Rent seeking refiner seek to keep US from exporting crude

Fuel Fix:

Four refining CEOs are pleading for their side to be heard in the coming congressional debate over crude exports.

“The implications of lifting restrictions on exporting domestic crude are less well known to lawmakers, much less the public,” said the executives from Alon USA, Monroe Energy, PBF Energy and Philadelphia Energy Solutions.

The foursome, all members of the group Consumers and Refiners United for Domestic Energy, highlighted their concerns in a letter Tuesday to the new chairwoman of the Senate Energy and Natural Resources Committee, Lisa Murkowski, R-Alaska.

So far, Murkowski has been a leading force calling for an end to the 40-year-old ban on exporting most U.S. crude, and her role heading the energy panel boosts her chances of advancing legislation on the subject.

It also means that Murkowski and her staff on the committee will decide what kinds of hearings are needed to delve into the topic — and what witnesses should be testifying about it.

The refiners suggested that the issue of crude exports is distinct from other energy policy questions — including an ongoing debate over the Keystone XL pipeline — because it is less well understood.

Under current regulations, gasoline, diesel and other refined petroleum products can be exported, but most U.S. oil is off limits from foreign sale. There are exceptions for some Californian crude, oil from Alaska and exports to Canada. And trade regulators at the Commerce Department last year clarified that an ultralight oil known as condensate qualifies for export once it has been processed in a distillation tower.

Oil producers have been clamoring for a chance to sell crude overseas, warning that domestic production of light sweet crude eventually could exceed the capacity of U.S. refiners to process it.

Refiners, meanwhile, have countered that they have plenty of spare capacity for light, sweet domestic crude — and they can make changes to bring even more into their facilities.
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The current policy allows refiners to take cheap domestic crude and resell it as refined products for exports.  It is a good deal for them but not necessarily for the US as a whole.  If the US could export crude directly it would allow producers to get the world price for their product making many wells more viable.  Increased domestic production would make the US stronger and create more jobs.