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

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

Keyera to take majority interest in Alberta gas plant

12/12/2014 Keyera Corp., Calgary, will pay $65 million (Can.) to buy a 70.79% ownership interest in the Ricinus deep-cut gas plant in west-central Alberta.

PBF Energy, PBF Logistics make management changes

12/12/2014 Matthew Lucey, currently executive vice-president of PBF Energy Inc., will succeed Michael Gayda as the company’s president. Todd O’Malley, current...

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

MARKET WATCH: NYMEX crude oil price extends slump

12/12/2014 Crude oil prices extended their slump on the New York market with a Dec. 11 settlement of less than $60/bbl for January, and prices continued downw...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

Rosneft, Essar sign terms of oil supply agreement

12/11/2014 OAO Rosneft and Essar Energy PLC have signed key terms of an oil supply agreement in New Delhi. Rosneft said shipments to India may begin in 2015.

Barton introduces bill to remove US crude export limits

12/11/2014

US Rep. Joe Barton (R-Tex.) introduced legislation that would remove US crude oil export limits that have been in place for nearly 40 years.

White Papers

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Available Webcasts



The Future of US Refining

When Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

When Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST



On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


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