EIA Proposes Crude Gravity Survey

The Energy Information Administration wants to start collecting information about the density of oil produced in the U.S. to better inform the debate over lifting restrictions against crude exports.

The agency, which is the statistical arm of the Energy Department, would begin publishing the average API gravity and sulfur content of domestic crude oil on a state-by-state basis in December 2015, under a proposal published today in the Federal Register, according to Jim Kendell, who heads the EIA’s Office of Oil, Gas and Coal Supply Statistics.

Companies such as Exxon Mobil Corp. (XOM) have urged the U.S. government to ease restrictions against most exports of unrefined crude from the U.S. Others, such as Valero Energy (VLO) Corp., say the U.S. is benefiting from existing rules.

One issue at the center of the debate, the EIA said in its proposal, is the density of U.S.-produced oil. Proponents of lifting export restrictions argue that new U.S. production from shale plays in North Dakota and Texas is light crude, whereas many U.S. refineries are designed to handle lower-quality heavy oil.

“Collecting crude oil production by API gravity categories will inform the debate,” the agency said in the Federal Register notice.

U.S. crude production has grown 49 percent since the start of 2011, boosted by improved use of horizontal drilling and hydraulic fracturing in shale formations in North Dakota and Texas. Production from those formations tends to be low-density and low in sulfur content.

“Most knowledgeable observers see a glut of light oil coming out, but how big is that glut going to be?” said David Hackett, president of Irvine, California-based energy consultant Stillwater Associates. “To the extent the EIA can quantify for policy makers just how much light sweet oil is out there, I think that’s a good thing.”

To contact the reporter on this story: Dan Murtaugh in Houston at dmurtaugh@bloomberg.net

To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net Margot Habiby, Richard Stubbe

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