Friday 20 April 2018

US must decide on crude export ban: IEA chief

Washington, July 16, 2014

The United States must decide soon whether to overturn its nearly 40-year ban on oil exports or it risks inhibiting output from the domestic drilling boom, the executive director of the International Energy Agency said on Tuesday.

"Do you want to be an energy island that is fenced in or do you want to be a huge (oil) producer at the same time as being a huge consumer?" Maria van der Hoeven told Reuters in a wide-ranging interview about energy policy.

"As far as I know, the United States was always in favour of an open market," said van der Hoeven, whose 29-member agency produces energy statistics and advises developed and emerging economies on energy security issues.

Washington took a step toward opening up oil exports last month when the Commerce Department told two Texas energy companies they could export a light crude called condensate if it has been minimally processed.

The IEA had anticipated the Commerce Department's move in a recent energy outlook report, as a glut of the light crude oil has built up in the US Gulf due to the domestic energy boom.

Van der Hoeven, who is based in Paris, wrote in a 2013 Financial Times opinion piece that the US would have to find export outlets to reach its full oil revolution potential.

IEA oil market analyst Antoine Halff, who was with van der Hoeven in Washington, said the Commerce Department's move confirmed her 2013 piece.

"What is happening is that condensate production is so high ... it's putting some pressure on the system to let some liquids out," said Halff.

Van der Hoeven said Asia and Latin America are so thirsty for condensates for production of both petrochemical products and motor fuel that it could be 20 or 30 years before there is too much in the global market.

US oil production could be hindered if Washington does not take more steps to reverse the decades-old ban, she added. But it is not the IEA's role to dictate policy.

"It's our work to raise issues. And ask questions and also urge countries to think about these issues because they have to find an answer," she said. "What I do think is important is we flag issues on energy security and (the U.S. crude ban) is one," she added.

Van der Hoeven praised an agreement last week between the US and China to cooperate on strategic petroleum reserves, the first such effort between the world's top energy consumers.

"Our statisticians were quite excited about this arrangement because it could be a decisive step in the right direction," she said. The IEA has been working with China and other non-IEA members like India and Brazil to improve transparency on how much energy they are using and producing.

"There is clearly an awareness in China that providing data is something that not only the market at large needs, but that they stand to gain by being more transparent," Halff said. - Reuters

Tags: US | IEA | Ban | oil export |

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