The US largest independent oil companies are banding together to lobby for the right to export crude around the world, Fuel Fix reported.
The new venture, dubbed “Producers for American Crude Oil Exports,” is the first formal lobbying effort solely designed to take down the 39-year-old ban on selling most US oil overseas. With more than a dozen independent oil companies on board, the venture is a sign that the industry is revving up for a big, coordinated push to dismantle those trade restrictions next year, when a new Congress is sworn in and the Obama administration may have more political freedom to tackle the issue. Oil producers who have been clamoring for access to foreign markets say the deluge of light, sweet crude now flowing from US wells threatens to overwhelm domestic refiners geared toward heavier varieties. They also hope unleashing US oil on the world market will lift its price, removing a now-modest $4 discount for domestic WTI compared to the international Brent crude benchmark.
According to a legally required lobbying registration obtained by Fuel Fix, the effort is being funded by 14 independent oil companies that produce crude but do not refine it: Anadarko Petroleum, Chesapeake Energy, Concho Resources, ConocoPhillips, Continental Resources, Devon Energy, Encana Oil and Gas, EOG Resources, Hess, Laredo Petroleum, Marathon Oil, Noble Energy, Occidental Petroleum and Pioneer Natural Resources. Currently oil producers have been exploiting the ban’s existing exceptions — which allow exports of some Californian crude and Alaskan oil as well as shipments to Canada — to drive foreign sales to near-record levels. Oil exports hit 401,000 barrels per day in July, the highest level in 57 years, according to the most recent government data. During July, the exports included 400,000 barrels of lightly processed condensate, which the government has deemed a refined petroleum product that can be sold overseas.
A series of studies released this year predict that exporting US crude would boost the cost of domestic WTI while lowering gasoline prices from 1.5 to 13 cents per gallon. Predicted lower gasoline prices are tied to the theory that an influx of American oil on the world market would send the cost of Brent crude downward, especially if OPEC sustains its own production to preserve market share.
