Lifting the Ban on Oil Exports
The recent budget deal lifts the ban on exporting US crude oil. This comes at a time when there may simply be no buyers. West Texas Intermediate(WTI) closed higher than Brent Crude for the first time in years. Several tankers trying to deliver crude from the mid east to Great Briton turned around when they could find no buyers. Several tankers are anchored in the Gulf of Mexico to import crude to the US, once again no buyers. Some oil production in the US may be forced to shut down because there is a shortage of storage. China has surplus of refined oil which they are trying to export without much success. With the lifting of sanctions Iranian oil will hit the market after the first of the year. The Saudis continue to produce because they need the revenue to keep their government solvent.
While peak oil was real we may have reached peak demand first. BMW has announced it will be all electric or hybrid by 2020. After it’s diesel scandal VW is directing most of it’s R&D to electric vehicles. I would be willing to bet that US automakers are doing the same. The skeleton in the closet is lithium for the batteries. Tesla is building a huge battery plant in Nevada but so far has failed to find a reliable a reliable source of Lithium. There is also the infrastructure problem. The infrastructure for distributing fossil fuels was built by the oil companies. The electric utilities have no real incentive to do the same for electric vehicles.
And we can’t forget alternative energy sources, wind and solar. While big energy politicians in the US continue to fight renewable energy the Chinese are already taking steps to become the renewable energy leaders leaving the US in the dust.