For those in favor of lifting the country's ban on crude oil exports, the hearing held on Dec. 11 by the House Energy and Commerce subcommittee on Energy and Power was a promising development for the energy industry.
"The committee's decision to start reviewing the implications of lifting the ban in December, instead of waiting to address it during the new legislative session in January, shows how serious many lawmakers are about lifting the outdated law," said Dan Eberhart, CEO of Canary LLC, an oilfield services company based in Denver, Colorado.
At the hearing, a number of lawmakers made a case for eliminating the ban, which was established in 1975 in response to the damaging effects of the Arab Oil Embargo of that era. The US was a limited oil producer at the time the ban was put in place. However, due to the recent shale revolution, the US is currently the world's top producer.
During last week's hearing, Rep. Joe Barton (R–Texas), who introduced a bill to lift the ban earlier in the week, said that the US should capitalize on its status as top producer to bolster the US economy. Eberhart agrees.
"The fact is, we've taken the crown from Saudi Arabia," Eberhart said. "The US is a global power in the oil sector. It shows how much shale has changed the global and gas landscape. OPEC now must share its influence over oil production and prices with the US and Russia. By allowing US producers to start exporting crude oil, lawmakers would further weaken OPEC's ability to impact prices and introduce a reliable supplier of sought-after light, sweet oil to the global market which will leave the US to reap the economic benefits."
The rapidly falling oil price, which recently dipped below $59 dollars a barrel, has left the industry with a tremendous need for US lawmakers to act quickly.
"The revenue opportunities created by exporting crude oil will help offset expensive horizontal drilling and hydraulic fracturing technologies so producers will not be forced to cut production," Eberhart said. "For now, American shale will hold its own, but the oil industry is feeling the impact of the falling prices. Offshore production is going to be hurt first and deeper because it has higher lift costs."
Eberhart said that he is optimistic that the momentum evidenced by the House hearing on the export ban will continue building in 2015.
"At the macro level, the House has been passing legislation but nothing has been happening because of the Senate," Eberhart said, referring to more than 300 bills that were passed by the House in the previous legislative session and then stalled in the Senate. "I think that situation will be different in 2015 when Republicans have a Senate majority."