HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Main » General Discussion (Forum) » Crude Export Ban No Match...

Tue Feb 26, 2013, 10:33 AM


Crude Export Ban No Match for Lightest U.S. Shale Oil

By Bradley Olson and Mike Lee - Feb 26, 2013

A glut of shale oil in fields from Texas to North Dakota is forcing producers to find ways around the U.S.’s three-decade-old ban on crude exports in order to seek higher prices in foreign markets.

Kinder Morgan Energy Partners LP is among companies setting up mini-refineries to process certain grades of crude just enough to qualify them as refined fuels, which are legal to export.

The industry’s best hope is ultra-light oil, which is so abundant in shale rock that it has flooded the Gulf Coast and traded for a record discount to global benchmark Brent crude last quarter. Potential revenue for exports is $40 billion a year based on global prices, or about $9.7 billion more than what the same oil fetches in the U.S.

“It’s going to get exported in one way, shape or form or another,” said Ed Hirs, a professor of energy economics at the University of Houston who also runs a small production company in Texas. Producers will sell it abroad “as a product in its own right, or it’s going to be exported as a finished good, having become diesel, plastic or fertilizer.”



2 replies, 498 views

Reply to this thread

Back to top Alert abuse

Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Arrow 2 replies Author Time Post
Reply Crude Export Ban No Match for Lightest U.S. Shale Oil (Original post)
Purveyor Feb 2013 OP
leveymg Feb 2013 #1
bhikkhu Feb 2013 #2

Response to Purveyor (Original post)

Tue Feb 26, 2013, 11:17 AM

1. Isn't this evading the purpose of the law? Isn't that itself a crime? Why is gasoline so expensive

at a time that there's a glut of domestic production?

Where the f-ck is the Department of Justice?

Reply to this post

Back to top Alert abuse Link here Permalink

Response to leveymg (Reply #1)

Tue Feb 26, 2013, 11:34 AM

2. Its a glut of expensive-to-produce oil, so there's no "cheap" solution

Oil has to stay above $80-90 a barrel for it to be economically produced. If it gets cheaper, production shuts down.

Anyone who remembers the early 80's should be able to relate to how that works; oil prices tanked and thousands of stripper wells in the US shut down, as it was cheaper to plug the wells than it was to maintain production.

Reply to this post

Back to top Alert abuse Link here Permalink

Reply to this thread