The recent move by the Commerce Department’s Bureau of Industry and Security to allow a pair of Texas companies – Pioneer Natural Resources and Enterprise products – to export condensate has analysts debating the future of the U.S.’s long-standing ban on crude oil exports.
Technically, condensate doesn’t qualify as crude oil. And, according to the Wall Street Journal, “it isn’t clear how much oil the two companies will be allowed to export” when the projected August timeline arrives. But U.S. companies have been banned from exporting crude overseas since 1975, in response to an Arab embargo that cut global supplies, inflated oil prices and resulted in gas shortages here. So it’s only natural to wonder whether a U.S. energy policy shift is in the cards.
Congress has indicated the exports ban is still firmly in place and, in an election year, it’s unlikely anything game-changing will happen tomorrow. The latest forecasts from the U.S. Energy Information Administration, however, seem to indicate the conditions are right for pressure to continue to mount – that there’s a new energy reality facing the U.S. The EIA projects that U.S. crude oil production will hit production levels of 9.3 million barrels a day in 2015, the highest point in more than four decades. This leads one to wonder, could this lead to a surplus?
There’s a chance things may quiet around the topic in the months ahead, but the reality of the situation is not going away. There will continue to be questions and debate:
- Is it time to lift – or at least loosen – the ban?
- Is the U.S. poised to become a major player in the global oil conversation?
- What would it mean for the economy and for stability of prices at the pump and elsewhere?
- How would it impact the country’s focus on and support for renewable energy?
For the U.S., it’s uncharted territory.