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OIL AND GAS
Reversing oil export ban will drive economic growth, API says
by Daniel J. Graeber
Washington (UPI) May 30, 2013


Friends and foes alike weigh in on Department of Energy policies
Washington (UPI) May 30, 2013 - A decision on U.S. liquefied natural gas exports is part of an administrative roadblock, congressional leaders say, though environmentalists declared a win.

The Department of Energy said Thursday it was proposing to do away with conditional approval for LNG exports and instead decide on whether exports are in the national interest after the Federal Energy Regulatory Commission issues an environmental review.

"The proposed procedural change will improve the quality of information on which DOE makes its public interest determinations," Christopher Smith, the department's assistant secretary for fossil energy, said in a statement.

U.S. lawmakers have said the glut of natural gas in the United States could provide a source of economic stimulus while giving the country a strategic advantage in the international community, particularly as European consumers are trying to break Russia's grip on the regional energy sector.

Reps. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee, and Rep. Cory Gardner, R-Colo., who drafted a measure to encourage U.S. gas exports, said the LNG proposal adds another layer of red tape to the approval process.

"This action will further slow down approvals and could discourage investment in export projects," they said in a joint statement.

Critics worry LNG exports will lead to more hydraulic fracturing, a controversial drilling practice seen as a threat to the environment.

Nathan Matthews, an attorney for the Sierra Club, said the proposal is a step in the right direction.

"It's never made sense to evaluate LNG exports without knowing the impact they would have on the environment and on our climate, so this announcement is a step in the right direction," he said in a statement.

Even states that don't produce much oil could benefit from the lifting of a 1970s-era export ban, a report prepared for the American Petroleum Institute says.

The U.S. government restricted crude oil exports in 1973 in response to an embargo from Arab members of the Organization of Petroleum Exporting Countries. An increase in U.S. oil production has prompted groups like API to call for a repeal of the 1973 measure.

Kyle Isakower, vice president of regulatory policy for API, which represents the interests of the energy industry, said exports would bring benefits to most of the 50 states.

"New jobs, higher investment, and greater energy security from exports could benefit workers and consumers from Illinois to New York, especially in areas where consumer spending and manufacturing drive growth," he said in a statement Thursday.

The report, prepared by ICF International and EnSys Energy, says some states without much oil production, like Florida, could see as much as $1 billion in economic gains by 2020. For Texas alone, the nation's No. 1 oil producer, lifting the export ban could create more than $5 billion in extra economic activity, the report said.

API's report followed a similar assessment from global consultant company IHS.

A report published in April by the Brookings Institution, a U.S. think tank, says global energy dynamics are changing in favor of the United States, though international market conditions are still a source of risk even if the United States is on pace to become the world's leading oil producer by 2020.

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The Spanish government on Thursday gave oil giant Repsol the green light to explore for oil and gas off the coast of the Canary Islands, a move that environmental groups described as "unjustifiable". The environment ministry said in a statement it "has issued a favourable environment impact statement". It said the exploration would take place around 60 kilometres (40 miles) from the shor ... read more


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