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Island's answer to China-Japan dispute: Tourism

Thu, 2014-06-26 12:20

If you took an actual pin and pressed it into a world map, the hole it would make would dwarf the size of the tiny speck of an island of Ishigaki in the East China Sea.

The lush paradise is 88 square miles of jungle and white sand beaches. It's 150 miles off the coast of Taiwan, and although it’s part of Japan, it’s 1,000 miles away from Tokyo. It’s surrounded by coral reef and turquoise water – making it one of the best diving spots in Asia.

Tour operator Anichi Miyazato prepares a group of foreign tourists for a dive. In the distance, a fleet of Japanese coast guard ships loom over fishing and tour boats in Ishigaki's tiny harbor. They're here to patrol a chain of islands the Japanese call the Senkaku – and the Chinese call the Diaoyu – just 100 miles away.

"We have to protect our nation, our land, our ocean," says Miyazato when asked about the dispute. "Please go away, Chinese military!"

But it seems the Chinese military is here to stay. Just two weeks ago, a Chinese fighter jet flew less than 100 feet away from Japanese air force jets above the disputed islands. Late last year, China’s government declared the airspace over the islands as its exclusive area to protect, requiring other aircraft to identify themselves.

The U.S. responded by flying two B-52 bombers through the area, unannounced.

Below, among the sugar cane fields and palm trees of Ishigaki island, tour operators watched the escalation, worried about how it would impact their business, and wondering when the first shot would be fired.

"Personally, I think it's inevitable," says tour operator Mike Quinn, one of the few Americans on the island. "The first time a missile is fired or the Chinese overrun the Senkaku islands, a lot of tours are going to be canceled, it's going to affect the bottom line, big time."

For tiny Ishigaki, it's the ultimate China conundrum -- bracing for an invasion by China's military while courting an invasion of Chinese tourists.

Ishigaki's bustling new airport -- complete with runways that can accommodate jumbo jets -- just opened last year. There are already flights to and from Taiwan. As of now, Ishigaki isn't on the radar of the world's fastest growing tourist population in mainland China. But Hirohito Kakazu, who plans tourism for the island's government, would like to change that.

"Japan's population is shrinking and domestic tourism to the island will decline," says Kakazu, "so we need to develop tourism from elsewhere -- that's why we built a new airport."

Kakazu is working on establishing routes from mainland China. A charter flight from Shanghai is planned for the fall.

"If there were a plane from Shanghai, it would only take a couple of hours and then suddenly you're surrounded by nature, fresh air, you can catch and eat fresh fish, and you've got some of the best diving in the world," says Ichiro Ohama, president of the local entrepreneur’s club. "These are things you can’t find in China -- and it's just two hours away!”

It's that proximity to China that has defined local attitudes in Ishigaki. Older residents who were born here see China as an old friend -- the island is part of Okinawa, known to many here as the Ryukyu islands, which has maintained close historical and cultural connections with China.

Shigeo Arakaki owns a noodle shop on the island -- he's a retired assistant to a member of Japan's parliament. He'd like to see a more diplomatic approach to resolving the dispute.

"I think Japan and China should explore how to jointly develop the islands rather than fight over them," he says over a cup of tea.

At the moment, this solution doesn't look likely.

"China is becoming more aggressive and they're invading our territory," says Ishigaki mayor Yoshitaka Nakayama. "These are Japan's islands, and by international law, that's a fact. This is non-negotiable."

Japan's government is considering the construction of a military base on Ishigaki, and it's hired local fishing boats to help patrol the disputed islands and ward off Chinese vessels. Still, back on his boat over a coral reef, diving tour operator Anichi Miyazaki says sharing the islands might not be such a bad idea.

China and Japan could combine forces to build something on those uninhabited rocks that would attract tourists. Maybe a theme park?

"I don't know… Disneyland?" asks Miyazaki, breaking down into giggles. Miyazaki says everyone on this island is a businessman -- and war is never good for business.

Keeping the water clean at American Water

Thu, 2014-06-26 11:17

Running clean and reliable isn’t an easy job, but somebody has to do it.

For this installment of “Conversations From The Corner Office” we talk with Susan Story, the CEO of American Water, who says the company has been trying to avoid using some… shall we say icky tactics to keep our clean water from running out:

“People recoil at times at the thought of toilet to tap but not so much toilet to turf. So what we’re going after is the toilet to turf or the toilet to flushing again. If you can reuse that water for purposes that don’t have what you call the squishy or ick factor then we think we’ve made some significant progress.”

