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 Rising U.S. shale oil production has opened the door to a possible
revision of the decades-old policy restricting most exports of
unrefined petroleum.
Various groups and lawmakers favoring exports have been fast out of
the gate, seizing on a comment by U.S. Energy Secretary Ernest Moniz
in December that it might be time to take another look at the law.
Philip Rinaldi, chief executive of Philadelphia Energy Solutions,
said the anti-export group Consumers and Refiners United for
Domestic Energy, or CRUDE, was formed with the goal of preventing a
hasty reversal of policy.
Abruptly allowing exports after a few years of rising production,
but decades of concerns about energy security, would be "rash,"
Rinaldi told Reuters on Tuesday.
"What's the rush? You've waited 40 years. Why not take time to kind
of understand the dynamics of the market," he said.
CRUDE's goal runs counter to the message from major oil and gas
lobbies such as the American Petroleum Institute and the American
Fuel and Petrochemical Manufacturers.
API is dominated by crude oil producers, but Rinaldi said CRUDE was
founded to speak specifically to the needs of refiners and the users
of crude oil products.
PES, based in Philadelphia, is joined in the coalition by Monroe
Energy of Trainer, Pennsylvania; PBF Energy Inc of Parsipanny, New
Jersey; and Alon USA Energy Inc of Dallas.
Certain market and policy conditions need to be met before the
coalition could support oil exports, Rinaldi said.
The group has hired lobbyists from the firm Peck Madigan Jones to
push its views in Washington, disclosure forms show.
Established after the 1970s Arab oil embargo, the export ban has
divided oil producers, who support its repeal, and some refiners,
who have benefited from being able to buy plentiful and relatively
cheap U.S. crude and then exporting the value-added refined
products.
While U.S. law prohibits the export of crude oil, overseas sales of
petroleum products such as gasoline and diesel are allowed.
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Oil drillers argue that they face a growing disconnect between
production of light sweet crude from shale formations in the United
States, and capacity constraints among refiners on the U.S. Gulf,
whose equipment is more suited to heavier crudes.
But Rinaldi said the market is not currently saturated, noting
that the United States still imports millions of barrels of oil per
day and that crude producers are reluctant to enter into long-term
contracts that lock in prices for refiners.
These are "all signs that the market is nowhere near glutted, which
is the point when you think about opening up an export market,"
Rinaldi told Reuters.
The group's other major concern would be a relaxation or lifting of
the crude oil export ban while the nearly century-old shipping
statute, the Jones Act, remains in place.
The Jones Act limits domestic shipping to U.S.-flagged vessels.
Leaving the law intact would put U.S. refiners at a severe
disadvantage to foreign companies if the export restrictions were
suddenly removed, Rinaldi said.
He said an argument advanced by export backers that exporting crude
from the United States and importing refined oil would mean cheaper
gasoline at the pump is unlikely to resonate with consumers.
"I don't think John Q. Public thinks that has any chance of making
gasoline cheaper," Rinaldi said.
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