This oil law was sold as climate friendly. It might not be RSS Feed

This oil law was sold as climate friendly. It might not be

Congress can’t claim many achievements these days, but its 2015 decision to lift a ban on crude oil exports and extend tax incentives for wind and solar is reshaping energy markets.

U.S. crude shipments abroad are on the rise. A spike in gasoline prices predicted by critics of lifting the ban hasn’t materialized. And utilities are adding wind and solar to the grid at breakneck speed.

But if the legislation’s impact on energy markets is clear, its implications for climate change are less so. While wind and solar have helped green America’s grid, U.S. oil production is projected to reach record levels in 2018. American refineries are also sending ever-larger shipments of petroleum coke abroad. Petcoke, as the carbon material is commonly known, is a byproduct of heavy crudes refined in the United States. It is frequently blended with coal used in electricity generation.

“Our refineries are creating more CO2 in the developing world, but they are the ones who have to account for it,” said Deborah Gordon, director of the energy and climate program at the Carnegie Endowment for International Peace. “You can clap your hands and say bravo to the U.S. power sector, but it doesn’t mean we can say this offsets that — even in our country.”

The export ban and tax incentives, included as part of a 2015 spending package, represented a rare intersection of conservative and liberal priorities in Congress. Republicans overcame concerns about the impact of subsidies for wind and solar to lift a ban on crude exports they viewed as badly outdated. Democrats set aside worries over the climate impact of crude exports to solidify tax incentives for wind and solar. The largest disagreement at the time was whether lifting the ban would increase gasoline prices.

The bill has largely had the intended effect. U.S. crude shipments abroad totaled roughly 1 million barrels a day in April, up from almost 400,000 at the end of 2015. (The ban did not apply to Canada.) The growing export market has offered a bright spot for oil companies battered by yo-yoing crude prices.

Lifting the ban has also eroded the Organization of the Petroleum Exporting Countries’ ability to set crude prices, said Phil Flynn, a commodities analyst at the Price Futures Group.

Read full article at E&E News