(Adds comments from hearing by Senator Murkowski)
By Timothy Gardner
WASHINGTON, April 2 The U.S. Commerce Department
could help energy companies start to bypass a 40-year ban on
most U.S. crude oil exports by allowing shipments of a type of
petroleum that has become abundant during the energy boom, a key
senator said on Wednesday.
The department's Bureau of Industry and Security (BIS) can
allow the exports of an unprocessed light oil called condensate
without an act of Congress, simply by modernizing its definition
of crude, Senator Lisa Murkowski, a Republican from Alaska, told
a House of Representatives subcommittee.
"Commerce has taken similar measures in the past," said
Murkowski, adding that lifting the ban overall would generate
wealth, create jobs and enhance national security.
Murkowski has become the leading voice in Congress for
relaxing the U.S. export ban. Her office released a report on
Tuesday to support her position. (Murkowski report: r.reuters.com/qur28v)
The U.S. crude oil export ban introduced after the 1973 Arab
oil embargo includes a prohibition on exports of unprocessed
condensate, which exists underground as a gas while crude oil is
"The Commerce Department has often modified its regulations
without either congressional intervention or presidential
finding, during both Republican and Democratic administrations,"
Murkowski's report said.
BIS was not immediately available to comment on the report.
Thanks to advanced techniques, including horizontal drilling
and hydraulic fracturing, the United States has risen to become
one of the world's top three oil producers, along with Russia
and Saudi Arabia, a development energy experts did not think was
possible a few years ago.
Supporters of lifting the crude export ban, including Harold
Hamm, chief executive officer of energy company Continental
Resources Inc, have said that exports would add jobs at
home and strengthen oil security abroad. U.S. exports could help
counter aggression by Russian President Vladimir Putin, Hamm
testified last week in the House.
If condensate exports were allowed, it would be a small but
important first step in opening U.S. oil sales to global
markets. Exports of refined products such as gasoline and diesel
are already allowed. Condensate exports could reach between
100,000 and 300,000 barrels per day if the BIS grants licenses,
Citigroup analysts said in a recent research note.
Lifting the ban on shipping unprocessed condensate overseas
could help big producers such as Apache Corp or EOG
While pressure is building on President Barack Obama to lift
the wider ban on crude shipments, few analysts think an outright
reversal will come soon.
The United States still imports much of its oil, so it could
be a few years before it has so much that most companies will
need to find new markets in order to keep drilling. And no major
legislation to lift a ban exists, in part because few lawmakers
in an election year want to support a measure that could be
blamed for raising motor fuel prices.
A wholesale lifting of the ban could also raise the ire of
environmentalists opposed to domestic drilling and the emissions
associated with crude.
(Reporting by Timothy Gardner; Editing by Ros Krasny, Matt
Driskill and Lisa Shumaker)