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Oil Industry Needs to Make Case for U.S. Exports

March 5 (Bloomberg) -- The energy industry must do more to convince the American public that U.S. oil exports are needed from a country that still imports 5 million barrels a day, Energy Secretary Ernest Moniz said.

“I don’t think the industry has done a very good job of clearly and concisely stating the case,” Moniz said at the IHS CERAWeek conference in Houston today.

U.S. energy policies stemming from the 1973 Arab oil embargo severely restrict crude exports while applying no such limits to products that are processed in refineries. U.S. refiners are exporting record amounts of gasoline while producers contend with depressed oil prices. The U.S. is estimated to have surpassed Russia and Saudia Arabia last year as the world’s largest producer of oil and natural gas, according to the U.S. Energy Information Administration.

Oil companies from Chevron Corp. to Total SA have lobbied in speeches this week in Houston for an end to export limits. A failure to do so will slow the growth in crude output, Senator Lisa Murkowski, a Republican from Alaska, said March 3.

New drilling techniques including directional drilling and hydraulic fracturing in shale formations such as the Eagle Ford and the Bakken in North Dakota helped U.S. oil production grow by a record 1.136 million barrels a day last year to 8.121 million at year-end, according to the EIA. U.S. oil cost an average of $9 a barrel less than European crude last year, according to data compiled by Bloomberg.

The department has received a total of 35 applications from companies seeking to export natural gas and capture prices in Asia that are five times higher than domestic rates. The approvals so far would allow shipments of more than 9 billion cubic feet of gas, according to the department.

Five of six proposals to export natural gas that the Energy Department has tentatively approved are under review by the Federal Energy Regulatory Commission, Moniz said. One other project has received a license.

To contact the reporters on this story: Bradley Olson in Houston at bradleyolson@bloomberg.net; David Wethe in Houston at dwethe@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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