Industry Needs to Make Case on Oil Exports
The U.S. oil industry needs to make a better case for lifting the decades-old ban on crude exports, especially as the country still relies on millions of barrels of foreign oil, U.S. Energy Secretary Ernest Moniz said on Wednesday.
Oil producers have begun ramping up efforts to overturn rules restricting the sale of U.S. crude oil overseas in most cases, with the nation awash in light sweet crude that is not a good match for the Gulf coast refining hub.
But Moniz, who caused a stir late last year when he suggested that the ban should be revisited, said many questions remain unanswered about the potential impacts of crude exports.
"The industry could do a lot better job talking about the drivers for, and what the implications would be, of exports," Moniz said at the IHS CERAWeek energy conference in Houston, a high-profile event that draws oil and gas industry elites.
More analysis is needed of infrastructure issues and the possibility of expanding or modifying U.S. refineries, Moniz said.
He also argued in favor of a comparison of the impacts of the crude exports versus refined products exports, which are currently allowed.
"The industry could do a lot more to put that whole case together for a public discussion," Moniz said.
SHALE GAS AND UKRAINE
The shale revolution has also opened the door to U.S. exports of liquefied natural gas.
Some lawmakers have called for the Obama administration to use the nation's natural gas bounty as leverage as it negotiates with Russia over the unrest in Ukraine.
While the Energy Department considers geopolitical ramifications in its review of LNG export applications, Moniz said the department does not have the authority to determine the destination of gas shipments.
"I think we have to think through, perhaps with the Congress, how we want to address that set of issues," Moniz said.
The crisis in Ukraine may warrant a discussion about whether that situation should lead to any changes in the gas export review process, he added.
Shipments of gas to countries without free trade agreements with the United States require approval by the department.
With only one U.S. gas export terminal fully permitted, substantial U.S. gas exports remain years away.
The department has issued five additional conditional approvals for exports, with two dozen other applications pending.
With licensed export volumes nearing the threshold of 12 billion cubic feet a day considered by the DOE-commissioned study that evaluated the impact of gas exports, some analysts have warned the administration may pause its review process to do another assessment.
Moniz said circumstances may arise that would require more study, but he would not specify whether he thought there would be delays.
"As we go forward, we are continuously evaluating and if we have to update, we will," Moniz said.
By Ayesha Rascoe (C) Reuters 2014.