(Yomiuri: December 17, 2015 – p. 11)
On Dec. 15, U.S. congressional leaders from both the ruling and opposition parties agreed to submit a bill to fully remove the ban on the export of domestically produced crude oil. If the bill is passed, it would end an export embargo that has been in place for about 40 years. Behind this development is the rapid increase in the production of a crude oil known as “shale oil,” which was made possible by advances in drilling technology. Hopes are growing in Japan that the United States will become a stable supplier of oil.
The U.S. government bans in principle the export of crude oil under the Energy Policy and Conservation Act of 1975. After the first oil crisis, the United States decided to place oil exports under government control with an eye to ensuring effective use of domestically produced crude oil. If the bill is passed, the restrictions would in principle be removed.
Crude oil production volume has risen dramatically with the “shale revolution” since the mid-2000s. According to the U.S. Energy Information Administration, the United States was the world’s top producer of petroleum in 2014. Stockpiles increased with the rise in the production of shale oil, which is hard for U.S. refineries to process, and an increasing number of major petroleum developers and others called for the government to lift the ban.
The opposition Republican Party, many of whose backers support the petroleum industry, insists that the ban be lifted completely. This is opposite to the Obama administration, which is focusing on renewable energy. An agreement to submit the bill was reached because the Republicans accepted the extension of preferential tax treatment for wind and solar power, which the Democrats want.
It looks like this will be a boost for the Japanese economy as there is a chance that crude oil prices in the world market will drop further due to the sense that supply is overabundant. According to Japan’s Agency for Natural Resources and Energy, average prices for regular gasoline (per liter) as of Dec. 14 dropped to 126.2 yen, down 1.6 yen from previous week, to mark the lowest price in about 5 years and 11 months.