INTERVIEW: US EIA Chief Floats Idea of More U.S. Crude Exports

Date : 07/02/2012 @ 5:00PM
Source : Dow Jones News
Stock : Exxon Mobil Corp. (XOM)
Quote : 81.65  0.39 (0.48%) @ 4:36PM

INTERVIEW: US EIA Chief Floats Idea of More U.S. Crude Exports

Cheniere (AMEX:LNG)
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   By John M. Biers 
 

NEW YORK--Stepping into potentially controversial territory, the new chief of the Energy Information Administration said the U.S. should consider permitting more U.S. oil to be exported.

EIA Chief Adam Sieminski said policy makers should consider the costs and benefits of increasing U.S. crude exports now that the U.S. is one of the fastest-growing oil producers in the world.

"We should weigh very carefully the benefits and costs of exporting and decide on that basis, rather than assuming exporting oil is bad," Mr. Sieminski said. "You could be better off from the standpoint of jobs, the external trade balance" and other public policy priorities if you allow exports.

Mr. Sieminski's comments underscore how much the world of energy has been roiled by the surge of U.S. production from unconventional wells. U.S. oil output in the first quarter of 2012 topped 6 million barrels a day for the first time since 1998 on the strength of unconventional petroleum output, according to EIA data.

Mr. Sieminski, whose agency collects data and does not make policy, said that there have been some studies that show that crude prices would rise in the U.S. if more oil was exported. He also noted that even with major new domestic sources of oil, such as the Eagle Ford shale in Texas and the Bakken shale in North Dakota, the EIA continues to forecast the need for some 7.5 million barrels a day of imported oil in 2035.

U.S. oil exports are heavily restricted by laws that date to the 1970s, and increasing crude exports would require explicit government approval. Yet Mr. Sieminski said such a move could be more efficient since much of the new unconventional oil coming on line is high-quality light sweet crude, whereas much of the U.S. refining capacity is configured for lower-quality crudes.

"It's possible it makes sense to export, even if we're a net importer," Mr. Sieminski said.

Cheniere Energy Inc. (LNG) won approval in 2011 from the U.S. Energy Department to export natural gas. However, several other companies have yet to receive approval for the exports. Some U.S. lawmakers have criticized other applications to export natural gas, saying U.S. energy security would be better served by keeping the gas at home.

-Write to John Biers at john.biers@dowjones.com




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