Swapping Oil with Mexico

New Policy Eases Oil Export Ban
Oil Export Ban

Oil May Soon Flow to Mexico

Producers in the Eagle Ford are one step closer to being able to ship light crude to Mexico, thanks to a new policy by the U.S. Commerce Department last Friday.

Related: Eagle Ford Companies Eye Mexico

The Commerce Department has given permission for a limited amount of oil to be exported to Mexico. The agency approved an application from Pemex, Mexico’s national oil company, that would allow for the U.S. to exchange our light crude for Mexico’s heavy crude. The amount of crude that would be involved is minimal, but the new policy is significant because it signifies a shift in opinion about the oil export ban that has been in effect since the 1970’s.

Representative Henry Cuellar released a statement saying, “Texas will gain tremendously from this oil swap agreement. The petroleum industry in Texas, in large part due to shale production, such as the Eagle Ford Shale in my district, has revitalized our nation’s economy. These swaps will further positively impact energy exploration in Texas and the United States.”

Many senators hope that lifting the export ban will level the playing field by doing away with restrictions that hinder America’s economic growth and that threaten our long-term goal of becoming energy independent. In June, Heidi Heitkamp took to the Senate floor to try and persuade fellow lawmakers that the oil export ban is not good for the country. Read more

Oil Export Ban: No Fans in Texas

Officials Urge Congress to Repeal Outdated Policy
Oil Exports Bad for Eagle Ford

Oil Exports Bad for Eagle Ford

Railroad Commission Chairman David Porter joined Governor Abbott and other Texas legislators to urge the federal government to lift the ban on oil exports.

Related:Heitkamp Urges Repeal of Oil Export Ban

At a hearing before the U.S. Agriculture Committee this week, Porter testified to the immediate need for Congress to lift the ban on the archaic and outdated policy and made the case that keeping the 40 year old law is bad for Texas and the whole economy.

Related: Oil Export Ban Hurts Eagle Ford

Porter testified that, “Technological advancements have allowed U.S. producers to tap new sources of oil and natural gas from shale formations, including from the Permian Basin and Eagle Ford in Texas. Development of our shale resources has been a game-changer and presents the US with the opportunity to be the world’s largest producer of both oil and natural gas.”

Highlights of Porter’s testimony to lift export ban:

  1. Increase production resulting in new jobs, economic growth, increased state and federal revenue. U.S. GDP would increase by $38.1 billion in 2020 and every state and congressional district would also benefit from increased oil production due to the expansive supply chain it supports.
  2. Consumers would save money at the pump
  3. Enhance free trade and lower the U.S. trade deficit
  4. Strengthen our national security

Read the full testimony at rrc.state.tx.us

Pioneer CEO Confirms Condensate Exports to Europe

Condensate Exports Fuel Conversation for Lifting Oil Export Ban
Pioneer Central Gathering Plant

Pioneer Central Gathering Plant | Click to Enlarge

Pioneer Resources CEO Scott Sheffield confirmed this week the company has exported its second round of condensate exports – this time to Europe – during an investor webcast presentation. The first exports were to the Asian market in South Korea in July.

In June, Pioneer and Enterprise Products Partners, a midstream service provider, received permission from the U.S. Commerce Department (U.S. DoC) to export minimally processed condensate to foreign buyers. Other major operators in the Eagle Ford like BHP Billiton have also applied for permits, but have not gotten the nod from the U.S. DoC.

Read more: Eagle Ford’s BHP Billiton Seeks to Export Condensate

Sheffield said, “I expect the commerce department to approve several more permits, primarily for condensate, in the Eagle Ford, as long as it goes through the distillation process. I am optimistic this administration or the next one will remove the export ban.”

The pressure to lift the oil export ban is mounting from other industry executives. This week, Shell’s CEO Ben van Beurden urged Barack Obama to lift the ban during a speech he gave at Columbia University.

Van Beurden said, lifting the ban “would reinforce the long term future of North American energy production, and help make the global energy system more stable.”

Under the oil export ban, refined products can be exported. Pioneer’s minimally processed condensate exports are considered a refined product by the U.S. DoC.

Listen to the Pioneer Webcast