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Page added on October 4, 2015
President Hillary Clinton Will Oppose Crude Oil Exports
Another Clinton Administration Likely
I know some people cringe at the idea, but Hillary Clinton is the current favorite to win not only her party’s nomination, but the presidential election in 2016. An online Irish bookmaker lists Hillary at 11/8 odds to win the presidency, followed by Jeb Bush and Donald Trump at 9/2 odds, and then Bernie Sanders, Joe Biden, and Marco Rubio at 8/1 odds. (You can even bet on Kim Kardashian at 1,000 to 1 odds of winning the 2016 presidential election).
Some will argue that her unfavorable ratings are too high, but all of the leading candidates have significant negatives of one kind or another. I imagine that Hillary Clinton versus Donald Trump could result in the highest voter turnout in U.S. history — much of it from voters trying to keep the opposing candidate out of office. Others have argued that someone will rise up and knock Hillary out of the lead. That was my exactly feeling 8 years ago during the Democratic primaries when Hillary was in the lead — that Barack Obama would not only win the party’s nomination but would go on to win the presidency. I felt like he could beat McCain, but I didn’t think Hillary could have beaten McCain in 2008. But I don’t see a Barack Obama in the wings this time around. I think it’s Hillary’s election to lose, even though a large fraction of the population loathes her.
Hillary on Energy
Given the circumstances, let’s take a look at Hillary’s energy proposals. As I pointed out during the 2008 election campaign, her energy policy proposals have been rife with pandering and flip-flops. Of course they all do it to some extent. John McCain wasn’t above a bit of both, flip-flopping on ethanol and pandering by proposing a cut in gasoline taxes leading up to the election.
A good example of Hillary’s pandering can be seen in her approach to TransCanada’s (NYSE: TRP, TSE: TRP) proposed Keystone XL pipeline expansion. Back in 2010, then Secretary of State Hillary Clinton was asked about the prospects for the project, which was under review at the State Department. Clinton responded “We’ve not yet signed off on it, but we are inclined to do so and we are for several reasons.” Clinton got a lot of backlash from environmentalists for her stance, as they broadly opposed the project.
The State Department report ultimately concluded that the pipeline would be unlikely to significantly impact global carbon dioxide emissions. And up until recently, Clinton had never expressed any opposition to the project. Back in the summer she dodged a question from a New Hampshire voter who asked “As president, would you sign a bill, yes or no please, in favor of allowing the Keystone XL pipeline?” Clinton’s response was more politically calculating than her 2010 response: “I am not going to second guess President Obama because I was in a position to set this in motion. I want to wait and see what he and Secretary Kerry decide. If it is undecided when I become president, I will answer your question.”
Her position on the issue shifted a full 180 degrees recently in Iowa when she matter-of-factly announced her opposition as if there had never been any question: “I think it is imperative that we look at the Keystone pipeline as what I believe it is — a distraction from important work we have to do on climate change. And unfortunately from my perspective, one that interferes with our ability to move forward with all the other issues. Therefore I oppose it.”
What is behind her flip-flop on this issue? I think the reason is purely political. Senator Bernie Sanders is her closest rival for the Democratic party’s nomination for the presidency, and he has been adamantly opposed to the pipeline. Likewise, Vice President Joe Biden — who hasn’t declared but who has many supporters hoping that he does — has steadfastly stated his opposition to the pipeline. Thus, in order to keep Sanders and potentially Biden from peeling away support from environmentalists, she made the political calculation to rotate to the left on this issue.
Implications of a Flip-Flop
What does this mean? I think it has 2 implications. First, because no major Democratic candidate favors the pipeline, and because the Democrats are favored to win the presidency, unless the Republicans buck the odds then the Keystone XL pipeline project is probably dead.
But there is another implication in my opinion. Opponents have cited various objections to the Keystone XL pipeline, but the truth is that the pipeline is really all about climate change. Environmentalists believe the pipeline would be furthering a fossil-fuel dependent global economy that is leading to a climate catastrophe. And it turns out there is one more energy issue with similar characteristics working its way through Capitol Hill.
The U.S. has a crude oil export ban in place that dates to The Energy Policy and Conservation Act (EPCA) of 1975. This energy bill was a response to the 1973 OPEC oil embargo, and contained measures designed to enhance U.S. energy security. One of the measures of the bill effectively bans crude oil exports to all countries besides Canada.
