Murkowski: Ban on US crude oil exports should end soon

Prohibition of US crude oil and condensate exports is an outmoded policy that should end soon as a first step in an overall energy export reassessment and reforms, US Sen. Lisa Murkowski (R-Alas.) declared.

“I am not proposing comprehensive energy export legislation,” she said in remarks at the Brookings Foundation on Jan. 7. “I believe the executive branch has the statutory authority to implement most of these ideas on its own, and if the president needs help from the legislative branch, he will always have an open partner on the Energy Committee in me. I am willing to introduce small, targeted bills to move the ball forward as needed.”

Murkowski, who is the Senate Energy and Natural Resources Committee’s ranking minority member, said she was releasing a white paper, “A Signal to the World: Renovating the Architecture of US Energy,” to outline facts and stimulate discussion.

With minimal exceptions, exports of US crude are banned as the nation’s production increases and demand falls, she observed. “There will come a time when we will have an unsustainable glut of this light crude,” she warned. “It may be next year; it may even be a matter of months. The free market works wonders, but it can’t work magic.”

Condensate can be refined and exported as natural gas liquids but otherwise also can’t be exported, Murkowski continued.

“I believe the administration retains enough statutory authority to lift the ban on its own,” she said. “Although the president has the authority to declare it in the national interest to lift the ban, another path is for the Department of Commerce to approve an application for export of crude oil or condensate under a provision in the law permitting the application if it can be demonstrated that those fuels ‘cannot reasonably be marketed’ here in the US.

Refining ‘mismatch’

“A mismatch in our nation’s refining capacity has already emerged, and common sense suggests that the mismatch should meet these qualifications,” Murkowski said. If the Obama administration is not willing to act, or if the statutory authority needs to be modified further, she said she would introduce the necessary legislation.

Opponents’ claims that crude exports would raise domestic gasoline prices are wrong and need to be addressed forcefully, she said. “I have said repeatedly—and I mean it—that the goal must be to make energy more affordable,” the senator said. “If we want to bring down gasoline prices, then we should be opening up federal lands to energy production, not close them off. I can think of a few places in Alaska that could be opened up immediately for new oil production, which would lower gasoline prices.”

Lifting the crude import prohibition would increase production and send US crude into world markets, putting downward pressure on global prices, she suggested.

“I want to be abundantly clear: I think the status quo is not beneficial to the American people,” Murkowski said. “We must act before the crude oil export ban causes problems in US oil production, which will raise prices and hurt American jobs.”

Energy export policies which are working well, meanwhile, should not be changed, she urged. “Thus far, coal exports appear to be keeping pace in world markets. Although efforts to forestall this expansion in trade must be opposed, I also see no problem with the regulatory structures surrounding renewables, [NGLs], and petroleum products. The [US Department of Commerce] already covers those, and I believe it is doing a commendable job.”

Seek efficiencies

The US should also look for efficiencies in areas where existing regulations could be more effectively implemented, according to the senator. She considers it fair to ask whether the US Department of State is the place where cross-border permit authority should be vested, given the time it has spent delaying a final decision on the proposed Keystone XL crude oil pipeline project.

The US Department of Energy’s pace in determining whether an LNG export project to a country which does not have a free trade agreement with the US also needs to be examined, Murkowski said.

“[US Energy Sec. Ernest G. Moniz] appears to have quickened the pace of approvals, but the queue is quite full,” she said. “Licenses still take far too long to review, especially when, as appropriate, the projects still must go through a rigorous safety review at the [US Federal Energy Regulatory Commission].”

Overseas producers already are closely watching developments in the Bakken, Eagle Ford, Marcellus, and Monterey shales, Murkowski said, adding: “It’s hard to put a price on that. Inaction also has a cost. Failing to renovate the crude oil export architecture could very well lead to disruptions in supply and production.”

Cites product exports

Others in Washington also called for an end to the US crude export ban. “It’s a perfect example of what we need to change in our energy policies,” American Petroleum Institute Pres. Jack N. Gerard said in response to a question following his 2014 State of American Energy address at the Newseum.

Oil product exports have reached a record 3 million b/d, and have become the largest single US export component, Gerard said, adding, “Some of these prohibitions and policies are vestiges of the past. The president talks about doubling US exports. Energy can contribute, particularly oil and gas.”

American Fuel & Petrochemical Manufacturers Pres. Charles T. Drevna said addressing crude exports is “a great and timely discussion,” adding, “A real free market would allow exports, which would be great globally. Let’s not live in shadows of the past that have absolutely no bearing on what’s happening today.”

Opponents also weighed in. “The export of US-produced oil would weaken our energy security by sending this critical commodity overseas,” said Daniel J. Weiss, a senior fellow and climate strategy director at the Center for American Progress. “It would also increase our reliance on foreign oil imports. American oil should remain on American soil.”

Weiss said Murkowski and other export advocates assume US crude production will grow endlessly. “In fact, the [US] Energy Information Administration predicts that it will peak in 5 years, and then begin to decline,” Weiss said. “We are a long way from true energy security, and we should retain this domestically produced, strategic commodity until then. Allowing oil exports now would be like celebrating a victory at half time.”

Contact Nick Snow at nicks@pennwell.com.

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

BHI: US oil rig count rises for first time in 30 weeks

07/02/2015 A sudden 12-unit jump in oil-directed rigs during the abbreviated week ended July 2 represented their first rise since Dec. 5, 2014, and helped lif...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

MARKET WATCH: Oil prices decline as US crude inventories post first gain in 9 weeks

07/01/2015 Oil prices on July 1 surrendered much of their gains from the day before after the release of a government report showing the first rise in US crud...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts

On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected