Congressional Leaders Agree to Lift 40-Year Ban on Oil Exports | Hacker News Reader

Congressional Leaders Agree to Lift 40-Year Ban on Oil Exports

wsj.com

32 pointsjonbaer18 comments

Non-pay-walled reporting on this[1].

[1] https://www.washingtonpost.com/news/powerpost/wp/2015/12/16/...

Finally! The ban doesn't make any economic sense to me. It's a free market, let them sell it globally.

Interests of nation as a whole regarding strategically important resources not always align with what the free market will make of them. That's also the reason why a lot of countries subsidize the food industry: if you import food, it means that in the event of war and blockade you'll have to deal with hunger.

It made sense during times of oil shortages, in an Irish famine "Don't export food for profit while the local people starve" sense. While oil prices were rising ever higher, there was a perpetual risk that another oil shock could be round the corner. In the current circumstances though this is clearly the right thing to do.

It was my understanding that the drop in oil price was engineered to screw the Russians. Opening up exports of oil indicates the the leverage on the Saudis has gone stale, and they are making serious noises about limiting production again. Washington needs the ability to keep oil prices low because they have still not found a long term solution to keeping Eastern Europe vaugely NATO friendly.

I somehow doubt that fracking is a CIA plot, or that the Saudis voluntarily gave up hundreds of billions in revenue as a favor to the USA. The Saudis have no intention of cutting production because they know that if oil prices rise, Fracking will ramp back up again, they'll lose commensurate market share and be back where they started. Their best path right now to capturing as much revenue as possible is to exploit their low cost of production by out-producing everybody else.

Where did I say CIA plot? That is a strawman you have erected. The Russian economy was helped substantially over the past decade by rising oil prices, this economic improvement formed the cornerstone of the current Russian administration. When oil prices were slashed, the Rubble fell by half. Suddenly now there are problems at home, and Russian military expansion has been curtailed. Nation states are perfectly capable of grasping the economic importance of certain key resouces for the modern economies and know where to turn the screws to encourage behavior without jumping straight to war all the time. The Saudis did not voluntarily give up billions of revenue, they calculated that the opportunity cost of pissing off America, which has significantly helped keep the royal family in power for decades, would be too high. Not every decision is a straight up comparision of projected revenue numbers, sometimes large and powerful entities take into account expected value as well.

You're quite right of course. My apologies. You didn't give any explanation whatsoever of how it might be done or why they might to it to damage Russia when they clearly couldn't do it to benefit their own economy previously. In fact your allegation was not founded on evidence or any theory of how it was put into practice in any way. I am very pleased to clarify that.

That would require too much coordination among several fairly inept national administrations. I'd bet it on a real macroeconomic trend.

Exactly. What happened was geologists knew about shale oil and gas deposits in North America for years, and then finally someone figured out how to extract it economically given prices in the mid-late 00s, probably because they wanted to make money. They made money, hundreds of firms copied them, and the Saudis responded to the threat of market share loss by pumping lots of oil. There was no centralized decision making in this process, just a bunch of individuals, firms, and governments reading the tea leaves of the oil market independently.

I suppose trade deals would require too much coordination between those inept national administrators. I guess it is also too bad that there are no international standards like TCP/IP becuase that would require coordination as well. And its a good thing there is no coordination, that way we dont't have any international spying programs on citizens.

Yes you are quite correct: the trade deals require an order of decade to make them work, and that's among friendly governments with aligned interests. And true, the successful and now notoriously known spying projects with global reach are mostly single agency efforts.

But I'm not sure why TCP/IP is there: it's an institutional standard adopted later internationally. The IP stack doesn't even quite map to that neat ISO 7 level hierarchy conjured by international panel in their ivory tower.

The ban was almost meaningless. We could export oil products like gas just fine. So, at most this was a minuscule subsidy on US refinery's.

In the long term this is bad for US independence. However, both party's seem to be happy to raise the debt even when the economy is doing great, which is a much worse idea.

How will lifting a 40-year old ban on oil exports reduce the global consumption of fossil fuels which are driving global warming? Given the current existential disaster (aka "global warming") anything which encourages the consumption of fossil fuels is contraindicated.

At least something positive? "In return, Republicans are dropping their opposition to lengthy extensions of the solar and wind tax credits that will give huge boosts to renewable energy projects."

For whom is it positive that these tax credits will end? Not to mention, I find it ironic that Republicans were opposed to continued tax credits for anyone ever...

It's the opposition that is ending, not the credits.

I realize this is now a week old but ...

I am indeed asking about the end of the tax credits. Your comment quotes "lengthy extensions of [...] tax credits" - so apparently, without indefinite extension those tax credits will come to an end at some point.

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