U.S. Sen. Robert Menendez (D-NJ) has seized upon recent comments by Energy Secretary Ernest Moniz to urge the Obama administration to not allow export of U.S. crude oil.
"When Congress first enacted limits on crude exports in the 1970s following the oil embargo, these laws were designed to enhance American energy security and protect U.S. consumers from volatility and price spikes," Menendez told the president in a letter this week. "Despite changes in the global energy market, these goals should remain priorities in our nation's energy policy. Easing this ban might be a win for Big Oil, but it would hurt American consumers."
Moniz made his remarks about the possibility of exporting crude to reporters last Thursday at Platts Global Energy Outlook Forum in New York City. During his talk he remarked on how much the world has changed since the oil embargo and gasoline scarcity in the United States. He also said at the event that the Obama administration's support for growing domestic oil and gas production is not in conflict with the goals of reducing greenhouse gas emissions and combating climate change.
U.S. Department of Energy (DOE) spokesman Bill Gibbons later told NGI that DOE is not evaluating the export of domestic crude and that it is a matter "under the purview of the Department of Commerce."
Menendez has been a critic of oil companies. He introduced the "American Oil for American Families Act" twice and has fought against what he considers to be tax loopholes enjoyed by "big oil."
The idea of relaxing or removing the ban on U.S. exports of domestically produced crude oil is rising on a tide of light sweet crude production from shale plays that is not well suited for U.S. refineries. Pro- and anti-export interests have been raising their voices.
Last week, U.S. Sen Edward Markey reacted to reports that ExxonMobil Corp. has joined other major oil producers, such as Royal Dutch Shell plc and ConocoPhillips, in calling for the United States to begin exporting crude (see Daily GPI, Dec. 13).
"The growing chorus from the oil industry to change longstanding U.S. law to permit the export of American crude oil is a disturbing trend," Markey said. "There can be no doubt that this is now a coordinated attack by the oil industry on the U.S. law that bars exports of crude oil from the United States. This oil should be kept here in America, to benefit our consumers and to reduce our dependence on imports from the Middle East."
However, if it is a "coordinated attack," the industry-funded American Petroleum Institute (API) appears to be distancing itself from the latest pro-crude export talk. "We stand with the president and this administration's efforts to double American exports and reduce our reliance on imports," API spokesman Carlton Carroll said. "API's trade focus continues to be on natural gas exports, and the opportunity they present to reduce our trade deficit, grow the economy, and create jobs."
Earlier this month, Markey highlighted an "API planning document" that he said had been obtained by news service Bloomberg that reportedly said API was planning to highlight potential World Trade Organization (WTO) violations of U.S. law restricting the export of domestically produced crude. However, around that time the industry was suggesting that the U.S. might be in violation of WTO rules by restricting liquefied natural gas exports; nothing was said about exports of U.S. crude (see Daily GPI, Dec. 3).
The United States is slowly marching toward becoming an exporter of domestically produced natural gas in liquefied form. However, DOE has been criticized by many in the energy industry for dragging its feet on approving exports to non-free trade agreement countries (see Daily GPI, Nov. 21).
In 2011 the United States became a net exporter of petroleum products for the first time since 1949. Propane exports have been growing and are expected to increase as numerous terminal projects are planned to ship more of the commodity abroad, thanks to abundant production of natural gas liquids from shale plays (see Daily GPI, Nov. 4; Oct. 3).