On the tail end of 2014, the Obama Administration gave hinted at a major breakthrough for U.S. petroleum exports when the Commerce Department’s Bureau of Industry and Security (BIS) told oil companies that they should consider exporting a lightly processed form of crude oil called condensate without formal permission, according to a recent Reuters report.
The impact of America becoming a major oil exporter is still heavily speculative. However, in a report from News Radio 1200 WOAI, economist and professor at UTSA Tom Tunstall is predicting this will open a whole new market for petroleum flowing from Eagle Ford country.
“We are maximizing the refining capacity along the Gulf Coast, and if they can’t refine it and they can’t export it, then they are stuck with having to build the storage containers to store it,” Tunstall said.
Although particular refined oil products such as fuels and natural gas have leeway in exporting, the 1975 Energy Policy and Conservation Act bans exporting unprocessed condensate and light crude. Opening this, even partially, would pour new life into the shale producing regions of the U.S. “It doesn’t seem to make sense that we can export refined products and we can export natural gas, but we can’t export crude oil,” Tunstall said.
Additionally, Brent crude is still resting under $60 per barrel. The U.S. rig count is the most recent victim of low prices when the total dropped 35 last week to 1,840. Although eventually, we can expect the price to rise later in 2015, and having an export avenue could help struggling producers find new market to sell in. Read the full story from 1200 WOAI here.