Thirty years later, as domestic oil production surged as a result of the shale oil boom, the export ban began to limit the markets for domestic producers. While the U.S. is still a large net importer of crude oil, U.S. refiners spent billions of dollars over the past 2 decades to install equipment to process heavy sour crudes. The crudes that have come online in the shale fields of the Bakken and Eagle Ford are relatively light. Thus, US refineries are limited in the volumes of this crude they can process.
As a result, the benchmark for U.S. crude oil — West Texas Intermediate (WTI) — which historically traded at a premium to internationally-traded Brent crude, began trading at a discount. To rectify this, oil producers and politicians in major oil-producing states began lobbying for an end to the crude oil export ban so some of this light oil could be exported — which would improve market conditions for domestic oil producers.
Beneficiaries of the Crude Export Ban
Not everyone in the oil industry favors ending the ban. Refiners, in particular, have benefited from the ban. Because there is no ban on the export of finished products (e.g., diesel, gasoline, etc.), U.S. refiners can buy discounted domestic crude oil and then export the finished products at very healthy margins. Thus, major refiners like Valero have come out strongly against ending the ban.
Some believe that the President’s opposition to the repeal is also a nod to the U.S. Steelworkers union, which opposes ending the ban because of the potential loss of refinery jobs. Ending the ban would in fact likely decrease the margins for refiners, while boosting the profits of the domestic oil producers that supply them.
Nevertheless, there is significant support for ending the ban. Energy Secretary Ernest Moniz has said that the ban should be revisited. Senate and House bills have been introduced to end the ban, and the House Energy and Commerce Committee recently voted 31-19 in favor of ending it. But following the vote, the Obama Administration came out against ending the ban, citing the potential for higher U.S. gasoline prices.
As with the Keystone XL pipeline, the president’s opposition is really about climate change and the continuation of a fossil-fuel based society. A number of studies — including one done by the Energy Information Administration — have concluded that ending the ban wouldn’t increase gasoline prices. The EIA reported: “Petroleum product prices in the United States, including gasoline prices, would be either unchanged or slightly reduced by the removal of current restrictions on crude oil exports. As shown in a previous EIA report petroleum product prices throughout the United States have a much stronger relationship to Brent prices than to WTI prices.”
What is likely is that some places (like the Midwest) would see higher gasoline prices, other areas (perhaps coastal markets) would see lower prices, and the net effect would be neutral to slightly lower prices. But when you understand that the real basis of the opposition to ending the ban is the same as the basis of the opposition to the Keystone XL pipeline, then you understand that the gasoline price argument is simply a politically convenient cover.
Conclusion: No Repeal of the Crude Export Ban
What does this have to do with Hillary Clinton? One of my 2014 predictions was that the crude oil export ban would not be overturned by President Obama, on the basis of the same stiff opposition from environmentalists that paralyzed him on the Keystone XL pipeline issue. Thus, since Hillary is the odds-on favorite to win the presidency and given her new-found opposition to the Keystone XL pipeline, President Hillary Clinton will likely follow the same path of on the export ban in order to appease environmentalists in the Democratic party. Refiners will be very happy, while domestic crude oil producer will continue to have their markets restricted.
By Robert Rapier
27 Comments on "President Hillary Clinton Will Oppose Crude Oil Exports"
BobInget on Sun, 4th Oct 2015 1:41 pm
and a damn good thing too.
http://crudeoilpeak.info/asias-oil-consumption-at-record-high-while-production-peaked-in-2010
BC on Sun, 4th Oct 2015 2:36 pm
Apart from exporting to the increasingly stretched Anglo-American imperial military around the globe, there won’t be any surplus “oil” to export.
Go Speed Racer on Sun, 4th Oct 2015 3:34 pm
Damn, that was official, PRESIDENT HILLARY CLINTON. Well, she is mighty pushy. If she can’t win it fairly, she’ll just pay somebody to hack the electronic voting machines.
Georgino on Sun, 4th Oct 2015 3:42 pm
The bookies have her at 4/11 for the nomination and unlike the pollsters they are putting their money where their mouth is. In the general if the turnout is over 125 million she wins. It’s that simple. The rest is noise.
