HOUSTON — The Singapore-flagged tanker BW Zambesi set sail with little fanfare from the port of Galveston, Tex., on July 30, loaded with crude oil destined for South Korea. But though it left inauspiciously, the ship’s launch was another critical turning point in what has been a half-decade of tectonic change for the American oil industry.
The 400,000 barrels the tanker carried represented the first unrestricted export of American oil to a country outside of North America in nearly four decades. The Obama administration insisted there was no change in energy trade policy, perhaps concerned about the reaction from environmentalists and liberal members of Congress with midterm elections coming.
But many energy experts viewed the launch as the curtain raiser for the United States’ inevitable emergence as a major world oil exporter, an improbable return to a status that helped make the country a great power in the first half of the 20th century.
“The export shipment symbolizes a new era in U.S. energy and U.S. energy relations with the rest of the world,” said Daniel Yergin, the energy historian. “Economically, it means that money that was flowing out of the United States into sovereign wealth funds and treasuries around the world will now stay in the U.S. and be invested in the U.S., creating jobs. It doesn’t change everything, but it certainly provides a new dimension to U.S. influence in the world.”
Like just about everything else in the oil and gas business, petroleum exports are contentious. The oil bounty is thanks to modern production techniques including hydraulic fracturing, or fracking, which involves injecting water and chemicals into the ground to crack oil-saturated shale. Exports would mean more of that.
Many environmentalists say fracking operations endanger water supplies or create other hazards, including air pollution. Ramping up exports of fossil fuels, critics will surely note, is inconsistent with the Obama administration’s push for a global climate deal.
Independent refiners argue that exports could mean more expensive domestic oil for them, which they say could mean higher prices for American consumers.
Oil companies, and many independent economists, say just the opposite is true, because American exports would add to global supplies and lower international oil benchmark prices that ultimately determine the rise and fall of American gasoline prices. And with Russia causing mischief in Europe and the Middle East in turmoil, many analysts say allies would be happy to have a dependable supplier of oil.
The oil companies appear to be grinding out a road to victory just as they have gained momentum in promoting natural gas exports against the opposition of some chemical companies and environmental groups that want to curb drilling and fracking. The Energy Department has begun a major study on the merits of exports, and how they would affect American consumers and United States energy security. Their previous study on gas exports backed the industry position.
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