And when the country is in the midst of a drought, these tactics are crucial to keep the water flowing.

The issue of water running out is one thing, but keeping it clean is another. Earlier this year, there was a chemical spill in West Virginia’s Elk River that left about 300,000 people without drinking water, which has still left people buying bottled water in the region. Story says there are hundreds of chemicals and compounds that are required to be monitored which can be a difficult task. But incidents like the Elk River spill are ones they learn from to try and avoid problems like these in the future.

Story says the luxury of clean water is something people don’t appreciate or value appropriately. And whenever she is out a restaurant, she only gets water from the tap.

“And in our buildings we don’t allow bottled water. We drink our water out of the tap cause if it’s good enough for our customers, then it’s good enough for us.” 

Fire Chat is hot app in repressive countries.

Thu, 2014-06-26 11:03

An app called FireChat was designed to maintain access to the Internet when there is no Internet signal.

But it’s been embraced by people living in repressive countries where email is censored.

“In the past week, we’ve seen 40,000 downloads in Iraq alone. And the numbers in Iran are very comparable,” says Christophe Daligault, who handles sales and marketing for FireChat.

Iranians and Iraqis like FireChat because it lets them communicate anonymously, and without being censored by the government.

FireChat relies on something called mesh networking.

“Mesh networking is basically creating a network among devises that can be easier linked together without relying on the larger Internet,” says Mark Rotenberg with the Electronic Privacy Information Center.

FireChat is limited to about 200 feet. But that range is expected to grow exponentially in the next year.

Road trip nostalgia

Thu, 2014-06-26 10:35

From the Marketplace Datebook, here's a look at what's coming up Friday, June 27:

The University of Michigan releases its final June consumer sentiment survey.

Fashion designer Vera Wang turns 65. She's famous for those gorgeous wedding gowns.

On this date in 1985, Route 66 was decertified by the American Association of State Highway and Transportation Officials.

And all across the country people eat popcorn in the dark. "Transformers: Age of Extinction" explodes onto the big screen.

Matt Lauer asks Mary Barra about being a mom and GM CEO

Thu, 2014-06-26 10:34

I'm reluctant to criticize other broadcast journalists for questions they ask in interviews, because I've been on the receiving end enough times.

Still, check out this clip of Matt Lauer interviewing Mary Barra, the CEO of General Motors, this Thursday morning.

U.S. steelmakers battle against cheap imports, again

Thu, 2014-06-26 09:47

Inside U.S. Steel's plant in Lorain, Ohio, steel tubes are cast, trimmed, and threaded. The freshly-cast tubes are a dazzling, neon orange -- like a light saber from "Star Wars" -- you can feel their heat from more than 20 feet away.

"Here at Lorain Tubular, we've made significant investments over the last three to four years, to about $200 million,” says plant manager John Wilkinson.

Wilkinson says that's largely in response to the oil and gas boom from the Marcellus shale development. But another big reason was China had backed off from dumping its steel into the market. That happened in 2009, after several trade cases were filed. Wilkinson says after that, the company was feeling pretty good about things.

But since then, he says, “we have now seen the Korean imports start to take the place of the Chinese, and actually exceed the levels of where they were during that timeframe."

In other words, it's now South Korea that's doing the dumping.

And the oil companies are all too willing to buy this cheap steel. Wilkinson says because of that, production at U.S. Steel's Lorain plant is just a third of what it could be. There's just not enough demand for its steel tubes.

"This facility here would usually run around the clock, 24-7,” he says. “A lot of these countries that are dumping into our market, I can't even make the product for what they're selling." 

The Economic Policy Institute looked at this trend, and saw that steel imports shot up 26 percent in the first three months of 2014. Right now, there are nearly 34,000 steel jobs in Ohio. But if this dumping continues, there's concern that plants will close.  

"China, South Korea, India, and others, have been investing in surplus steel capacity,” says Rob Scott, an economist with the EPI. “We now have over half a billion tons of surplus steel production capacity, much of that is generating steel that's being dumped on the United States. And as a result, steel producers have begun to lay off workers."

U.S. Steel blames dumping for its decision to idle plants in Texas and Pennsylvania.

"Once you lose a steel mill and it shutters, it's pretty hard to bring it back,” says Ned Hill, an economist at Cleveland State University.

Hill says not only are foreign companies selling cheap steel here in the U.S., there are claims that they're also making knockoff steel for global buyers.

