Why have US crude oil exports surged

The US is benefitting from a shale revolution that in just a few years has transformed the hydrocarbon sector – both for oil and gas. For decades the US had anticipated a bleak future dependent on hydrocarbon imports from often unfriendly nations. Now the talk is of hydrocarbon self-sufficiency. Environmentalists are not necessarily thrilled by the new era of US energy abundance. Deborah Gordon from the Carnegie Endowment for International Peace points out that a transportation future based on fuels other than oil has been postponed. “Oil 2.0 has arrived as if by secret drone. What this means for transportation is “business as usual,” unless radical policy shifts meet new market conditions head on”. Whether you support or decry the revolution, it is undoubtedly underpinning a US economic resurgence because abundant domestic supplies of oil and gas have delivered a cost advantage over the rest of the world in the form of low energy and feedstock prices. But the situation for the crude oil and crude oil product sector is complicated: Firstly when the refinery industry was making investment decisions 10-15 years ago it envisaged a world where heavy crude oil was king. Now that US light crude is king, the refineries are struggling to process the wave of oil and gas – situation made worse by logistical issues with getting the new resources to market. Secondly – Crude oil producers are ramping up pressure to reverse the US ban on crude oil exports. However, the debate for and against the ban is increasingly heated. Crude oil product exporters are one group generally in favour of the status quo – arguing that the ability to freely export crude oil products provides a satisfactory work around to get the hydrocarbon bounty to overseas markets. This view ties in with Obama’s economic and green credentials – which means that at least for now no change