The Obama administration cleared the way for the first exports of unrefined American oil in nearly four decades, allowing energy companies to start chipping away at the longtime ban on selling U.S. oil abroad.
In separate rulings that haven't been announced, the Commerce Department gave Pioneer Natural Resources Co. and Enterprise Products Partners LP permission to ship a type of ultralight oil known as condensate to foreign buyers. The buyers could turn the oil into gasoline, jet fuel and diesel.
The shipments could begin as soon as August and are likely to be small, people familiar with the matter said. It isn't clear how much oil the two companies are allowed to export under the rulings, which were issued since the start of this year. The Commerce Department's Bureau of Industry and Security approved the moves using a process known as a private ruling.
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For now, the rulings apply narrowly to the two companies, which said they sought permission to export processed condensate from south Texas' Eagle Ford Shale formation. The government's approval is likely to encourage similar requests from other companies, and the Commerce Department is working on industrywide guidelines that could make it even easier for companies to sell U.S. oil abroad.
In a statement Tuesday night, the Commerce Department said there has been "no change in policy on crude oil exports."
Nearly 20 refining projects with capacity of more than 900,000 barrels a day have been proposed and are in various stages of development, according to Credit Suisse Group. This fall, Kinder Morgan Inc. plans to start a $360 million condensate splitter near the Houston Ship Channel that is supported by long-term contracts with BP PLC.
Earlier this year, the chief executive of Continental Resources Inc., the biggest driller in North Dakota, said he expected a wholesale lifting of the export ban so all types of U.S. crude could be sold internationally.
Sounds about right.Pops wrote:The US exports about 3% of production currently, almost all to Canada.
Condensate is 96% of recent US production increase.
The Refineries on the Gulf have been rebuilt to refine heavy crude not the light oil from fracking.
So essentially this will allow export of 100% of all US production gained through fracking.
I pointed out the dramatic rise in exports of propane that led directly to last winter's shortages.
This will be exactly the same.
Luckily the US still has a lot of FFs and that's a good thing because I wouldn't be surprised to see a "political" peak in available exports before a geologic peak. But as the amount of oil on the export market declines and the price rises relative to the wage of the average Prole, I'd not be surprised to see the US start exporting more crude and finished product...
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