The United States has become the sixth region to ban fresh beef imports from Brazil, according to a statement from the U.S. Department of Agriculture (USDA). The U.S. joins China, Mexico, Chile, Japan, the European Union, and Hong Kong in banning the beef.

The USDA made the decision on beef imports after inspections showed health concerns, unsanitary conditions, and animal health issues. The bans will remain in place until Brazil “takes corrective action,” the statement said.

Brazil is the fifth largest exporter of fresh beef to the United States and has already shipped over 50 million pounds of beef this year. After the other regions banned Brazilian beef in March, American officials say they have been inspecting the meat more closely. This has resulted in a refusal of 11 percent of the beef, much higher than the normal 1 percent refusal rate, according to CNN Money. As a result, 1.9 million pounds of beef have been sent back to Brazil.

“Although international trade is an important part of what we do at USDA, and Brazil has long been one of our partners, my first priority is to protect American consumers,” Secretary of Agriculture Sonny Perdue said.

Brazilian Agriculture Minister Blairo Maggi plans to visit Washington soon in an attempt to overturn the decision, Reuters reported.

Aside from health and safety concerns, other countries expressed concern over potential corruption. A few months ago Brazilian authorities said some meat companies were bribing government officials to turn a blind eye to safety concerns, according to the USA Today.

While Brazil still has other countries with which it can trade, the loss of the American market could be damaging to the Brazilian economy–the United States is the ninth biggest market for Brazilian beef export.  Since the restrictions began in March, Brazil has responded by closing three processing plants and suspending licenses for 21 meat packing plants, according to CNN Money.

It may take some time to resolve the situation, and it may result in economic issues, but the USDA has decided to take a stand after observing issues with the beef. In the mean time, the U.S. will have to rely on other global beef exporters including Japan, Mexico, Argentina, and Australia.

Josh Schmidt

Josh Schmidt is an editorial intern and is a native of the Washington D.C Metropolitan area. He is working towards a degree in multi-platform journalism with a minor in history at nearby University of Maryland. Contact Josh at staff@LawStreetMedia.com.

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Earlier this week, a New Hampshire voter asked Hillary Clinton if she would sign a bill in favor of building the Keystone XL Pipeline. Clinton sidestepped the question. stating: “this is President Obama’s decision…if it’s undecided when I become president, I will answer your question,” she said.

The Keystone XL Pipeline has been on the forefront of American politics for quite some time now, and Clinton’s reply to the issue has been typical of her response to climate-related questions in general: avoidance. But one oil-related issue, the U.S. ban on crude oil and natural gas exports, is one that can’t be avoided any longer, although it’s certainly not something you really hear the presidential contenders talking about either.

Under American law, energy companies are not allowed to export crude oil, and companies can only export natural gas to countries with which the United States has a free-trade agreement. The Energy Department can approve natural gas exports to other countries if it deems such sales to be in the public interest; currently, 46 out of 52 such applications have been approved. These policies have their roots in the 1970s energy crisis, a period in which interruptions in petroleum imports from the Middle East caused wild price fluctuations and supply shortages.

For 40 years, these policies made sense. With domestic production declining and the U.S. importing 60 percent of its oil as recently as 2005, the export ban served its function to protect the market from fluctuations and shortages.

The situation is not quite the same today. The increasing prevalence of fracking–a new more efficient method of extracting crude oil–has saturated the domestic market. There is an important distinction to be made between the “light oil” that we are producing in growing quantities and the heavier crude oil that we typically import. Many of our refineries are designed to process heavy oil, and running light oil through these refineries decreases output capacity and revenue due to the incompatibility of light oil with equipment. Consequently, refiners demand significantly lower prices for domestic light oil and the export ban forces suppliers to accept these low prices.

Interestingly, the export ban does not include gasoline and other refined products, rendering the laws of supply and demand that dictate the value of goods in a capitalistic society irrelevant to domestic refiners. Instead, the ban creates an unfair system in which refiners purchase cheap oil in a domestic crude oil market saturated with supply, while their prices reflect the global refined oil market saturated with demand.

