Energy Secretary Calls Oil Export Ban Dated

Houston — Signaling a possible break with 40 years of energy policy, Energy Secretary Ernest Moniz has suggested that it may be time for the Obama administration to reconsider the nation's ban on exporting domestically produced crude oil.

Congress made most oil exports without a license illegal in the 1970s to conserve supplies at a time when OPEC oil embargoes produced long lines at gas stations and threatened the American economy. But over the last five years a frenzy of oil drilling in shale rock formations in Texas and North Dakota have produced a glut of crude in the Midwest and Gulf of Mexico states.

"Those restrictions on exports were born, as was the Department of Energy and the Strategic Petroleum Reserve, on oil disruptions," Mr. Moniz said in remarks to reporters at the Platts Global Energy Outlook forum in New York on Thursday. "There are lots of issues in the energy space that deserve some new analysis and examination in the context of what is now an energy world that is no longer like the 1970s."

The Energy Department does not have the power to relax restrictions on exports but Mr. Moniz said the it would be willing to produce technical analysis on the issue for the Commerce Department which issues the export licenses.

Oil companies are lobbying to allow exports, arguing that the United States could substantially increase export earnings from selling high-quality crudes abroad. That type of crude oil is not always easily refined by American refineries that were outfitted for processing lower-quality crudes imported from Mexico, Venezuela and the Middle East.

The lobbyists argue that such exports could lower global oil prices, which would bring relief for American consumers. But others, including influential members of Congress, say that oil exports would actually raise domestic gas prices and threaten domestic oil supplies during times of crisis in the Middle East or in Africa.

Mr. Moniz's remarks were welcomed by oil company executives as a sign that the administration may be moving in their direction on exports.

"If the Department of Energy and others push on Commerce, then maybe they can get it over the hump," said Chip Johnson, president and chief executive of Carrizo Oil and Gas, a midsize Texas-based oil company active in the shale oil fields. "I think we should keep national security first, but we should export oil just like anything else."

Oil companies are already beginning to export more oil to Canada since those export licenses are relatively easy to obtain. Canada is the largest exporter of oil to the United States, but since many grades of American oil are selling at a discount to global benchmarks, eastern Canadian refiners are buying American crude to process into diesel and gasoline.

Over the first 10 months of the year, the United States exported an average of 95,000 barrels of crude oil a day, mostly to Canada, according to the Energy Department. Over the same period in 2012, the United States exported an average of 67,000 barrels a day and 23,000 barrels a day in 2007, when American oil production began its expansion.

Some analysts predict that exports to Canada will soon approach 200,000 barrels a day.

But some Democratic lawmakers are already voicing concerns about exports.

Senator Edward J. Markey, Democratic of Massachusetts, said in a statement this week, "The growing chorus from the oil industry to change longstanding U.S. law to permit the export of American crude oil is a disturbing trend." He added, "This oil should be kept here in America, to benefit our consumers and to reduce our dependence on imports from the Middle East."

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