US should maintain its ban on oil exports

A Jan 22. article by Edward Cross, president of the Kansas Oil and Gas Association, sounds the familiar song of oil producers in the U.S. to end the export ban on domestic oil because of an oversupply of crude and low prices in America.

The article lays the blame for the glut of oil at the feet of OPEC and states that they are reacting to the oil shale boom in the U.S. which has greatly increased our own production of oil and natural gas. This may sound good, but if we drill deeper we can quickly see that the driving force for OPEC is one country and one country alone – the Kingdom of Saudi Arabia. This article pretends that the world only reacts to what occurs within the borders of America and ignores geopolitics.

The natural enemy of Saudi Arabia is Iran for primarily religious reasons and Iran, while an oil-producing state, is in a much more precarious position than KSA. While KSA can sustain oil down to less than $30 a barrel for a great period of time, Iran is being punished by the world market price right now. Also, Russia, who has been supplying aid to one of the Saudi’s enemies, Bashir Assad of Syria and has cracked down on Sunni fundamentalists in their own region are reeling from the world price of oil.

I’m sure the Saudis are watching the shale gas revolution here in the states, and it certainly is a factor in their decision to keep their spigots open as North American shale needs a break-even point of $65, and we won't see that for several years, which will lead to a shakeout in the oil patch, but many experts believe the real reason for their behavior is because KSA knows that we will never see $100 a barrel oil again, and that technology is catching up with the Age of Oil.

Plug-in hybrid and fully electric cars are quickly getting to the 200- to 300-mile range and have much less maintenance than the cars we drive now. Also, even with the price of gasoline below $2, it is still cheaper to plug into the electric grid for your fuel and it is cleaner for the environment. Also, if you charge from a solar powered charger, your cost per gallon is 80 cents to a dollar. In the next two to three years we will have several choices of vehicles in the $20,000 to $35,000 range that accomplish all this and the Saudis know it.

We don't need to export our oil unless you have stock in companies that make a profit off of it. In fact, in a few years we really are going to need a lot less of this stuff for good. And that’s a good thing.

This story was originally published February 11, 2015 at 9:23 AM with the headline "US should maintain its ban on oil exports."