Just before adjourning on December 18, 2015, the US House and Senate voted to lift the 40-year export ban on domestically produced oil.
The push to lift the ban originated in the Oil Market Conditions Bill H.R. 702 introduced in the House in February 2015, where it was then held up for 10 months. Nevertheless, a bi-partisan group of representatives amended its principal idea to the 2016 Consolidated Appropriations Package, also known as the 2016 Omnibus Spending Bill. This bill is likely to be signed by President Obama once the House version is reconciled with the Senate version early in 2016.
The original domestic oil export ban was enacted in 1976 to protect the US markets from the global oil shortages. However, it had unintended consequences on the US oil producers by limiting access to global markets and the ability to sell excess inventory not shipped to US refineries. Moreover, the oil producers were faced with transportation challenges associated with shipping domestic oil to distant refineries, some of it via oil trains. The pressure on the export ban increased as the domestic oil production skyrocketed beginning in 2008 due to the use of shale oil extraction technologies.
Lifting the domestic oil export ban will help to restart domestic oil production and facilitate more efficient transportation of oil to the nearest port. This important development will spark additional demand for infrastructure and shipping, as well as associated environmental services such as emissions monitoring and control, air quality studies, compliance and permitting, impact and risk assessment, spill response and planning, environmental investigations, occupational and community health, and species/habitat surveys.
Comprehensive environmental stewardship programs encompassing these services will be key not only to regulatory due diligence, but also to ensuring a reduced environmental footprint of domestic oil production.
How can GHD help?
GHD provides a wide range of technical services focused on environmental aspects of oil exploration, production, and shipping. For more information on the bill, contact Andrew Pawlisz | andrew.pawlisz@ghd.com | +1 972 679 7872.