Crude Summit: ExxonMobil opposes crude export ban

OREANDA-NEWS. US regulations on crude oil exports and renewable fuel mandates have harmed US consumers and should be dropped, ExxonMobil vice president of public and government affairs Ken Cohen said today.

Regulations that ban most US crude exports were hatched during a bygone era of resource scarcity and are hurting US consumers and producers alike, Cohen said at the Argus Americas Crude Conference in Houston.

"North America is on the cusp of achieving unprecedented energy security that policy makers have been talking about for decades," Cohen said, pointing to a boom in US and Canadian unconventional crude supply as well as political advances in Mexico.

ExxonMobil and other major US producers are lobbying Congress and the White House to lift a crude export ban that was enacted after the Arab oil embargo of 1973-74.

With US light, sweet crude output still on the rise, US producers are being harmed by restrictions that bar them from exporting that supply to overseas refiners that are better suited to run it, he said. Many US energy companies are pursuing spending cuts and layoffs amid a 60pc drop in crude oil prices since June.

Some negative impacts "would be mitigated if producers could sell the products to the buyers willing to pay the most for them," he said.

ExxonMobil also criticized the Jones Act, which requires that goods shipped between US ports be carried on US-flagged vessels featuring US crews. The measure has made it "extremely difficult and costly" to transport crude from the Gulf coast to other coastal states, especially along the eastern seaboard, Cohen said. It costs three times as much to hire a vessel to send crude from the Texas coast to Philadelphia, Pennsylvania, on a Jones Act tanker than to send the crude to be refined in Canada, he said. ExxonMobil has found that it makes more economic sense to ship crude to Canada, refine it there and then re-import it to the east coast, he said.

Cohen reiterated ExxonMobil's objections to the US Renewable Fuel Standard (RFS), which requires fuels made from corn, soybeans and other renewable sources to be blended with the US gasoline supply.

"The RFS has degenerated into a policy quagmire that only benefits midwestern corn farmers and really nobody else," Cohen said. US regulations meant to incentivize the development of next-generation cellulosic ethanol have failed, he said.

"The federal government's policy of trying to wish cellulosic ethanol into existence has been an unmitigated failure," he said.