Should the U.S. Begin Exporting Oil? - FOX 26 News | MyFoxHouston

Should the U.S. Begin Exporting Oil?

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For decades here in the U.S. folks have been so petrified of running out of petroleum we've barely sold any to other nations.

In fact, Congress banned the export of crude 40 years ago and it's still the law of the land.

Of course, no one could foresee the "frack revolution" and the tidal wave of hydrocarbons it continues to produce.

So, Cory Garcia, an energy analyst with Raymond James, is offering a brand new reality.

"You are going to need to export oil or you are essentially going to be flooded with oil in the U.S.," said Garcia who closely monitors the refining industry.

First, there's some explaining to do. Much of the oil gushing out of America's wells thanks to horizontal drilling and hydraulic fracturing is a super light grade of crude..

It's a lot different than the heavier foreign oil most of our Gulf Coast refineries were engineered to process.

And there-in lies a huge, emerging problem.

"This kind of caught the refining industry off guard, caught everybody off-guard," said Garcia who reports that the U.S. has a giant surplus of new super light oil building and not near enough places to turn it into gasoline and other products.

"You are actually going to hit bottlenecks. You are going hit a bottleneck in the refining system," he added.

And when producers can't sell the oil rapidly, the price will very likely drop to a level that threatens a drastic slowdown in drilling and the loss of jobs and prosperity that comes with it.

"It would be so much better and economically smart to be able to export it just as it comes out of the ground," said Art Gelber, a veteran energy consultant.

Gelber says it no longer makes sense to hoard the light frack crude when the U.S. is already exporting gasoline, heating oil and whole range of refined products.

"They love this stuff in Europe. In Europe they can use it, they can take advantage of it,but here in America we are not set up to use it as well," said Gelber.

"We are going to need to export crude or we are going to become a sort of isolated oil market," said Garcia.

And that would be an energy market where people make less money, buy fewer homes, eat less meals out and are more reluctant to hire new workers.

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