Industry not made case for crude exports: Moniz

OREANDA-NEWS. April 24, 2015. US energy secretary Ernest Moniz said today the oil industry has not yet made a compelling case for relaxing decades-old restrictions on US crude exports.

Moniz, speaking on the sidelines of the IHS CERAWeek energy conference in Houston, Texas, said that with the US still importing about 7mn b/d of crude "I do not think a totally compelling argument can be made on the basis of pragmatic economics."

The US imported 7.15mn b/d of crude in January and exported 491,000 b/d, all to Canada, US Energy Information Administration data show.

Moniz deflated industry hopes a year ago, when he faulted the industry for not doing "a very good job of clearly and precisely stating the case."

Over the last year, industry officials have been touting a series of reports that conclude lifting the export controls would allow US crude prices to more closely match Brent prices, while putting some, minor downward pressure on retail gasoline prices. A 17 March IHS report found that restrictions on crude exports is exacerbating the challenges producers are facing in this new era of lower oil prices.

US producers have made a concerted lobbying push to get their views heard. On 11 March, ConocoPhillips chief executive Ryan Lance, Marathon Oil chief executive Lee Tillman and executives from nine other members of Producers for American Crude Oil Exports met with President Barack Obama's energy and environment adviser Brian Deese to discuss the export restrictions.

But Moniz said "there is not a dramatic change from last year in terms of the basic discussion."

Moniz pointed to a lack of action on Capitol Hill. "There has not exactly been a lot of motion towards addressing the issue," Moniz said.

Senate Energy and Natural Resources Committee chairman Lisa Murkowski (R-Alaska), who has been the most vocal advocate in Congress for lifting the export controls, has promised to introduce a bill to lift the export controls. Representative Joe Barton (R-Texas) has introduced his own measure in the US House of Representatives. Murkowski attributes the lack of movement to fears that prices might rise after the restrictions were lifted, and proponents would pay a political price.

Murkowski has adopted a new approach, arguing that if the US and other global parties allow Iran to export more crude oil if a nuclear agreement can be reached then US producers should have the same opportunity. Lance, US independent Continental Resources chief executive Harold Hamm and US independent Hess chief executive John Hess have all echoed those sentiments this week.

But Moniz said that with Iran's exports being restricted by sanctions, while the US needs imports to meet its daily needs, the two nations constitute "very, very different and very asymmetric situations."