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Murkowski Wants Condensate Export Ban Lifted; Applications Reportedly on Hold

With unconfirmed reports of a hold being placed on requests to export crude oil condensates by the U.S. Commerce Department, U.S. Sen. Lisa Murkowski (R-AK) on Tuesday continued her call for the agency to loosen restrictions on condensate exports.

"The mismatch between the light sweet crude that we're producing in Texas and the Eagle Ford and other places and refining capacity is distorting the market and risks us having to shut in wells in the future if producers can't get to market," said Robert Dillon, spokesman for Murkowski, the ranking member of the Senate Energy Committee. Murkowski "sees this boom in light sweet oil as a strategic asset that should be used to bolster the U.S. economy as well as help our friends and allies," Dillon told NGI's Shale Daily.

Commerce has put on hold at least two requests for permission to export crude oil condensate, according to a Reuters report. It was unclear when the hold was first placed on applications or how long it will remain in place, according to anonymous sources quoted by Reuters. The holds apparently cover condensate export applications filed by two different companies.

"These are unconfirmed reports," Dillon said. "We're not aware at this time that they are putting them on pause."

Earlier this month Murkowski renewed her call for expanding exports of crude oil condensates, saying the Commerce Department should align itself with the practices of a half-dozen other federal agencies that differentiate between crude and condensate (see Shale Daily, July 10). By recognizing that difference, Commerce would allow condensate to be exported alongside natural gas liquids and petroleum products, according to Murkowski.

In separate private rulings last month, Commerce's Bureau of Industry and Security confirmed that two companies could export processed condensate from the Eagle Ford Shale (see Shale Daily, June 25). The rulings were narrow and applied to only the two companies, but by confirming that Pioneer Natural Resources Co. and Enterprise Products Partners LP may export condensate under existing regulations, the Obama administration was seen by some as cracking the door to potential wider export of liquid hydrocarbons.

"Senator Murkowski has been a strong proponent of abolishing the ban altogether, and she would encourage the Commerce Department to continue its work on condensate. She thinks that was a good first step," Dillon said.

John Podesta, counselor to President Obama, said Tuesday that the decision to grant those permissions was "not coordinated with the White House," according to Reuters.

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