Months after the triumphed in overturning an , a group of independent producers wants to take policy one step further and curtail crude imports.
The has begun campaigning for quotas on all foreign suppliers excluding Canada and Mexico. Its founders, Texas and New Mexico oilmen, said Saudi Arabia is trying to crush their industry and it’s time to fight back.
“It’s not fair and it’s not free when a country is trying to drive individual producers in the United States out of business,” said Tom Cambridge, an oil producer in Amarillo, Texas. “What we would like to do is limit imports.”
The push comes two years after crude first dropped below $100 a barrel. In late 2014 and other Opec members resolved to keep taps open despite falling prices, hastening bankruptcy for dozens of US producers.
Since then the Middle East’s share of world oil supplies has risen to 35 per cent, the highest since the 1970s, according to the International Energy Agency. The number of US oil drilling rigs has dropped 78 per cent to 357, according to Baker Hughes.
The US recently imported 8.1m barrels per day of crude oil, 11.2 per cent above last year. US refineries processed 16.6m b/d of crude, roughly unchanged from 2015.
US oil companies to abolish a 40-year-old ban on crude oil exports in December. But leaders of , named for northern Texas’s Panhandle region, said that was not enough.
“Did lifting the export ban achieve the objectives, which were new or expanded jobs? No,” said Daniel Fine, adviser to the initiative. “This is another tool to support US domestic producers to put people back to work, to end the bust conditions.”
The group wants the next US president in 2017 to declare a ban on imports of the type of light crude abundant in US shale formations, then phase in quotas on heavier oil. Almost half the crude processed by US refineries is imported.
Mr Fine cited precedent in a by US president Dwight Eisenhower that put a lid on oil imports for national security reasons. President Richard Nixon the restrictions in 1973 as the US veered towards an energy crisis.
The oil industry has given the Panhandle group a mixed reception.
In a letter to Mr Cambridge, the Texas Oil & Gas Association and four other trade groups opposed a quota because it “violates our principles of promoting free trade and would certainly lead to unidentified and unmanageable unintended consequences”.
But Alex Mills, president of the Texas Alliance of Energy Producers, which represents more than 3,000 independent producers, said: “limiting oil imports is good energy policy and good economic policy and good national security policy,” adding his group was still learning about the initiative.
The Independent Petroleum Association of America said it had not taken a position on a fee or tax on crude imports, but backed a “free market system” as the best way to support the industry.
