(Adds background, Senator Markey comment)
WASHINGTON, June 24 U.S. officials have allowed
two companies to export a kind of ultra-light oil known as
condensates, a first step that effectively loosens a 40-year ban
on most U.S. crude exports, the Wall Street Journal reported on
The U.S. Commerce Department gave approval via a private
ruling to Pioneer Natural Resources Co and Enterprise
Product Partners LP to export the condensate, the
The companies and the Commerce Department did not
immediately respond to requests for comment.
Under current regulations companies can export U.S. refined
fuel like gasoline or diesel, but not crude oil.
The U.S. shale oil boom of recent years is expected to soon
make the country the world's top crude producer, surpassing both
Saudi Arabia and Russia. It has also led to a glut of light oil
in Texas and Louisiana that is difficult to process there
because refiners have invested billions of dollars to process
heavier oils from Mexico and Venezuela.
Some ultra-light oil could be reclassified as fuel after it
has been minimally processed, putting it in a regulatory gray
area that has been seen by some export backers as a way to ease
the ban on exports.
Reuters reported in May that U.S. oil producers, including
Pioneer, had met with the Department of Commerce's Bureau of
Industry and Security (BIS), which oversees exports.
Senator Lisa Murkowski, Republican of Alaska, said the move
on condensate was "a reasonable first step that reflects the new
reality of our energy landscape."
Murkowski, the top Republican on the Senate Energy
Committee, urged the White House to fully lift its ban on crude
oil exports, as she has all year.
A Senate aide said the shipments that will be allowed are
limited because they are "stabilized" condensates, or crude that
has been processed to remove light ends like butane gas so that
it can be sent through pipelines for shipping.
It was not immediately clear how much condensates the
companies would be able to ship though exports could begin as
soon as August. Pioneer Chief Executive Officer Scott Sheffield
said in March that recent U.S. oil production includes some
800,000 barrels per day of condensate.
Congress is not expected to pass legislation lifting the ban
on crude exports before the Nov. 4 elections, as no lawmaker
wants to be blamed for a move that could boost U.S. oil prices.
U.S. oil prices rose more than $1 to $107.05 a barrel
after the report.
Senator Edward Markey, a Massachusetts Democrat, blasted the
export approvals saying it puts America on a "slippery slope" to
send more oil abroad when the Middle East is in disarray and
tensions are high with Russia.
"Congress put this oil export ban in place. It should be
Congress that decides when and how to change it, not through a
private ruling by the Commerce Department without public
debate," he said.
(Reporting by Ros Krasny, Timothy Gardner and Valerie
Volcovici; Editing by Sandra Maler and Cynthia Osterman)