless the president allows it. Think the current wind and solar proponent president is interested in signing a waiver to allow exports? Refined products can be exported, but Environmental Protection Agency regulations essentially block the construction of new refineries. Thus, storage facilities in Cushing and around the country are full with no place to go. The price difference between WTI and Brent will likely widen since domestic oil is “bottled up” and President Obama is interested in sunlight and blowing wind, not competent energy policy.
Randy Wedel, Stillwater
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