According to the Wall Street Journal, the US Commerce Department has approved two energy companies to sell condensate overseas. The approvals have not been announced publicly.
Many commentators cite the decision as confirmation that condensate qualifies as a petroleum product once it has been processed in a distillation tower, and is therefore not barred by the 39 year oil ban on crude exports.
Companies can freely sell gasoline, diesel and other petroleum products overseas.
Jim Hock of the Department of Commerce emphasized that: “There has been no change in policy on crude oil exports”.
“Consistent with the regulatory definition, crude oil that has been processed through a distillation tower which results in the crude becoming a petroleum product is no longer defined as crude oil. Petroleum product can be exported without a license, except in very limited circumstances”.
The bureau classification order issued to Pioneer Natural Resources and Enterprise Product Partners are therefore technically not needed, but provide a legal guarantee and assurance for the companies.
Some argue that the approvals have wider implications. Senator Lisa Murkowski said: “Commerce’s decision to allow companies to process condensate and export the resulting products is a reasonable first step that reflects the new reality of our energy landscape. The rules remain outdated, nonetheless and should be modernized. I continue to urge the administration to fully lift the ban on crude and condensate exports”.
Crude futures react
Business Insider reports that US crude futures are up more than 1% after the Wall Street Journal reported the approvals. Clearview Energy’s Kevin Book said markets may be overreacting, since it’s not clear that Commerce has actually made any alteration to the crude ban. Indeed, Hock’s comments highlight that certain hydrocarbons are to be defined as condensates and not crude oil.
Edited from various sources by Emma McAleavey.
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/25062014/condensate_export_approvals_790/