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Stagnant export reform obstructing new Texas projects

America’s ban on exporting petroleum is hindering, at least in one recent case, new commercial ventures for the Permian Basin and Eagle Ford Shale Plays.

Greg Armstrong, CEO and Chairman of the Houston-based Plains All American Pipeline LP, desires to export Texas-produced condensate, a particular form of ultra-light crude oil. The Houston Business Journal reports that the company is well positioned with its strong pipeline and terminal presences in Texas’ Permian Basin and Eagle Ford Shale, and the potential is there to build infrastructure to transfer condensate from West Texas to South Texas.

I think it wouldn’t be unreasonable for anyone to conclude — when you look at our asset base and our position — that it would be right down the middle of our fairway,” Armstrong said.”

But even with the recent rulings from U.S. Department of Commerce, which gave rights to Enterprise Products Partners LP and Pioneer Natural Resources Co. to export Eagle Ford condensate, many entrepreneurs are still restricted thanks to the 1975 Energy Policy and Conservation Act. However, in at least these two cases, condensate has been deemed a product and not crude oil.

These two cases are not enough to set the record straight, though, and folks like Armstrong are fed up with the uncertainty.

We were encouraged six or seven months ago when the BIS (U.S. Bureau of Industry and Security) and the government started talking about the issue early, because normally they wait until it’s a crisis to act,” he said. “Then the worst of all worlds happened when they issued two (rulings) that indicated that it was OK if you process it (condensate) to the level that we all agree makes sense. Then they quit issuing those because they’re not sure, because the politicians became involved, and they’re worried about gasoline prices. And now it’s more of a political issue than it is a common sense or logical issue.”

You can read more about the frustration over the oil export ban and the lacking political leadership over the issue from Houston Business Journal contributor Jordan Blum: Plains CEO: ‘I really hope the government gets their act together.’

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