Shell CEO Says US Should Export Oil to Stabilize Markets

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Release: 2014-09-04 10:24

U.S. oil and natural gas exports "would reinforce the long-term future of North American energy production," significantly improve the U.S. balance of trade, and "help to make the global energy system much more stable," he said.

The United States has banned most crude exports since the Arab oil embargo of the 1970s. But pressure on the Obama administration and on Congress to overturn the restriction has risen amid the domestic shale energy boom of the last several years. The United States is soon expected surpass Saudi Arabia and Russia to become the world's top oil producer.

The Commerce Department in March allowed two companies, Enterprise Product Partners and Pioneer Natural Resources, to export an ultra light form of oil called condensate. The ruling became public in June. But since then at least three applications for more condensate exports have been put on hold.

Meanwhile, Washington has approved several applications to export natural gas, with the first shipments expected next year.

In his first major public speech since becoming CEO of the energy firm in January, van Beurden said that gradually lifting the ban would be good for U.S. fuel consumers because it would allow the country's oil production to keep growing and to keep oil flowing to global refiners. That should keep fuel prices from spiking, he said.

"I don't think it would be sensible to argue for an immediate opening overnight, but a systematic and gradual opening up of the export ban would be a sensible thing to do," he said.

Congress is not expected to overturn the crude export ban any time soon. Many lawmakers are concerned that by doing so they could be blamed if gasoline prices rose, even if a price move was caused by other factors.

The Obama administration could take other steps, though, such as allowing crude oil swaps. But there are no indications of that happening soon either.

“At this point our policy regarding crude oil exports remains as is," Commerce Secretary Penny Pritzker said on a teleconference with journalists on Tuesday.

Source: Reuters

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