The Eagle Ford Shale region will benefit in a huge way as the oil export ban is lifted.
Related: Oil Export Ban on Its Way Out?
Last week, President Obama revoked the export ban on all petroleum products that was imposed during the 1970s. Many producers and analysts who believed this policy hurt the economy have been fighting to repeal the anachronistic law for many years.
A Rice University study from April reveals that the decades-long oil export ban has had the greatest impact on producers in the Eagle Ford Shale. The study analyzed dozens of crude types on the open market to calculate their potential prices in the absence of trade barriers. Since the oil that is pumped out of the Eagle Ford has less sulpher than WTI or Brent, it should attract a higher price on the international market.
Analysts predict that the impact of open exports will include:
- Increases in GNP by $38.1 billion in 2020
- Enhanced free trade and lower the U.S. trade deficit
- Strengthening of our national security
- Further increases in domestic oil production
- Lower gasoline prices
- 964,000 additional jobs
- Benefits to manufacturing and service-related sectors in every state
- Strengthening national security and America’s position in the world
Kenneth Medlock, senior director of the Center for Energy Studies at Rice University’s Baker Institute for Public Policy, also agrees that the light crude will garner higher prices in the international market because it is of higher quality. Based on their open market values, Medlock calculated that at $100 Brent prices, WTI would trade at nearly $102 while Eagle Ford crudes would fetch prices of $111. And in an unconstrained market, those crudes would already be delivered at a premium according to the Oil& Gas Investor.
Pioneer Natural Resources is already eager to get its product to the world and said they would be able to export crude by mid-2016.
Read more at oilandgasinvestor.com