Reuters: Regulatory News: Rising US crude output may open door to exports-API head

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Rising US crude output may open door to exports-API head Jun 15th 2012, 23:50 Fri Jun 15, 2012 7:50pm EDT * U.S. currently restricts crude oil exports * US crude oil output for first quarter highest in 14 yrs * Gerard says sees change in attitude of Obama admin By Ayesha Rascoe and Timothy Gardner WASHINGTON, June 15 (Reuters) - As U.S. oil production climbs to record levels, the United States should eventually consider easing its restrictions on crude exports, the head of a powerful oil lobbying group said on Friday. U.S. oil production hit the highest quarterly level in 14 years in the first three months of 2012, the government said last week, as technologies including hydraulic fracturing, or fracking allow drillers access to vast new reserves. America's changing energy fortunes call for more support of domestic oil and gas production, and possibly an eventual shift in U.S. energy export policy, American Petroleum Institute President Jack Gerard told Reuters in an interview. "It's a serious consideration as we continue to produce more and more in this country," Gerard said at API's Washington D.C. office. While crude oil products such as gasoline and diesel can be exported from the United States, the Mineral Leasing Act of 1920 and the Outer Continental Shelf Leasing Act requires a presidential waiver for the sale of most unrefined crude oil abroad, essentially banning exports. Even with the rise in crude oil production, the United States still imported nearly 56 percent of the crude it used in April, according to data from API. Gerard also supports more export of liquefied natural gas, an issue the Energy Department is currently weighing. He argued that blocking exports in an attempt to artificially constrain prices would lower production. "A lot of the early concern about exports is a knee-jerk reaction," Gerard said. "If you leave that market alone, it will find its equilibrium." Some lawmakers have called on the White House to limit growing energy exports out of concern that selling crude products and gas to foreign sources could lead to a price spike in the United States. Record high gasoline prices near $4 a gallon nationally have been a big issue on the presidential campaign, as well, with Republicans blaming the Obama administration for high fuel prices. REACHING OUT Representing major oil and gas companies such as Exxon Mobil and Chevron, Gerard has been a prominent player in energy policy debates since joining API in November 2008. Gerard has been a vocal critic of the Obama administration's energy agenda, which in its early days, he said, favored renewable energy and ignored fossil fuels. With the Nov. 6 election looming, the White House has been more amenable to oil industry concerns, giving drillers more time to comply with recently finalized air rules from the Environmental Protection Agency. Gerard said API is in constant contact with all levels of the administration, pointing out he had two or three calls with officials on Friday. "There have been a number of meetings where you can clearly see a different attitude and a different approach to energy," Gerard said. "We wish it would've come sooner." API has been taking its message about the importance of oil and gas production on the road recently, holding meetings with local groups in states like Colorado and Missouri as part of an effort to make energy a part of national discussion ahead of the November elections. Link this Share this Digg this Email Reprints

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