Reuters, Published April 02 2014
Senator says small change could get some U.S. crude exports flowingWASHINGTON - The U.S. Commerce Department could help energy companies start to bypass a 40-year ban on most U.S. crude oil exports by allowing shipments of a type of petroleum that has become abundant during the energy boom, a key senator said on Wednesday.
The department's Bureau of Industry and Security (BIS) can allow the exports of an unprocessed light oil called condensate without an act of Congress, simply by modernizing its definition of crude, Senator Lisa Murkowski, a Republican from Alaska, told a House of Representatives subcommittee.
"Commerce has taken similar measures in the past," said Murkowski, adding that lifting the ban overall would generate wealth, create jobs and enhance national security.
Murkowski has become the leading voice in Congress for relaxing the U.S. export ban. Her office released a report on Tuesday to support her position.
The U.S. crude oil export ban introduced after the 1973 Arab oil embargo includes a prohibition on exports of unprocessed condensate, which exists underground as a gas while crude oil is a liquid.
"The Commerce Department has often modified its regulations without either congressional intervention or presidential finding, during both Republican and Democratic administrations," Murkowski's report said.
BIS was not immediately available to comment on the report.
Thanks to advanced techniques, including horizontal drilling and hydraulic fracturing, the United States has risen to become one of the world's top three oil producers, along with Russia and Saudi Arabia, a development energy experts did not think was possible a few years ago.
Supporters of lifting the crude export ban, including Harold Hamm, chief executive officer of energy company Continental Resources Inc, have said that exports would add jobs at home and strengthen oil security abroad. U.S. exports could help counter aggression by Russian President Vladimir Putin, Hamm testified last week in the House.
If condensate exports were allowed, it would be a small but important first step in opening U.S. oil sales to global markets. Exports of refined products such as gasoline and diesel are already allowed. Condensate exports could reach between 100,000 and 300,000 barrels per day if the BIS grants licenses, Citigroup analysts said in a recent research note.
Lifting the ban on shipping unprocessed condensate overseas could help big producers such as Apache Corp or EOG Resources Inc.
While pressure is building on President Barack Obama to lift the wider ban on crude shipments, few analysts think an outright reversal will come soon.
The United States still imports much of its oil, so it could be a few years before it has so much that most companies will need to find new markets in order to keep drilling. And no major legislation to lift a ban exists, in part because few lawmakers in an election year want to support a measure that could be blamed for raising motor fuel prices.
A wholesale lifting of the ban could also raise the ire of environmentalists opposed to domestic drilling and the emissions associated with crude.