HOUSTON -- America has a golden opportunity with its surging oil production that should not be squandered, Sen. Lisa Murkowski (R-Alaska) said in her keynote address at the 33rd annual IHS CERAWeek in Houston.
The U.S. needs to reorient its energy policies for a new century, including allowing export of condensate and crude oil, she said. She offered a roadmap to allow this, and said if the president doesn’t act, she is prepared to introduce legislation.
The senator has already taken several actions. Last year she released an energy white paper, Energy 20/20, on the future of American energy policy. It covered a wide array of policies and topics. She also released three related white papers on LNG, broader energy exports and electric reliability. She intends to release another one soon on the link between energy and water.
Now, she is doing more. In a year of midterm elections and congressional inaction, Murkowski said she thinks President Obama must act. “Legislation may be required if the president is unwilling to lead on this issue – and I am fully prepared to go down that route if necessary – but let there be no doubt that there is a clear path forward here.”
In January she released a white paper calling for exports. “I laid out the case for why we need to renovate the architecture of the U.S. energy trade. We have substantial opportunities for exports of coal, petroleum products, natural gas, natural gas liquids, renewable technology, nuclear technology and even -- as you all well know -- crude oil.
“I have called for lifting the de facto prohibition on crude oil exports as a pre-emptive measure. We need to lift it to prevent future losses of production and jobs when our trade restrictions inevitably collide with the surge in light tight oil and condensate production we are seeing in places like the Eagle Ford. The conversation I hoped to help frame with my white paper, A Signal to the World, is well underway.”
This is the year that think tanks and research institutions examine the possibility of crude exports and the potential ramifications, Murkowski said. “Working groups are assembling, writing papers, crunching numbers. And that’s a good thing.”
“The economics are clear: exports stimulate production, which increases global oil supply, which decreases global oil prices, which decreases global petroleum product prices. In other words, all things being equal, lifting the ban will help consumers.”
At CERAWeek, following her call to action in January, she offered a new roadmap for modernizing crude oil export regulations. First, she said Congress and the president have the power under existing law to clarify and modify regulations to allow condensate to be exported.
“These extremely light hydrocarbons are subject to some of the most convoluted regulations I’ve ever come across. The same chemical composition is treated differently based on whether it comes out of the ground or out of a processing plant. It boggles the mind. There needs to be an immediate rationalization of policies that treat two similar if not identical chemical compounds in two very different if not completely contradictory ways.
Second, she is asking the Energy Information Administration (EIA) to analyze the potential impacts of exports of crude oil. However, she said, “A mammoth multivolume, static, stand-alone study isn’t the way to go for something as fast moving as the evolving crude oil market. We need information, not excuses for inaction.”
Third, she will ask for a national interest determination by the president. “This would be more efficient than free-trade agreements, more likely than congressional action, and a perfect fit for a positive ‘year of action.’ ”
Finally, she said, “I am releasing a report through the Senate Energy Committee website that reprints a series of hard-to-find presidential findings and Commerce Department rulemakings -- specifically on the subject of authorizing crude exports -- stretching all the way back to 1981. Past is precedent, and I certainly hope it is prologue.”
Murkowski reminded the audience that exports mean more revenue and jobs, and they add supply to a tight market, providing “greater stability that benefits consuming and producing nations alike.”
“In the end, the conclusion I came to a year ago remains the same today. We cannot squander the golden opportunity that technology, geology, providence, and true American grit have bestowed upon us. So as this week continues, I encourage you to consider ways to keep energy affordable and to increase access to federal lands and markets around the world. If we are successful, we will help not only this country but also many others around the world.”