"Every piece of tube that comes out of a U.S. steel plant, has a stamp that indicates the quality, and there have been charges that those stamps have been forged internationally. And if you have a weak piece of pipe, that can cause problems,” says Hill.

Meanwhile, U.S. Steel has filed suit against South Korea for circumventing fair trade laws, with the U.S. Department of Commerce expected to hand down a ruling by mid-July.

FIFA: Unsanctioned underwear is "incidental exposure"

Thu, 2014-06-26 09:26

Three items from the 2014 FIFA World Cup caught our eye on Thursday.

1. The U.S. men's national soccer team lost to Germany, yet still advanced to the next round of the tournament.

2. Uruguay's Luis Suarez is gone for the rest of this year's World Cup and has been banned for four months for his bizarre biting incident.

3. And finally, Brazil's star player Neymar whipped off his shirt after a game earlier this week revealing some colorful undershorts. Unsanctioned underwear, apparently. Brazilian media report the underwear did not come courtesy of the Brazilian team's sponsor, Nike, or FIFA's  official sponsor, Adidas, but from a design house called Blue Man, which sent a pair to everyone on the team. 

John Horan, the publisher of Sporting Goods Intelligence, says sponsors spend millions of money in exchange for brand visibility at sporting events. And sports associations are zealous about making sure players wear sanctioned clothing and equipment.

"They've all been read the riot act about this stuff," Horan says.

A couple years ago, a Danish soccer player also caught flak for flashing non-sanctioned undies at a match. He got fined more than $100,000.

Reports swirled that FIFA, the World Cup's governing body, is conducting an investigation into Neymar's underwear reveal. But in an email, a spokesman waved off the matter, saying the organization "is not in a position to provide detailed individual feedback on every potential ambush marketing incident."

It regards Neymar's slip as "incidental exposure."

Unsanctioned underwear: the new wardrobe malfunction?

Thu, 2014-06-26 09:26

Three items from the 2014 FIFA World Cup caught our eye on Thursday.

1. The U.S. men's national soccer team lost to Germany, yet still advanced to the next round of the tournament.

2. Uruguay's Luis Suarez is gone for the rest of this year's World Cup and has been banned for four months for his bizarre biting incident.

3. And finally, Brazil's star player Neymar whipped off his shirt after a game earlier this week revealing some colorful undershorts. Unsanctioned underwear, apparently. Brazilian media report the underwear did not come courtesy of the Brazilian team's sponsor, Nike, or FIFA's  official sponsor, Adidas, but from a design house called Blue Man, which sent a pair to everyone on the team.

Why bank loans are getting riskier

Thu, 2014-06-26 04:25

The Office of the Comptroller of the Currency has issued a new report that says banks are taking bigger risks when they lend. They're doing that in two ways: lending more in auto loans to individuals, and lending more in leveraged loans to companies. And, increasingly, they're making those corprate loans "covenant-lite." Stopped you in your tracks, huh? Let me explain:

Q. First, what's a leveraged loan?

A "leveraged loan," also often known as a high-yield loan (if you're talking dirty, a junk loan), is a risky loan, borrowed by a company that's heavily in debt. Because of the risk, leveraged loans come with high interest rates. They also usually come chock-full of covenants.

Q. Which raises the question: What's a covenant?

A covenant is a requirement that the borrower has to meet every month. Perhaps is a certain debt-to-earnings ratio, or a minimum amount of gross income.  It can be anything the lender decides on. Covenants act like canaries in the coal mine for lenders, giving them early warnings that a company might run into trouble and possibly default on the loan.

Q. Got it... so what's a covenant-lite loan?

A covenant-lite (cov-lite, in the jargon) loan is like a coal mine with few or no canaries. So there will be little or no advance warning of problems in these loans: the first the lender hears about any issues is when the loan is on the brink of default.

Q. So why would anyone want a covenant-lite loan?

Well, borrowers love cov-lite loans, because they're easier to live with. There are fewer pesky rules and regulations to follow, and in some cases the loans are just pure money, with no strings.  Lenders don't really like them, for obvious reasons, but right now they're over a barrel. They're stuffed full of cash that they have to put to work in a very low-interest rate environment. There are precious few investment opportunities out there that will make the much money. And that allows the borrowers to force the lenders' hands. If you want a real estate analogy, it's a buyer's market. The buyers are the borrowers, and they're getting pretty much anything they want in these loans.

Q. Finally, then, why should I care?

Because all this means that risk is being baked into the system again. Leveraged loans are already risky.

