Tags: US | economy | oil | exports

WSJ: US Eases Decades-old Ban on Oil Exports

Tuesday, 24 June 2014 06:54 PM EDT

U.S. officials have allowed two companies to export a kind of ultra-light oil known as condensates, a first step that effectively loosens a 40-year ban on most U.S. crude exports, the Wall Street Journal reported on Tuesday.

The U.S. Commerce Department gave approval via a private ruling to Pioneer Natural Resources Co and Enterprise Product Partners LP to export the condensate, the newspaper said.

The companies and the Commerce Department did not immediately respond to requests for comment.

Under current regulations companies can export U.S. refined fuel like gasoline or diesel, but not crude oil.

The U.S. shale oil boom of recent years is expected to soon make the country the world's top crude producer, surpassing both Saudi Arabia and Russia. It has also led to a glut of light oil in Texas and Louisiana that is difficult to process there because refiners have invested billions of dollars to process heavier oils from Mexico and Venezuela.

Some ultra-light oil could be reclassified as fuel after it has been minimally processed, putting it in a regulatory gray area that has been seen by some export backers as a way to ease the ban on exports.

Reuters reported in May that U.S. oil producers, including Pioneer, had met with the Department of Commerce's Bureau of Industry and Security (BIS), which oversees exports.

Senator Lisa Murkowski, Republican of Alaska, said the move on condensate was "a reasonable first step that reflects the new reality of our energy landscape."

Murkowski, the top Republican on the Senate Energy Committee, urged the White House to fully lift its ban on crude oil exports, as she has all year.

A Senate aide said the shipments that will be allowed are limited because they are "stabilized" condensates, or crude that has been processed to remove light ends like butane gas so that it can be sent through pipelines for shipping.

It was not immediately clear how much condensates the companies would be able to ship though exports could begin as soon as August. Pioneer Chief Executive Officer Scott Sheffield said in March that recent U.S. oil production includes some 800,000 barrels per day of condensate.

Congress is not expected to pass legislation lifting the ban on crude exports before the Nov. 4 elections, as no lawmaker wants to be blamed for a move that could boost U.S. oil prices.

U.S. oil prices rose more than $1 to $107.05 a barrel after the report.

Senator Edward Markey, a Massachusetts Democrat, blasted the export approvals, saying it puts America on a "slippery slope" to send more oil abroad when the Middle East is in disarray and tensions are high with Russia.

"Congress put this oil export ban in place. It should be Congress that decides when and how to change it, not through a private ruling by the Commerce Department without public debate," he said.

© 2025 Thomson/Reuters. All rights reserved.


Economy
The U.S. will allow two companies to export unrefined oil for the first time in four decades, taking steps to break a ban on crude exports, The Wall Street Journal reported Tuesday.
US, economy, oil, exports
475
2014-54-24
Tuesday, 24 June 2014 06:54 PM
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