U.S. oil demand is set…
Oil prices fell rapidly as…
After conducting an interview with Ken Cohen, the vice president of public and government affairs at Exxon Mobil, the WSJ reported that Exxon has called for a lift of the US ban on exporting domestic oil, first introduced after the Arab oil embargo in 1973.
Exxon has made the plea based on its belief that oil production will continue to grow to record levels in the coming years, and the desire to take advantage of the equally strong growth in global oil demand.
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“We are not dealing with an era of scarcity, we are dealing with a situation of abundance. We need to rethink the regulatory scheme and the statutory scheme on the books,” said Cohen.
In its annual energy outlook, due to be released on Thursday, Exxon predicted that by 2015, the US will be producing more oil from dense layers of rock, than the entire volume produced by OPEC, less Saudi Arabia; and that throughout the world oil production will increase through to 2040, by which time still two-thirds of the Earth’s total reserves will still be untouched.
Booming oil production will be driven by new technologies that are allowing us to extract oil from deepsea deposits, tight rock formations, and even oil sands. Exxon warns that the success of the fracking boom in the US has begun to cause some problems as supply has now outstripped demand, forcing domestic prices down and eating into the profit margins of energy companies.
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Based on the same reasoning, the WSJ reports that earlier in the year Royal Dutch Shell and ConocoPhillips also called for an end to the export ban.
Any movement to have the ban lifted will obviously attract opposition from consumers who will fear that exporting oil will cause domestic fuel prices to rise.
In this year’s energy outlook Exxon has estimated that world energy demand will grow by 35% by 2040, mostly due to an increase in population size and economic growth in India, China, and other developing countries. It claims that despite advancements in renewable energy, oil and gas will meet 60% of our energy needs.
By. James Burgess of Oilprice.com
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…