When they're structured with few covenants, they're even riskier.

And when banks are loaded down with risky investments, well, we all remember how dangerous unfettered risk can be... don't we?

Millennials kick up soccer's popularity

Thu, 2014-06-26 03:00

The team is called Sacramento Republic FC -- The FC stands for football club (even Sacramento’s booster club also has a European flavor).

But they -- the mostly young people in their twenties in the stands -- call themselves the Tower Bridge Brigade. They stand, sing, and chant all game long.

“I grew up watching soccer,” says fan Ana Garza. “I grew up listening to soccer, I grew up with a soccer ball in my crib.  The whole thing is just exciting.”

Sacramento Republic plays in the USL. The league is a notch below Major League Soccer, where U.S. superstar Clint Dempsey plays for the Seattle Sounders. But don’t tell Sacramento Republic fans they’re second-tier. The team has sold out several games in a 20,000-seat stadium.

So why are these mostly young fans so revved up?

“If you just look at the numbers the average person, the average person when they graduate high school, at least in the Sacramento has played seven years of soccer,” says team owner Warren Smith.

Smith says he has actually been surprised by the extent of the crowds. But he knew all those young soccer players and their parents could support a team.

“They’re familiar with it. They understand it. They have played it. And so if they play it, that is one of the first indicators that they will buy a ticket," says Smith.

Sports economist Patrick Rishe says the reason professional soccer is growing is because it’s connecting with millennials.  

“I think it’s just a natural progression of people being interested in soccer,” says Rishe. “It’s been a popular youth sport for a long time. And now NBC has this deal with the English Premier League, so now we can see regularly the top quality soccer league in the world.”

Some say Republic FC’s early success at the gate and on the field could bump the team up a notch to Major League Soccer. But on a recent night, they were losing 1-0 to Arizona United SC.  

Brian Trainer, one of the leaders of the Tower Bridge Brigade says it time to get louder: “We’re going to keep singing, and it might happen right here, I’m hoping for it. Here we go, here we go…”

And just then, Republic FC booted through the game-tying goal. The assist, more or less, came from its fans in the stadium.

PODCAST: GoPro's next move

Thu, 2014-06-26 03:00

IKEA announced it would raise its minimum wage -- more on the motivation behind companies raising pay without prompting from government. Plus, with GoPro's IPO going strong, a look at what the company might do to remain profitable besides just selling cameras. Also, a new report shows that although Latinos are one of the fastest growing ethnic groups in the U.S., they remain underrepresented in American media both on air, and behind the scenes.

Report finds Latinos are underrepresented in the media

Thu, 2014-06-26 03:00

It is no secret that Latinos are one of the fastest growing ethnic groups in America. By the year 2015, Latino buying power is expected to exceed $1.6 trillion. Yet, despite this surge in population and buying power, one place that Latinos are under represented is in the media.

The Center For the Study of Ethnicity and Race at Columbia University just released a new report on that found Latinos are vastly underrepresented in the American media landscape, both on screen and behind the scenes.

For more on the report, click the media player above to hear Univision news anchor Enrique Acevedo in conversation with Marketplace's Mark Garrison.

Aereo loses at the Supreme Court: what's next?

Thu, 2014-06-26 02:00

After weeks of waiting the Supreme Court has decided on the ABC vs. Aereo case, with the court ruling against the video streaming startup and in favor of broadcasters. 

With a 6-3 vote, the court found that Aereo infringes on copyright because it presents a public performance, citing that the service's audience is not individuals.

According to Sam Gustin, a Vice correspondent covering technology policy for Motherboard, “The takeaway is that court simply didnt buy Aereo’s technological argument.”

The ruling could have implications for how the courts rule on other copyright issues raised by digital distribution.

“One thing that it tells us is that the courts are sympathetic to the arguments of the broadcasters and rights holders,” says Gustin.

Still confused about Aereo? Here are some answers to your questions

What is the service? 

What is its business model? 

 What might have happened if the court ruled in Aereo's favor?

GoPro goes public

Thu, 2014-06-26 02:00

The following story was updated after GoPro raised $427 million in its IPO, and its price jumped 30 percent in the first day of trading, closing above $31 per share.

GoPro, which makes action sports cameras, has gone public. The company raised $427 million in its initial public offering, initially selling shares at $24 apiece. 

Investors bought the stock based on GoPro’s potential. So what are they buying? 

