White House Eyeing Changes to 1975 Law Curbing U.S. Oil Exports: Official on Platts Energy Week

May 20, 2014

The Obama administration is considering lifting or easing 39-year-old restrictions on exporting U.S. crude oil, though no final decisions have been made, a White House official said Sunday on Platts Energy Week.
"We're seeing huge production increases in crude. And so we're thinking through the implications of that, in terms of economics, environmental ... a whole bunch of dimensions," Dan Utech, a special assistant to the president for energy and climate, said on the all-energy news and talk show program.
"One of the things we're focusing on is the match between growing crude supplies and our refining capacity," Utech said. "So, we're looking at all that and we're going to evaluate policy options as needed."
Utech's comments, combined with recent statements by U.S. Energy Secretary Ernest Moniz and John Podesta, a top adviser to President Barack Obama, signal a strong administration interest in testing the validity of export restrictions Congress enacted in 1975 after the 1973 Arab oil embargo left the U.S. worried it might run short of oil.
Moniz first suggested the need for the review at a Platts conference in New York in December and last week during a visit to South Korea he confirmed that the issue is receiving attention from the administration.
One consideration noted by Moniz, Podesta and Utech is difficulty U.S. refineries are having absorbing the surge in U.S. oil production, including problems matching refineries' needs for certain grades of crude oil with the supplies coming from shale reserves in Texas and North Dakota.
The U.S. Energy Information Administration estimates the U.S. will double oil production from 2008 levels to 9.6 million b/d by 2019.     
Utech also indicated that the White House is satisfied with the pace of approvals by the Department of Energy (DOE) for applications to export liquefied natural gas.
"DOE has a process in place, and they're moving through it," he said.
DOE has approved six applications to export LNG to countries without free-trade agreements with the U.S., and 24 others are pending. The department has been criticized from some in the gas industry for not acting faster, especially now that the crisis in Ukraine is raising new questions about Europe's reliance on Russia for gas.
Among other issues, Utech said Obama can make a lasting and substantial impact on U.S. energy policy through executive actions, now that political gridlock in Congress has made enactment of major legislation all but impossible.
"I think that while we've tried hard and while the president is still open to working with Congress, we've got a number of good tools we can use," he said.
Among those options, he said, are plans by the U.S. Environmental Protection Agency to propose rules in June aimed at curbing carbon emissions from power plants.
Utech also defended the administration's latest delay in deciding on a permit to allow TransCanada to build the Keystone XL pipeline from oil sands in Alberta, Canada, to the U.S. Gulf