US oil exports soar to new milestone

WASHINGTON — U.S. oil exports hit a 15 year high in April, despite broad limitations on foreign sales, according to a report released Monday by the federal Energy Information Administration.

The nation sent an average of 268,000 barrels of oil overseas every day in April, an 8.9 percent jump from March. Most of the exported crude came from the Gulf Coast, and much of it landed in Canada.

Although a 39-year-old law largely forbids crude exports, there are exceptions for some California crude, Alaska oil and shipments to Canada. Gasoline and other refined products also can be freely sold overseas.

Most of the Gulf Coast crude flowed out of the Port of Houston, although Port Arthur, Texas and New Orleans, La., are other top crude-loading spots in the region. The Eagle Ford Shale in South Texas produced much of the crude exported from those ports.

Report: Crude exports would be economic boon

According to the EIA, Gulf Coast crude exports averaged 134,000 barrels per day during the first quarter of 2014, nearly four times higher than the region shipped out last year.

Overall, U.S. exports have been rising steadily since late last year, and setting records all along the way.

With domestic crude production climbing — reaching 8.2 million barrels per day in March, a 57 percent leap over five years — some oil companies and their allies on Capitol Hill are asking the Obama administration to further relax the export ban or lift it entirely. They say that exports to Canada and other foreign transactions otherwise allowed under the existing ban aren’t sufficient to relieve the pressure of climbing production.

A previous EIA report suggests there are limits to how much of the light, sweet crude flowing out of U.S. wells in Texas, North Dakota and other states can be put to use inside the country.

But U.S. refiners — who already have replaced most imports of light oil with domestic supplies — say they can take further steps to absorb more of the U.S. crude, including supplanting intermediate quality oil. If the price is right, refiners also can be encouraged to back out even heavier, lower quality crudes, despite adding tens of billions of dollars in equipment to process them.

Unclear path: History of gasoline and oil exports murky

The research firm IHS has described a steady ramp up of refinery changes that could further boost the amount of high-quality U.S. crude being used domestically. But the modifications come with a cost.

IHS Managing Director Kurt Barrow said some of the tougher changes, which involve shrinking capacity overall to use more light, sweet crude, will only happen “at the right price signal.”

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