Rodster on Sun, 4th Oct 2015 3:53 pm
“The bookies have her at 4/11 for the nomination and unlike the pollsters they are putting their money where their mouth is. In the general if the turnout is over 125 million she wins. It’s that simple. The rest is noise.”
At this point it doesn’t really matter who’s elected these days. For the last 20-25 years we’ve seen the shadiest characters become POTUS. If she gets elected I won’t be shocked.
The populace is just a reflection of those running the show. Always has been the case and will always be that way.
rockman on Sun, 4th Oct 2015 4:10 pm
And again the US has no oil export ban. As of the latest number from the govt the US was exporting oil in July at the rate of 191 MILLION BBLS OF OIL PER YEAR. The is no ban on exporting oil so there is no lifting of an oil export ban or her to oppose.
But lets not forget the US is THE largest exporter of refinery products in the world: the equivalent of 1 BILLION BBLS OF OIL PER YEAR according to the govt. No country supplies more FGF producing motor fuels then the US.
Or a better question for Hillary: is she going to continue granting oil export licenses for the same volume that President Obama is currently granting? And will she continue to allow US refineries to export more GHG producing products then any other country on the planet? And will she allow the continued export of record amounts of US coal with most of that volume coming federal govt…leases from which it has received $BILLIONS in royalty payments?
BTW US refineries have to blend light oils wit heavy oils since they only crack oils with a very narrow gravity range of 30-32 API. Prior to the lite oil boom US refineries had to import a lot of lite oil for blending.
Plantagenet on Sun, 4th Oct 2015 5:42 pm
Who really cares if Hillary has flip flopped on her positions on the Keystone XL Pipeline and on exporting US crude to fight off the challenge from Sanders? After she is elected she can just easily change her positions back to where they were to start with.
CHEERS!
makati1 on Sun, 4th Oct 2015 7:53 pm
And when has any Prez hopeful ever carried out their pre-election promises? Lies, lies, and more lies, and the sheeple fall for them every time. Says something about America doesn’t it?
Not worth reading. Liars, psychopaths, egoists, and all in the same package.
BC on Sun, 4th Oct 2015 8:29 pm
Dame Hilbillary for POTUS and Slick for Veep AND First Gentleman. How could it get any better? 😀
Algore for Energy Secretary.
Rubin for Treasury Secretary.
A black Jewish, lesbian for AG.
Caitlyn Jenner for HHS Secretary.
A newly outed lesbian general for Secretary of Defense.
Former oil company exec (or female VP) for EPA head.
The best days of Anglo-American empire are ahead of us. Long live the Dame! Long live empire!
Give us Hilbillary, or give us death! 😀
MrNoItAll on Sun, 4th Oct 2015 8:50 pm
At least we KNOW that Hillary won’t be getting an illicit BJ in the White House. How many of the other candidates can we honestly say that about? And most importantly, do we even care?
antaris on Sun, 4th Oct 2015 10:14 pm
MNIA, wasn’t their an old joke that Hillary got more pussy than Bill? Maybe she will get the tongue as Pres and then her and Bill wil be even.
MrNoItAll on Mon, 5th Oct 2015 1:27 am
antaris — In hopes of that, I’ll probably end up voting for Hillary.
JuanP on Mon, 5th Oct 2015 6:02 am
I couldn’t finish this article. I don’t think the KXL pipeline is important enough to the big picture and I don’t like politics. As far as Hillary goes, I think she is a narcissistic, megalomaniacal, sadistic bitch. She’d probably make as bad a president as all the other ones we’ve had in the USA since I got here 25 years ago. If I could believe Bernie Sanders would change anything, I might prefer him over all the other horrible candidates we have, but I am not that optimistic. IMO, the US political, social, economic and financial systems are broken beyond repair. I think there is complete certainty that no matter who wins the next elections in the USA, the next American government will be the most corrupt, violent, and agressive in this country’s short history. I refuse to get involved in the political process and play a role in that. I am doing what Pilates did and washing my hands of this whole nefarious affair.
I have never believed in democracy as a political system. Any political system that lets the masses decide their future or their leaders is bound to fail because most humans like the necessary intelligence, knowledge, mental health, and common sense to choose good leaders or policies. Throughout human history democracies have always failed, going all the way back to the greeks; there has never been a long lasting, successful democratic government.