GoPro videos are famous for scenes of daredevil skiing or surfing. So far, GoPro has made most of its money from cameras, which can be mounted on helmets, toddlers,  birds -- you name it. 

But, to really make money, GoPro needs to be more interactive; perhaps build its cameras into goggles that connect to the Web. 

“I might want a map of the resort. I might want to know where I am in the resort, ” says Andrew Sheehy of Generator Research.

GoPro videos could also have a future on cable TV.

“If they are able to take a 'best of' and upstream it -- you know, they get their own half-hour show on MTV or something,” says Jeff Howe, who teaches multimedia journalism at Northeastern University.

GoPro could sell advertising, leading to a steady stream of revenue, which investors would love. 

Why is GoPro so popular? Check out some of the craziest, death-defying, fascinating, and hilarious GoPro videos on the web.

1. Watch what happens when this GoPro camera falls out of a plane. You won't believe the end. 

2. Daredevil Felix Baumgartner inspired the world when he became the first man to jump from 24 miles above the surface of the Earth. See what he saw through the GoPro attached to his head.

3. GoPros aren't just for taping freefalls from great heights. Here's what happens when you put one on a ukulele and give that ukulele to an orangutan. 

4. People use GoPros to go places they couldn't otherwise go -- like right up to a rattlesnake. We don't suggest you try this one at home.

5. There's a reason GoPro is so popular with extreme atheletes...

6. GoPro was first popular with surfers. 

7. But you hardly need to be an athelete or daredevil to use one. 

8. This guy took his to Burning Man. 

9. Ever wonder what it must be like to be a rat crawling around in Walmart?

10. Or go to space? 

11. Or live inside The Matrix? 

12. Of course, who says you have to do anything interesting at all?

 

 

Everyday Activities With A GoPro - watch more funny videos

Why won't millenials just buy houses already?

Thu, 2014-06-26 02:00

Millennials get blamed for a lot these days: entitled behavior, too much texting, kombucha.

Now, there's one more thing that's kind of their fault (but only kind of), according to a new report from Harvard's Joint Center for Housing Studies: the sluggish housing recovery.

"Young people are always the key to the housing market," says Chris Herbert, the center's director of research. He says an expanding housing market requires a chain reaction -- young people buy starter homes from middle-aged people, who in turn upgrade to bigger homes themselves, and on and on. But "without those young buyers coming in to the market, the whole market really tends to get bogged down."

And that's what’s happened in the past few years. So what do millennials have to say for themselves for all this bogging-down they're doing of the housing market?

Of course no one millennial can speak for their whole generation, but 29-year-old Steve Parkhurst gave it his best shot in his recent Youtube video "Millennials: We Suck and We’re Sorry."

When I asked Parkhurst why he didn't own a house, he laughed.

"I've tried to increase my credit limit on my credit cards," he says. "I can't even do that — so the idea of walking into a bank and asking for a 30-year mortgage seems comical to me."

Parkhurst says the economic realities facing many millennials — student-loan debt, low-paying freelance jobs, and scary unemployment rates for most of his adult life — have kept him and lots of his friends from even thinking about real estate, he says.

"It's not like we're all too hip and cool to want it," he says. "I love the idea of owning a home. But at the moment it's just not a possibility."

Maybe, he hopes, he might own by the time he's 40.

When did we become outnumbered by our devices?

Wed, 2014-06-25 14:11
<a href="http://marketplaceapm.polldaddy.com/s/more-devices">View Survey</a>

Do you remember life before the bar code?

Wed, 2014-06-25 13:46

From the Marketplace Datebook, here's a look at what's coming up Thursday, June 26:

In Washington, the Commerce Department lets us know how much we earned and how much left our pocket books in May with the release of its personal income and spending report.

Two things that keep you moving—Winnebago and Nike are scheduled to release quarterly earnings.

Next, let's go back in time and stand in a supermarket checkout line in Troy, Ohio. Come on, it'll be fun. Hear that beeping sound? Forty years ago on June 26 a pack of Wrigley's gum made history when it became the first purchase scanned using a bar code.

It's National Chocolate Pudding Day. Doesn't that just take the word "diet" right out of your vocabulary?

And in Brooklyn, New York, the Cleveland Cavaliers have first dibs in the NBA Draft.

$200 a month for TV in 2020

Wed, 2014-06-25 13:43

On Wednesday's Marketplace, in an interview about the Supreme Court's decision ruling against the Aereo TV service, Marketplace Tech host Ben Johnson mentioned he is a "cord cutter." Meaning, he gets his television and video content without paying a cable bill.

