Tuesday, December 29, 2015

January oil export from Texas first in 40 years from US as ban lifted

Enterprise Products Partners LP, a Texas energy company, plans to load 600,000 barrels of light sweet crude from South Texas into a tanker at its terminal in the Houston Ship Channel during the first week of January.

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Vitol Group, a Dutch firm, is buying the crude. The crude will be sent to a refinery in Switzerland where a subsidiary of the company owns a refinery according to a source familiar with the company. Jim Teague, chief operating officer, of Enterprise's general partner said:
“We are excited to announce our first contract to export U.S. crude oil, which to our knowledge may be the first export cargo of U.S. crude oil from the Gulf Coast in almost 40 years.”
Shell Oil also welcomed the lifting of the export ban and said it considered the move "beneficial to government, industry and consumers, alike." Republicans in Congress argued the ban was obsolete due to the huge increase in U.S. production, much of it due to fracking. The ban was imposed back in 1975 when there was an acute oil shortage in the U.S.
Some environmentalists claimed lifting the ban would be disastrous for the planet since it would increase production. Oil Change International's executive director, Stephen Kretzmann, said:Just days after we all were given new hope in Paris, the empire has struck back. Congress’s response to an historic climate deal? Incentivise further oil production. It’s hard to imagine a clearer example of how far politics still has to go on climate in order to catch up with the science.
This deal to lift the export ban is a disaster for the climate and for American communities that our children will view as a cynical indictment of a corrupt political system not yet willing to confront the powerful interests behind the climate crisis.
However, alternative energy proponents, did get some welcome news as well. Republicans in Congress agreed to extend subsidies for wind and solar energy projects for another five years. The 30 percent tax credit was due to expire next year. The tax credit for wind lapsed in 2014. This will mean $25 billion for the industries. The Republicans also will not block a $500 million payment to the UN Green Climate Fund.
The export ban removal was part of a $1.1 trillion spending measure that will avert a US government shutdown. The bill passed the House by a vote of 316 for versus 113 against. The Senate vote was 65 for to 33 against. The bill will ensure government financing until September of 2016. President Obama signed the bill.


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