U.S. RULING LOOSENS FOUR-DECADE BAN ON OIL EXPORTS
Shipments of Unrefined American Oil Could Begin As Early As August
By Christian Berthelsen And Lynn Cook - wsj.com
Updated June 24, 2014 8:28 p.m. ET
Excerpt
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.
Link to full article:
http://online.wsj.com/articles/u-s-ruling-would-allow-first-shipmen...
Views: 650
Replies to This Discussion
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Permalink Reply by tc on
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The title of the article is a little misleading, because crude oil is not being allowed for export. Only ultralight oil, known as condensate, is being allow for export and first it needs to be "stabilized" and "distilled".
When I tried to look at Skip's post, I couldn't read the article, but this worked for me.
http://online.wsj.com/articles/u-s-ruling-would-allow-first-shipmen...
Another article about shale oil and ultralight oil.
http://online.wsj.com/articles/oil-from-u-s-fracking-is-more-volati...
A bonus article for you natural gas fans about Pennsylvania looking into imposing a gas production (severance) tax of 5%.
http://online.wsj.com/articles/pennsylvania-weighs-new-tax-on-natur...
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Permalink Reply by Skip Peel - Mineral Consultant on
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The WSJ isn't above choosing slightly misleading titles for articles as that is journalism today even for proud, old publications. I found the concept of a private ruling curious but hope that the article's premise that this is a first step to wider, less restrictive regulations proves accurate. The industry change in strategy from lobbying for the unrestricted export of crude to the export of condensate was reported earlier in the year. Considering that a significant proportion of new "liquid production" is condensate and that American refineries are not configured to maximize the use of lighter oils and condensate, it is a logical move to alleviate the production glut that is building and to make the products more valuable on the open market.
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I think that politicians will use this limited export as a test to gauge voter and PAC opposition. Will a company like Dow Chemical that wants the cheaper oil to feed it domestic chemical operations, fund a PAC to create attack ads. There is enough "fuel" with this issue to burn a politician who sticks his neck out too far.
I have a subscription for the WSJ because it still is a great paper. Most people don't realize how much non-business items are in the paper, section D is a gold mine of various info.
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Permalink Reply by Skip Peel - Mineral Consultant on
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tc, I think the voters are generally uninformed on the issue (condensate/ultra light crude vs lower API gravity crudes and refining constraints) and would react by supporting the continuation of regulations banning export thinking it would hold down the price of gasoline. I agree that we are in for a public relations battle between producers and chemical industry end users over export. It will be interesting to see the public reaction and how it plays out with politicians. This will be a contest between two huge special interest groups.
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Permalink Reply by jim weyland on
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skip, per the houston chronicle's article, the condensate must be run through a distillation column to qualify for export, crazy
jim
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Permalink Reply by Skip Peel - Mineral Consultant on
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Pioneer Natural Resources Co. and Enterprise Products Partners LP agreed to that stipulation so I'll reserve judgement. If it's a foot in the door leading to less restrictive export limits in the future it won't matter in hind site that it started off crazy.
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i can't help but think their condensate will be shipped via an epd p/l to the mt belvieu area where it'll be run through an epd distillation unit then loaded for export at an epd terminal.
'value chaining' in epd's finest tradition.
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Permalink Reply by Skip Peel - Mineral Consultant on
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EXCLUSIVE: U.S. ENERGY VENTURE SAYS ITS REFINERIES WOULD PRODUCE EXPORT-READY FUEL
By Patrick Rucker
WASHINGTON Fri Jun 27, 2014 4:39pm EDT
(Reuters) - Quantum Energy Inc (QEGY.PK), a U.S. energy venture, intends to build a network of "micro refineries" that would produce fuel fit for export, an executive said on Friday.
The Williston, North Dakota, enterprise plans to build five "micro refineries" near railheads that would house facilities to strip natural gas, refine liquid fuels and recapture carbon dioxide, the company said.
Each facility would run about 100,000 barrels per day through a stabilizer and subsequently refine 20,000 barrels per day into household gas, diesel fuel and other petrochemicals.
The remaindered of the fuel, about 80,000 barrels per day, could be carried on the rails to domestic or foreign customers, Quantum's executive vice president, Russell Smith, told Reuters.
"The Bakken crude we would process would quality for export under the existing rules," he said.
On Thursday, Smith testified about the export potential for Bakken fuel at a U.S. House of Representative small business hearing.
Quantum Energy will fund its projects with a blend of equity and debt financing, Smith said, and the company expects that each processing center would cost about $500 million.
(Reporting By Patrick Rucker; Editing by Sandra Maler)
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Permalink Reply by jffree1 on
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So, the intent is to ship fuel gas and diesel long distance by rail tanker, now, in addition to raw crude? Do we do this now? I know we distribute gasoline & propane locally/regionally on our highways every day but I'm not informed about what goes by rail and the safety considerations. Thinking about the fires and loss of life which have already occurred due to rail accidents.
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Permalink Reply by Two Dogs, Pirate on
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The railroads haul stuff that is way more dangerous than oil products.
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I didn't mean to sidetrack the discussion. That was just a first thought. Thanks.
Back on topic... I know there needs to be an efficient and cost effective way to produce. This may prove to be such a model.
I'm waiting for Montana to address the waste (to the state and mineral owners) re: associated gas which continues to be flared in the Baaken. Is there enough gas produced to warrant the construction of new chemical plants in Montana or somewhere nearby?
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"Is there enough gas produced to warrant the construction of new chemical plants in Montana or somewhere nearby?"
I think the answer is no, as it is most likely cheaper to transport NG to an end user, than it is a chemical product. The best hope would be some sort of fertilizer plant for the wheat & corn growers.
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