Oil Exports to Foreign Buyers Begins

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Pump Jack Image

After nearly four decades, the Obama administration has opened the door for U.S. exports of unrefined American oil, according to  The Wall Street Journal (WSJ).

The decision was approved in a private ruling by the Commerce Department's Bureau of Industry and Security, and will for now allow only two companies, Pioneer Natural Resources Co. and Enterprise Product Partners LP, to export Eagle Ford condensate after it has been minimally processed. Shipments, which are likely to be small, could begin as early as August, the paper noted.

Condensate, which is also referred to as ultra-light oil, and light crude oil make up a majority of production in the Eagle Ford Shale. As a general rule, lighter crudes and condensate are easier to process into refined products.

Light-Sweet Crude/Condensate Production Booming in the Eagle Ford

With production booming in the Eagle Ford, there has been chatter for some time about the easing of the export ban, as the supply of light sweet crude/condensate has begun to saturate the market and drive prices of Eagle Ford crude down. By 2020, consultancy Wood Mackenzie estimates crude and condensate production coming out of the Eagle Ford will reach 2-million b/d, which is nearly double current production.

WSJ reports the private rulings by the Commerce Department define some ultralight oil as fuel after it has been minimally processed, making the oil eligible for sale outside of the U.S. This new ruling flirts with current rules put into place after the Arab oil embargo in the 70s, which allow U.S. companies to export refined products such as gasoline, but not unrefined products (i.e. crude and condensate), with certain limitations and special licensing provisions.

Read more at wsj.com

Eagle Ford Economic Impact and Threats

Good Eagle Ford economic impact summary from the Caller in Corpus. 13,000 full-time jobs are related to Eagle Ford production and that number could grow to 70,000 by 2020. The number of permits being issued by the TX RRC has also skyrocketed. The agency issued 1,200 permits in the first half of the year compared to just 94 in 2009. The article goes on and Porter identifies the EPA and the government as the largest threat to the oil & gas boom in South Texas.

The economic frenzy Eagle Ford Shale drilling has ushered into South Texas will continue as long as the federal government gives the state breathing room to regulate development, a state official said.


South Texas continues to post impressive economic numbers because of drilling activity, Texas Railroad Commissioner David Porter told attendees at the Corpus Christi Chamber of Commerce's luncheon Thursday.

A University of Texas-San Antonio study completed earlier this year showed 13,000 full-time jobs tied to Eagle Ford production, Porter said.

By 2020, that number is projected to reach 70,000 jobs.

The Railroad Commission issued 1,010 permits for Eagle Ford drilling in 2010, commission figures show.

This year, the commission had issued more than 1,200 through June. Only 94 permits were issued in 2009, Porter said.