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 The ban on crude exports the government put in place after the
Arab oil embargo of the 1970s includes a prohibition on exports of
unprocessed condensate, a light petroleum that appears in oil
reservoirs as a gas, but condenses to a liquid when it leaves the
well.
The Bureau of Industry and Security (BIS), an office of the
Department of Commerce, can simply modernize its definition of crude
to exclude the condensates from the ban, according to the report
called "License to Trade: Commerce Department Authority to Allow
Condensate Exports." BIS has changed definitions of other types of
petroleum for decades, it said.
"The definition of crude oil could simply be updated, aligning the
regulatory architecture with the new supply mix made possible by
technological advances," the report said.
"The Commerce Department has often modified its regulations without
either congressional intervention or presidential finding, during
both Republican and Democratic administrations," it said.
Thanks to advanced techniques, including horizontal drilling and
hydraulic fracturing, the United States is suddenly 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.
U.S. energy trade will be debated at a hearing by a panel of the
House of Representatives Committee on Foreign Affairs on Tuesday at
2 p.m. EDT. Murkowski and experts from the energy industry, a think
tank, and academia are slated to testify at the hearing.
Supporters of lifting the crude export ban, such as Harold Hamm, the
CEO of energy company Continental Resources Inc., have said it would
add domestic jobs and strengthen oil security abroad. U.S. crude
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 like 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.
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Lifting the ban on shipping unprocessed condensate overseas could
help big producers like 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 anytime 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. 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 emissions
associated with crude.
Deborah Gordon, an energy and climate expert at the Carnegie
Endowment for International Peace, will tell the House panel that
the big question is not whether to lift the ban, but rather how the
United States can balance the economy, energy security and global
warming impacts of the new U.S. oil bounty.
(Reporting by Timothy Gardner; editing by Matt Driskill)
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