Here's why:

A survey out from the market research firm NPD group says the average cable bill now sits right near $90 per a month and we expect it to hit $200 per month by the end of the decade. $200. A month. For television.

GDP fell, and is rising again

Wed, 2014-06-25 13:38

U.S. gross domestic product fell 2.9 percent in the first quarter of 2014, according to the third revised estimate from the U.S. Commerce Department. Earlier preliminary estimates had reported a smaller decline in GDP.

Contributing to this higher figure for GDP decline were downward revisions to health-care spending following the roll-out of the Affordable Care Act. Government economists initially predicted that newly-insured Americans (and those on new plans) would spend more on healthcare than they did in the first quarter.

Most of the contraction in the first quarter is still attributed to severe winter weather across the country in early 2014 -- including the so-called Polar Vortex that spread across many northern states. It led consumers to go out, and spend, less. Businesses cut back on hiring, production, and investment. Other factors slowing the economy down included elimination of federal long-term unemployment benefits, and cuts to the federal food stamp program.

“This is a terrible number,” said economist John Canally at brokerage company LPL Financial in Boston. Yet, he said the stock and bond markets mostly ignored the statistic, looking forward instead to economic performance in the second quarter, as well as anticipated growth for the rest of the year and into 2015.

“The second quarter looks pretty strong,” said Canally, “with GDP tracking (positive) to between 4 percent and 5 percent. It would be the best run rate on the economy since well before the Great Recession.”

Canally pointed out that consumer confidence is up and so is hiring by businesses. Unemployment claims are down, while the manufacturing sector has strengthened.

There are also worrisome economic indicators on the horizon: rising consumer prices, especially for food and gasoline; stagnant wages for most workers; historically high levels of long-term unemployment; and international tensions in the Middle East, East Asia and Eastern Europe.

Most economists don’t think there’s much danger of the U.S. slipping back into recession -- at least, not without a significant shock, such as a further spike in oil prices.

MIT economist Jim Poterba is president of the National Bureau of Economic Research, which determines when the U.S. is officially in recession. He said the GDP reversal this past winter does teach us something about economic prediction.

“What I think we learned from the Polar Vortex, and we could learn from a protected heat wave, is that there are closer links between extreme weather fluctuations and economic activity than we may recognize,” said Poterba. “Potentially, extreme heat can have similar kinds of effects -- extreme demands on the electricity grid, for example.”

The National Weather Service predicts higher-than-normal temperatures in many regions of the U.S. this summer, including the West Coast, the Southern Great Plains, the Southeast and Mid-Atlantic States.

Oil from fracking may end U.S. ban on exporting oil

Wed, 2014-06-25 13:38

Ever since the oil crisis of 1973, when oil prices nearly quadrupled as a result of an OPEC embargo following the Yom Kippur War, there has been a ban on U.S. crude oil exports. But that may change.

In two rulings, yet to be confirmed, the U.S. Department of Commerce will allow two private companies to export a special type of crude oil. It's a tiny opening in what could be a big change for the oil industry.

The crude oil at issue is a specific type of lightweight crude called condensate. It’s very different from what you probably picture when you think of crude oil. Condensate is not the thick, black oil that came a “bubblin” out of the ground in the opening credits of The Beverly Hillbillies. Condensate is thinner, it can look like tap water, and it’s highly volatile.

“Condensate,” says analyst David Bellman, “is actually one of the crudes that would be the easiest to refine.” It would be the easiest to refine, if it weren’t for one problem. “The problem is that the refining industry, for the last couple decades, has been told that crude oil is going to get heavier and heavier,” says Bellman.

As a result, refineries invested in equipment designed for refining heavy crude. But since the fracking boom, 96 percent of new oil production is ultralight, not heavy crude. “It’s not a great fit for the refineries in the U.S.,” says Severin Borenstein, co-director of the energy institute at the Hass School of Business at Berkeley.

Oil producers are worried that this bottleneck could get worse, driving down the price of condensate. “So the argument they are making is, they should be allowed to export those crude products,” says Borenstein.

Industry analyst Fadel Gheit says lifting the ban would lower crude prices on the global market. But it would raise condensate prices in the U.S. That’s bad news for U.S. refineries, as evidenced by a dip in their stock prices today. “They had one of their worst days in years,” says Gheit.

There is no consensus among analysts on what lifting the ban would do to the price consumers pay for gas at the pump.

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