Energy chief: Industry arguments for exporting US oil are unconvincing


HOUSTON — The oil industry hasn’t made a convincing argument that the U.S. should lift its 39-year-old ban on exporting American crude, Energy Secretary Ernest Moniz said Wednesday.

“I don’t think the industry has done a very good job of clearly and concisely stating the case” for exports, Moniz said.

Speaking directly to oil industry leaders at the IHS CERAWeek conference in Houston, Moniz challenged them to do a much better job talking about the drivers for exports and the potential implications of selling more American crude overseas.

That’s especially important given that the clamor to export U.S. crude is coming even as the nation continues importing about 5 million barrels of oil daily, Moniz said.

Feds: United States will fall from world’s top oil importer this year

Much of that incoming oil is a heavy crude, easily processed in Gulf Coast facilities that have been adapted for it, rather than the light sweet variety pouring out of many tight oil formations in the U.S.

Export supporters also say lifting the trade restrictions would help move that higher quality oil to the refineries that can more easily use it — as an alternative to building new infrastructure or dismantling Jones Act restrictions on U.S.-flagged tankers to transport the crude around the country.

Moniz said those and other factors needs to be evaluated, including concerns about the appropriate balance of crude oil exports and imports, he said.

“There’s a lot of questions that have not been addressed in a clear way,” Moniz said.

Poll: Should the US lift its ban on oil exports?

The current ban is not absolute. Presidents and the Commerce Department have carved out exemptions for California crude, oil produced in Alaska and exports to Canada.

Moniz helped fan the current debate over broadening American crude exports by observing last year that the U.S. may need to revisit trade restrictions wake of the OPEC oil embargo in light of surging U.S. crude and gas production.

Sen. Lisa Murkowski, R-Alaska, on Monday told CERAWeek that 2014 would be the “year of the report” on the subject, as analysts study the broad economic and security implications of lifting the 1975 ban.

A number of private and public institutions are conducting studies. Adam Sieminski, head of the government’s Energy Information Administration, said earlier this week that his agency was prepared to review the issue.

Columbia University, Rice University, the Brookings Institution and others also have launched analyses.

Russia’s invasion of Ukraine has stoked calls in Congress for the U.S. to boost exports of American oil and gas to help allies and tame crises unfolding around the globe.

Political debate: Oil export ban can be lifted piecemeal

But some energy experts at the CERAWeek conference cautioned against using oil as a strategic weapon. Frank Verrastro, chair of energy and geopolitics at the Center for Strategic and International Studies, suggested it would be unwise.

But David Goldwyn, a onetime aide to former Secretary of State Hillary Clinton, said the Obama administration would at least be empowered to act differently if the U.S. had unfettered oil and natural gas exports today.

“The step is always five years out, but you can see the potential we would have to be a direct support to our allies,” Goldwyn said. “That’s a huge tool.”

Also on FuelFix:

40 years later: Foreign oil dependence has soared since the embargo

Jennifer Dlouhy

Comments are closed.