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Murkowski maintains oil export drumbeat Commerce Department relaxes rules on sending condensate abroad, but policy should be further liberalized, Alaska senator says Wesley Loy For Petroleum News
Alaska Sen. Lisa Murkowski continues to campaign for lifting the federal ban on exports of most domestically produced crude oil.
Her focus at the moment is condensate, a liquid hydrocarbon typically produced in association with natural gas.
Murkowski argues the export ban could constrain domestic energy production and the economy. U.S. production of light sweet crude and condensate has surged on the strength of plays such as the Bakken and the Eagle Ford, creating a mismatch with a domestic refinery sector not optimized to handle these supplies.
Lifting the 1970s-era oil export ban would provide relief, the senator argues.
Commerce policy shift Murkowski is the senior Republican on the Democrat-controlled Senate Energy and Natural Resources Committee.
On July 16, she met with U.S. Commerce Secretary Penny Pritzker.
“We had an open conversation about the Commerce Department’s approach to the question of U.S. oil exports,” Murkowski said in a press release. “I am encouraged that Secretary Pritzker is engaged and that there are ongoing discussions within the department on this issue.”
Many refined petroleum products can be freely exported, and recently the Commerce Department ruled some condensate also can be sent abroad so long as it first undergoes minimal processing - that it, it passes through a distillation tower.
“Condensate exports are an easy first step on the road toward a broader lifting of the oil export ban,” Murkowski said. “We are producing more condensate than the U.S. market can use, but customers overseas would be happy to purchase it. Commerce’s decision to classify processed condensate as a freely exportable petroleum product is consistent with the spirit and letter of the law, but it could go further.”
Federal misalignment Murkowski on July 9 released a report, prepared by her committee staff, titled “Terms of Trade: Condensate as an Exportable Commodity.”
The six-page report says several federal agencies routinely distinguish between crude oil and condensate, but the Commerce Department does not. These agencies include the U.S. Geological Survey, the Bureau of Ocean Energy Management, the Bureau of Land Management and others.
The Commerce Department “could align its practices with other federal agencies by adopting their approach, further authorizing exports of processed condensate and even updating its regulations to allow all condensate to be exported freely to global markets,” the report says.
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