It is no small piece of energy news that the Commerce Department is granting two US energy companies the ability to export ultralight oil internationally.
As many in the energy industry are aware, up until now, only refined oil, for example, already processed into gasoline or diesel, was allowed to be sent internationally while crude oil was banned. This policy was set up in the 1970s in the context of the Arab oil embargo. Frequent news pieces have focused on shedding light on this interesting rule and there has been a movement, given the fracking and US energy boom, to question the historical roots of this policy and push for a change.
So, can crude oil be exported internationally? Almost- ultralight oil can!
Officially, the oil that can be exported is defined as ultralight oil, which is very close to being crude but is slightly processed. However, this ultralight oil can be shipped out could then be distilled into gasoline, jet fuel, and diesel fuel. (Fox News 06-25-14). The companies that receive this special exporting permission starting in August are Enterprise Products Partners and Pioneer Natural Resources.
According to the Wall Street Journal, Alaska Senator Lisa Murkowski reacted to the news in support, “That reflects the new reality of our energy landscape” and added “I continue to urge the administration to fully lift the ban on crude oil and condensate exports.” Massachusetts Senator Edward Markey argued that the change “puts America on a slippery slope to send more of our oil abroad….We should keep our resources at home.” (Wall Street Journal 06-25-14).
There are lots of opinions on this topic and time will tell what happens next. We will be following this developing story closely and expect more news on this soon.