New technology for exploiting U.S. shale reserves and the worldwide glut of petroleum, sending gasoline prices to new lows, helped U.S. oil companies realize their long-sought goal of re-entering the world market with U.S.-produced crude.
“Today, the American people can cheer the House and now the Senate for putting the nation’s energy needs ahead of politics,” American Petroleum Institute President and CEO Jack Gerard said in a prepared statement, shortly before President Obama signed the annual appropriations bill Dec. 18 including the repeal. “This is a historic moment in our energy renaissance. Lifting this ban will help put downward pressure on gas prices, create jobs, grow our economy and lower our trade deficit.”
Despite that optimism, lifting the export ban comes as Saudi Arabia and others in the Organization of Petroleum Exporting Countries (OPEC) have gone to the mat to compete with U.S. shale oil production, pumping their reserves at cheaper prices to maintain market share.
Congressional Republicans and Democrats from oil states supported the move, so much that they agreed with Democratic lawmakers and the Obama administration to extend tax credits by five years for solar and wind energy equipment manufacturers. Those credits had been intermittent for years, especially for wind energy developers whose companies have gone through booms and busts because of tax policy changes.
Old-line energy producers and conservative policy groups had tried to kill subsidies for renewable energy. That solar and wind tax credits not only survived but were given a five-year extension to 2021, even surprised their advocates.
“Yes, unexpected. Kind of like when the dog catches the mail truck,” said Doug O’Malley of Environment New Jersey, which has been pushing for offshore wind farms.
The tax credit extension is a big boost for offshore wind developers, said Paul Gallagher, chief operating officer of Fishermen’s Energy, Atlantic City, N.J., which has been struggling with state regulators to get approved for a $222 million project of six turbines to generate 24 megawatts about three miles off the city beaches.
The tax credit “is a great help. It will lower our cost of financing,” Gallagher said. — Ashley Herriman and K. Moore