HOUSTON -- Ever since the 1970s, when international oil boycotts threatened the U.S. economy and produced around-the-block waiting lines at gasoline stations, a ban on oil exports has been at the heart of national energy policy.
Now, if a congressional deal holds up and President Barack Obama agrees as is expected, that policy is about to be reversed.
With the world overflowing with oil, it is unlikely the repeal of the ban will have a big immediate impact on crude prices or suddenly lift the American oil industry out of its tailspin of bankruptcies, and job losses.
Oil prices have sunk by nearly two-thirds since summer 2014, and the price of the American benchmark crude fell an additional $1.76, to $36.75, on Wednesday. Global storage is full to the brim; Iranian exports are about to hit the market and global trade is slowing, so few experts see a big expansion of markets anytime over the next year at least.
But for oil executives, the deal was the culmination of a long-sought goal, even if it will take time to help them much.
"It will mean more jobs, more drilling," said Scott Sheffield, chief executive of Pioneer Natural Resources, which is based in Texas. Sheffield, a leading advocate for lifting the ban, added: "That helps the entire economy, energy security; it helps with our allies, it will help our trade balance. To me it's very, very big,"
Oil executives and other experts also said that the repeal would open new markets for American oil in Mexico, South Korea, Japan and China over the next several years, easing those countries' dependence on unstable supplies from the Middle East, North Africa and Russia.
And most immediately, lifting the ban should give some American oil companies a few modest new markets and a bit of extra flexibility that might be the difference between shutting off some production in places like Texas and North Dakota and eking out a bit of cash to keep the taps on.
"Connecting U.S. oil production to global markets will have immediate national security impacts," said David Goldwyn, who was the top energy diplomat in the State Department during the first Obama administration, "and as the market recovers, it will enable struggling American companies to meet rising demand."
Environmentalists have long opposed the change in policy, contending it will encourage more drilling and production when they say the world should be shifting to renewable energy. They say more oil production means more hydraulic fracturing, air pollution and threats to local water supplies. That is why Democratic lawmakers insisted that the repeal be accompanied by an extension of tax credits for wind and solar energy.
The promise of those extensions — along with those aimed at promoting the development of biofuels, especially those derived from nonfood sources — prompted a collective sigh of relief among clean-energy executives and investors.
Stock prices, which had tumbled in recent months in the face of volatility in the sector, rallied. SolarCity, for example, was up about 30 percent to around $52 in the afternoon, practically double where it was a month ago, while SunEdison, whose stock has languished below $10 since September, had climbed roughly 30 percent to above $6.
The production tax credit for wind, which had expired at the end of 2014 and helped bring the cost of wind power near or below that of conventional fuels in many parts of the country, is to be extended retroactively until the end of next year and then decline in value each year until it is phased out in 2020. The investment tax credit for solar, which was to decrease to 10 percent, from 30 percent, at the end of next year, is to stay at 30 percent until 2019 and then gradually step down until 2022.
Energy policy experts said that the agreement allowed Republicans and Democrats to claim victory, but was also a sign that the transition to a lower-carbon economy promised in the Paris climate talks was already an industry reality.
"Extending the wind and solar tax credits for the rest of the decade allows the White House to say they have provided businesses certainty to expand renewable investment," said Paul Bledsoe, a former Senate Finance Committee staff member and Clinton administration climate official. "Republicans can now say they phased down the renewable energy tax credits to zero in five years, ending subsidies many of them opposed."
But energy experts said it was the repeal of the oil export ban that carried the most symbolic weight. They noted that conditions in the global oil markets could change suddenly at any time, given the instability of North Africa, the Middle East and in other major producing countries like Venezuela and Nigeria. American oil on world markets could serve as a buffer for future shocks.
Lifting the ban, they said, sends a telling message to President Vladimir Putin of Russia that the United States can push for stronger sanctions against Russian oil without jeopardizing the economies of countries that buy its oil, especially in Europe. It also means that if Iran does not comply with its nuclear agreement and sanctions are snapped back, Iranian customers like India and Japan can look to the United States as an important new oil source.
"The U.S. crude oil export ban is the symbolic manifestation of the historical trauma of America's experience of the 1973 oil embargo," said Amy Myers Jaffe, executive director of energy and sustainability at the University of California, Davis. "Taking this law off the books reflects the new reality of America's energy power."
The repeal would have been unthinkable only a few years ago, when domestic production fell year after year until the shale revolution took hold in 2007 and 2008. Using hydraulic fracturing to blast through hard rocks with water, sand and chemicals, the industry began to produce in fields that had been largely worthless. Oil production nearly doubled by early this year to more than 9 million barrels a day, replacing most imports from the Middle East and North Africa.
The export ban has covered crude produced in the lower 48 states and exports other than those to Canada, while exports of processed fuels like gasoline and diesel have been allowed. The Obama administration has tinkered with the ban, allowing in 2014 the export of a limited amount of extra light oil, mostly coming out of the shale fields of Texas and North Dakota. This year it gave permission to export some more to Mexico in a swap for heavier Mexican crude desired by refineries on the Gulf of Mexico.
With the price collapse over the last year, companies are decommissioning rigs, and production is beginning to drop. Few executives think 2016 will be much better, and companies are cutting their exploration budgets.
The United States already exports 4.5 million barrels a day of refined petroleum products like gasoline and diesel, and industry executives say an additional half-million to 1 million barrels a day of crude exports could come over the next several years. That is not a large number considering that the global market is roughly 94 million barrels a day.
"U.S. crude exports are unlikely to impact the big picture in global oil markets given that the U.S. is still a major importer of crude to the tune of 7 million barrels a day or close to 7 percent of current global production," said Badr H. Jafar, president of Crescent Petroleum, an oil company based in the United Arab Emirates. "Any U.S. exports will have to be matched by increased imports, leaving the global crude supply-demand balance unchanged."