Lifting the export ban on crude oil and natural gas would force domestic refiners to compete with foreign refiners, raising the price of light oil and incentivizing suppliers to produce more. Increased production would require new jobs, and subsequent revenues would bolster the economy. Refiners would no longer be the main beneficiaries of cheap light oil. According to energy experts Daniel Yurgin and Kurt Barrow, lifting the export ban, combined with continuing progress in production technology, would lead to as much as 2.3 million barrels of additional production a day. Yurgin and Barrow estimate that this increased production would reduce gas prices by as much as 12 cents a gallon, saving US motorists $420 billion over 15 years.

There are diplomatic advantages to lifting the ban as well. Russia supplied 30 percent of Europe’s gas in 2014, regularly using gas as a diplomatic tool to threaten foreign economies. Last year, Russia declared that it would no longer sell gas at a discounted price to Ukraine, which gets 60 percent of its natural gas supply from Russia. In the Middle East, ISIS’s operations are funded heavily through pirated oil. According to Andy Karsner, former assistant energy secretary in the Bush administration, “We have one bullet that hits both of them: bring down the price of oil.”

At the very least, U.S. oil exports would stabilize the market and provide our allies with viable alternatives to OPEC or Russian energy–perhaps the Western response to Russia’s aggressive actions in Ukraine last year would have been stronger had there been a U.S. presence in the global oil market. Pioneer Natural Resources CEO Scott Sheffield notes, “It’s hard to believe we’re asking the Japanese to stop taking Iranian crude, but we won’t ship them any crude ourselves.”

It is impossible to predict all the implications of lifting the export ban, of course. Foreign suppliers may reduce their oil exports to maintain the high global price of oil, or Russia could engage in predatory pricing to drive U.S. suppliers out of the market. Perhaps increased fracking regulations will reduce the supply of domestic oil, minimizing our influence in the market. Regardless, lifting the export ban gives our government another front to exert diplomatic influence, engage our enemies, and improve our economy. It’s economics and diplomacy 101. Let’s just hope members of Congress paid attention in class, and that our presidential candidates make an effort to address this essential issue.

Hyunjae Ham

Hyunjae Ham is a member of the University of Maryland Class of 2015 and a Law Street Media Fellow for the Summer of 2015. Contact Hyunjae at staff@LawStreetMedia.com.

The post Lifting the Ban on Crude Oil and Natural Gas Exports: It’s Time to Make a Change appeared first on Law Street.

My house rumbles and shakes as the cargo trains thunder down the rail that is less that 500 yards away. Although the necessity of turning up the volume on my TV is not much more than a nuisance, the fact that I sleep within the blast zone of a highly combustible material being transported in an inept and accident-prone manner is highly unnerving. Despite the speed of aircraft or the capacity of cargo ships, railroads remain the most efficient medium for transporting goods. That does not mean, though, that they are a flawless medium. In fact, when dealing with the transportation of crude oil, they and the system on which they operate are horrifically flawed.

Fracking in North Dakota yields a crude oil that is shipped in trains across the country and down the Hudson River. In the New York portion, the rail runs literally right along the river’s edge. The particular form of crude coming from these fields can turn into an explosive fire should the trains derail, giving this transportation system the name “bomb trains”. The American Petroleum Institute disputes this claim, though. The issue is compounded by the fact that it is being transported in outdated cars, called DOT-111s, which have thin hulls and are prone to puncture. In the last several years, oil train derailments have spilled millions of gallons and resulted in deaths, notably in Quebec last year.

