Monday, October 12, 2015

One reason for the attempt to allow the export of Crude oil?

My thought is that this is a way for oil drillers and shale oil miners to stay in business and not go bankrupt during these times. So, by exporting crude oil other countries might be able to process it for less than U.S. refiners can.

However, the other way to look at this is this will only harm local oil refiners when some who can refine so cheaply on ships 20 miles off the coast that they can compete with U.S. refiners and thereby put them out of business. So, for this reason I think this is counterproductive in the long run because refining is a much more expensive business to set up than drilling or shale oil mining. So, by doing this we could lose refining capacity (the capacity to refine oil) here in the U.S. over time by doing this. Because cheaper refiners off shore could undercut them in the same way sawmills were put out of business by ship mills out past the 20 mile limits in the ocean who then milled and then sold milled timber back to the U.S.

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