Refining chief: We don’t oppose US oil exports

HOUSTON — Phillips 66 Chairman and CEO Greg Garland said the company doesn’t oppose exporting U.S. oil, putting the company at odds with other independent refiners who have lobbied aggressively against lifting the nation’s crude exports ban.

Garland’s comments come as federal lawmakers debate the 39-year-old ban, amid a surge in U.S. oil production. The ban generally benefits refiners like Phillips 66, helping ensure U.S. oil runs through their refineries before it is shipped abroad.

Refiners also benefit from the comparatively low cost of U.S. crude, compared to the global oil price. Inland refiners, located where the price difference is greatest, have been particularly vocal in their opposition to calls to lift the ban. Integrated oil companies with downstream refining operations — and newly spun off refiners like Phillips 66 — have been far less visible on the issue.  

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In the past, Garland has expressed outright support for lifting the ban, garnering him attention for reportedly being the first major refining head to take that position.

“When you think about what is good for U.S. economy, what drives job growth… all of these are reasons why we support crude oil exports,” Garland told reporters at a lunch in New York, Reuters reported in 2012.

But on Wednesday, Garland took a slightly softer position. “We’ve never said we’re for — we’ve said we don’t oppose,” Garland said.

“In our view, it’s time to have an honest, open dialogue about energy policy in the U.S., and we need to be holistic in that,” Garland continued.

Many oil producers want the ban lifted, since they’d likely get higher prices for U.S. crude sold on the international market. U.S. refiners, on the other hand, are able to take advantage of the price spreads since they currently sell on a global market.

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Garland’s comments come as his company begins plans to expand its own exports of liquified petroleum gas — propane and butane — as it builds massive infrastructure along the Gulf Coast to prepare for that undertaking.  It’s already signed agreements to sell LPG to Chinese energy company Sinopec.

“We think free trade works best,” Garland added. “What we would say is we think you’ve got to have open access.”

Still, Garland said he isn’t very confident U.S. policy on crude exports will change any time soon. “In an election year, I think it’s going to be difficult for Congress to move on this issue simply because they have too many other things on their plate,” Garland said. “Politically, it’s a very difficult thing right now.”

Reporter Jennifer Dlouhy contributed to this report.

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