I can understand, though, how people with less intelligence, education, mental health, and common sense would believe in democracy. It is just one more of those frigging unbelievable lies that normal people tell themselves when they wake up in the morning, “We are smart and educated enough to rule ourselves and determine our destinies with success. We can do this! Yes, we can!”
makati1 on Mon, 5th Oct 2015 6:24 am
JuanP, I stopped voting when Regan ran. There has been nothing but actors and con artists in the office since then.
I agree. The US is in the shitter as far as their government, economy and financial system is concerned. And the number of it’s citizens, worth saving, is dwindling in numbers daily. They cannot get off the couch to save themselves. The most armed citizenry in history and they still cannot do what the French did when it got this bad. So much potential, all wasted.
Davy on Mon, 5th Oct 2015 6:38 am
Juan, human’s should never have grown to the population size that we need such institutions. We need to go back to being tribal and semi-nomadic. Some may scoff at that but looking around that is likely where we are heading.
In the meantime democracy is a failure as well as anything else out there. We know the US system is broken. We discuss that ad nausea on this board daily. We should call this board Peak anti-American commentary dot com.
Then you have a mafia state in Russia with a dictator that is robbing their people blind. How about the geriatric group of ex-communists toying with capitalism and destroying a once beautiful and sustainable country. Let’s see then the third world that is a complete and utter wreck of overpopulation, corruption, and ecological destruction. Pretty much humans can’t organized effectively and sustainably above the tribal except in short burst of all the right conditions.
BobInget on Mon, 5th Oct 2015 8:23 am
With acknowledgment to President Putin.
http://www.livecharts.co.uk/MarketCharts/crude.php
I believe Suncor’s bid to buy COSWF Canada’s second biggest oil sands miner also put a spike under the seat of oil prices.
Oh, BTW Rockman, Saudi Arabia’s new refinery in Port Arthur does heavy oil.
http://www.nytimes.com/2013/04/05/business/texas-refinery-is-saudi-foothold-in-us-market.html?_r=0
Today’s oil sands merger puts Canada in direct
long term push pull with Canada.
BobInget on Mon, 5th Oct 2015 8:29 am
* refer to Canada’s ‘Energy East’ pipeline that
makes XL moot.
Of course Hillary comes out against Keystone.
Suncor has two refineries in Denver that also handles heavy oil sands output.
Rodster on Mon, 5th Oct 2015 9:13 am
Picking sides whether the East is better than the West is pointless. We live in a shithole world thanks to TPTB. As they say “divide and conquer” thru nationalism. China and Russia are NO better than the fuckups that run the Evil Empire in the US.
The end game by TPTB is to join hands and become one for precisely this very same reason, that one country should not dictate or be better than another nation.
JHK, posted an excellent blog this morning, entitled “Syriasly”.
http://kunstler.com/clusterfuck-nation/syriasly/
zoidberg on Mon, 5th Oct 2015 9:29 am
Why would anyone assume what Hillary says is honest? Only fools trust liars. Americans best bet is to vote for trump. ALL career politicians aren’t in it do the public service. And yes that includes Sanders and Ron Paul, everyone of your favorite pols is in it for themselves and those who own them.
Might as well wonder about the thought processes of cats. It’s pointless. Shell do what she’s told when she’s told to do it. She doesn’t even know what she has to do yet, but she’ll do anything for power.
makati1 on Mon, 5th Oct 2015 9:49 am
Ditto for Trump. And he too will jump to the tune of his masters. They are all a sick joke.
makati1 on Mon, 5th Oct 2015 9:52 am
Rodster, but some of those ‘shit holes’ will come out of it smelling a lot better than the West. And a one world government is not going to happen, no matter what druggie dreams the psychopaths at the top think. 200+ reasons why and they are all countries.
makati1 on Mon, 5th Oct 2015 10:12 am
More about the hunger games…
Those who know Fiorina best aren’t giving to her
Carly Fiorina endorses waterboarding ‘to get information that was necessary’
Hillary Clinton Gets Endorsement Of National Education Association
Who Owns Your Candidate?
Koch Brothers, Other 2016 Mega Donors Warm To Carly Fiorina
Trump vs. Fiorina vs. Obama on Isis; Fiorina and the “Law of Bad Ideas”
Donald Trump says arming more people would cut deaths in mass shootings
Trump: Middle East Would Be More Stable With Saddam and Gadhafi
http://ricefarmer.blogspot.fr/
Enjoy!