Apparently the Transportation Department has been looking into the DOT-111 situation for several years now, but a surge in oil production in the North Dakota Bakken shale region has resulted in an immediate demand for large scale transport. There are not enough pipelines to accommodate this volume, so it is being sent along in trains, dubbed a “virtual pipeline.” Furthermore, the existing oil trains were not originally intended to move this type of oil at this level of intensity, thus the dangers. While safer designs are in the proposal stage, many of the existing cars are too old to be retrofitted with the new features and would have to be replaced all together. This is problematic, Jad Mouawad of The New York Times points out, because the transition period would mean that there are fewer cars on the rails and the oil demands would be difficult to meet.

Also sorely lacking is an emergency response plan. Should a disaster occur, sufficient measures are not currently in place either to mitigate the consequences of a spill or to effectively address the human welfare. Not only would lives be endangered, but a spill would gravely threaten the drinkability of the water for both locals and the eight million residents of New York City, as well as the wellbeing of the river’s biodiversity. In a flash, a spill could undo everything that the Hudson conservation organization Riverkeeper has spent the last half century trying to accomplish.

A bird struggles amidst an oil spill near Crimea, courtesy of Marine Photobank/Igor Golubenkov via Flickr

The lack of safety precautions is not the fault of emergency workers, but the Transportation Authority and oil industries themselves. The latter needs to be more open as to when trains are running through what areas, and what is the nature of their cargo. Last month, Orange County, New York joined neighbors Rockland and Ulster in calling for a full environmental review of the potential impacts of the increased oil shipments, a ban on DOT-111s, and an exploration of alternative means of transporting the oil. Embodying the philosophies of Riverkeeper, these actions criticize the secretive nature of the oil industry and demand the release of data to the public. By empowering the people with information, appropriate measures can be taken.

One town in North Jersey took things a step further, staging a protest and calling for a moratorium on the oil trains until safety standards are met. As previously mentioned, the trains run through my own hometown and neighboring ones in Bergen County, New Jersey pass through a very built up and densely populated region; a disaster in this area would be catastrophic and unquestionably deadly.

One must be cautious when performing a review of potential environmental impacts, as the method can be manipulated so as to be favorable to one party over another. The mayor of Albany recently accused the Department of Environmental Conservation of segmentation, an illegal action under the Environmental Quality Review Act. This process enables the review of a project in individual groups, not as an overall whole. In so doing, environmental impacts can be overlooked or miscast. This has allowed oil companies to enlarge or change their transportation permits time and again without raising any red flags. Ecosystems are large and complex; an issue in one arena will affect, often in an unforeseen manner, aspects of another. Further, humans are tightly intertwined with their surrounding environments. The issue must be looked at in its entirety in order to properly assess the dynamics of the dangers and their potential consequences.

The interrelatedness of people, policy, and environment with regard to this issue extends widely. The overemphasis on oil shipments is creating a backlog in other industries. Millions of dollars are lost and countless jobs are endangered as North Dakota farmers, the longtime mainstay of the economy there, are unable to ship their grain products across the country. A cascade effect follows; food companies are pressured to put out their products in light of delayed shipments, occasionally resulting in lower supply and higher prices. Exportation economics suffer as well, as these rails send grains to the Pacific Northwest to be shipped to Asia, and down the very same routes in New York State to be sent to Europe. In the long run, grain will be a more reliable product than oil. Companies are too short sighted and capitalize on the spike, with wide ranging and ever worsening consequences.

While the increased production, transportation, and use of oil is frustrating enough for those who would rather see progress in the field of renewable energy, the fact that it is compounded by a massive threat to local ecosystems and human welfare is outrageous and unacceptable. This issue is more than a concern over energy policy; it is making the use of fossil fuels an environmental and human threat in manners that go beyond emissions and pollution. The dangers must be effectively addressed, and soon.

Franklin R. Halprin

Franklin R. Halprin holds an MA in History & Environmental Politics from Rutgers University where he studied human-environmental relationships and settlement patterns in the nineteenth century Southwest. His research focuses on the influences of social and cultural factors on the development of environmental policy. Contact Frank at staff@LawStreetMedia.com.

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