Rodster on Mon, 5th Oct 2015 10:30 am
“Rodster, but some of those ‘shit holes’ will come out of it smelling a lot better than the West.”
I beg to differ. I guess you didn’t read the article regarding unrest in China after 100,000 were fired. China is on borrowed with their MASSIVE QE programs and debt just to build phantom shit so their people stay busy and keep the hamster running in the cage. Russia’s economy is going down as well.
I’m an equal opportunity hater but if you think there are going to be ANY winners when the financial world goes MAD-MAX, you might want to rethink that. Every is on the same lifeboat fleeing the Titanic. It’s all global and the world is too interconnected for this or that country to be better off than the rest.
Davy on Mon, 5th Oct 2015 11:24 am
Thank you rodster, I am also a equal opportunity hater. If I come out as a flag waiver it is because their is so much that insults my intelligence here in regards to the anti-American and anti-western agenda.
The U.S. foreign policy is a complete failure. It is indefensible and has no equal but please don’t shove a new failure down my throat and that is what the the anti-Americans super heroes are.
War is a failure period and leads to more failure. Putin is going to bleed in Syria as he is in Ukraine. He is still payng for Crimea that is a mess.
I want to focus on dooming and prepping and less on the geopolitical mud wrestling but people love a good fight and easily get bore about important things like survival in a collapse.
makati1 on Mon, 5th Oct 2015 9:46 pm
Rodster, I don’t discount China’s problems, but they are not like those in the US. And, if you think they are bad, wait until your masters have to call out the military in the US to put down the riots coming there. Why do you think your local police are looking more and more like the National Guard? You ain’t seen nothing yet.
Russia is also going to fare better. You know why? Because they are still self-reliant, thanks to their being isolated from the Western disease of consumption. They also have vast natural resources left to live on without the Western countries that desperately want to plunder them.
No, China and Russia are going to be so close that they will seem like one country in another 10 years, IF we last that long.
What Westerners, and especially Americans, cannot seem to grasp is that many countries will barely notice an economic collapse. When you never had electric, you don’t notice when the power plant goes out. When you don’t own a car or motorcycle that uses petroleum products, you don’t care about the price of oil. When you don’t own a can opener because all of your food comes from your garden/farm or the wet market in town, you don’t notice when those cans are not available. THAT is how most of the 7+ billion people live. It is only maybe 1/3 of those 7+ billion who will miss can openers and electric. And most of those are in the West, especially America. The higher on the ladder, the harder the fall.
Davy on Tue, 6th Oct 2015 1:58 am
China’s Communist-Capitalist Ecological Apocalypse
http://www.truth-out.org/news/item/31478-china-s-communist-capitalist-ecological-apocalypse
This article seeks to explain why China’s environmental crisis is so horrific, so much worse than “normal” capitalism most everywhere else, and why the government is incapable of suppressing pollution even from its own industries. I begin with an overview of the current state of China’s environment: its polluted air, waters, farmland and the proximate causes, including overproduction, overdevelopment, profligate resource consumption, uncontrolled dumping and venting of pollutants. I then discuss the political-economic drivers and enablers of this destruction, the dynamics and contradictions of China’s hybrid economy, noting how market reforms have compounded the irrationalities of the old bureaucratic collectivist system with the irrationalities of capitalism resulting in a diabolically ruinous “miracle” economy. I conclude with a précis of the emergency steps the country will have to take to take to brake the drive to socio-ecological collapse, with dire implications for us all.
rockman on Tue, 6th Oct 2015 6:33 am
“…refer to Canada’s ‘Energy East’ pipeline that makes XL moot.” As also done by all the other pipelines and transport systems that have allowed Canada to consistently export record volumes of oil sands production to the US.
The future of KXL, even if the permit is eventually granted, remains to be seen. A reminder: KXL was never going to be built unless a sufficient number of producer subscribed (commit a guaranteed volume) to the project. There is a fixed time period for subscription to be made…a time period that has been continually extended since there has never been enough commitment to build the northern leg of KXL. Commitments that all the other new/expanded pipelines received. IOW all the oil coming out of the oil sands fields today is already dedicated to those other transport systems: there is no oil available to ship thru the northern leg of KXL as long as those contracts are in place. And as long as oil prices stay at current levels it’s very doubtful IMHO this segment will be built even with fed approval.