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Here Are the Biggest Winners as the 40-Year Ban on U.S. Crude Oil Exports Ends
Money Matters ^ | 6/27/14 | dr. Kent Moors

Posted on 06/28/2014 9:31:26 AM PDT by mgist

After over four decades, it looks like America is getting back into the oil export business again.

For the first time since the 1970s, Washington has opened the door to sending more U.S. crude oil abroad.

Of course, the United States has been exporting oil products for some time now.

In fact, America is now the largest exporter of products like gasoline, low sulfur heating oil, and diesel fuel in the world.

But until now, companies were hamstrung when it came to the raw material itself.

Of course, there have been a few exceptions. Very heavy California crude, which has to be sold at a deep discount and for which there is not a ready domestic market, has received some permissions to export. In addition, a few tolling programs - in which the raw material is exported out and finished products are imported back in - have been allowed.

But for the lion's share of what is pumped out of the ground at American fields, the domestic market has long been the only option.

This change in policy promises to open up new opportunities for investors...

U.S. Crude Oil Exports: A Major Reversal in Policy

Late Tuesday evening, the U.S. Department of Commerce announced that it would allow exports of ultra-light oil (essentially condensate after very minimal processing) by two companies - Pioneer Natural Resources Co. (NYSE: PXD) and Enterprise Products Partners LP (NYSE: EPD).

Both requested the exports from production at tight/shale oil plays in the Eagle Ford basin of South Texas.

As volumes go, this is a very small step. But it is a major change in policy (despite what the Commerce Department was trying to tell everybody yesterday). And that means other companies are certain to follow suit.

Earlier this year, Continental Resources Inc. (NYSE: CLR) Chief Executive Officer Harold Hamm said he expected an opening for across-the-board crude oil exports. And CLR just happens to be the largest producer in the Bakken.

After yesterday's announcement, we've now learned export permissions will certainly be granted on an ad hoc basis. These changes are now set to begin in August, marking the end to a restriction that was initiated for national security reasons during the Arab Oil Embargo of 1973.

Of course, some U.S. companies have already found a way to get around this restriction. It involves boiling the oil to take out some of the more easily separated gases in order to "stabilize" the crude.

As such, the oil has been initially "processed" without actually being refined. But the result is enough to qualify as an "oil product," which puts it in a category that is regularly exported.

Here's what this important development means for energy investors...


TOPICS: Culture/Society; Government
KEYWORDS: energy; oil; opec

1 posted on 06/28/2014 9:31:26 AM PDT by mgist
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To: mgist

Instead of crude oil, think lighter fluid, processed to remove the most volatile elements and gas which could cause troubles in transport.


2 posted on 06/28/2014 9:35:13 AM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing.)
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To: mgist

This is driving a wooden stake into the hearts of the Opecker Princes and their green eco energy terrorists and the rat politicians dependent on money from the Opecker Princes.


3 posted on 06/28/2014 9:35:59 AM PDT by Grampa Dave ( Herr Obozo, the Sunni Won-Doer, will not divert $'s from his war on Americans to help our Veterans!)
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To: Grampa Dave
The flip side of it is that fuel prices are likely to escalate dramatically here in the U.S. over time as our government functions in a condition that can best be described as insolvent. As the U.S. dollar declines in value against other currencies, we'll end up in a position where it becomes increasingly difficult for us to afford to buy our own resources here in the U.S.

And that, folks, is basically the definition of a Third World country.

4 posted on 06/28/2014 9:41:39 AM PDT by Alberta's Child ("What in the wide, wide world of sports is goin' on here?")
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To: mgist
I have no problem with easing any energy restrictions. There is a problem with this private Government deal with 2 selectively chosen public corporations.

There is also a problem with Soros' involvement, and everything that implies. Obama has a disturbing history of benefitting Soros' energy investments, with no benefit, and sometimes even to the detriment, of American citizens. http://www.americanthinker.com/2011/03/soros_wins_under_obamas_energy.html

There is also the fact that Congress and FERC should be the ones considering Energy policy regulation changes with an open and honest public debate. These back door deals, lobbied with media talking points disguised as news, are getting tiresome.

Early this year Soros, who at some point was knighted the permission to dictate US policy, requests the release "oil reserves" to "punish Putin", he says. (Never let a civil war go to waste) http://www.bloomberg.com/news/2014-03-26/soros-endorsed-sale-of-u-s-oil-reserves-seen-as-russian-penalty.html

These articles, orchestrated early this year, are Obama's usual dog and pony show MO. The articles are intended to make Insider Trading, in this case, seem organic and well intended. Think Benghazi, when they pulled "the video" out of their pockets, with CYA stories.

Obama obediently made a "private" ruling (silly constitution) that allowed 2 otherwise unknown companies, Pioneer and Enterprise, to export unrefined oil. $$ The Dept. of Commerce doesn't have the authority to regulate Energy policy, as some media PR stories would have the peasants believe. http://online.wsj.com/articles/u-s-ruling-would-allow-first-shipments-of-unrefined-oil-overseas-1403644494

Guess what company stocks George Soros, convicted felon for insider trading, has been buying up since 12/2013?

( "the firm's prospects are so exciting that billionaire hedge fund manager George Soros owns a $200 million stake in the firm. Other smart money operators like Stanley Druckenmiller and John Paulson are pouring money into the stock as well. I'm talking, of course, about Pioneer Natural Resources (NYSE: PXD )" George Soros owns 964,000 shares of this stock") http://www.fool.com/investing/general/2013/12/26/billionaire-george-soros-is-buying-this-texan-oil.aspx

It seems Soros' investment in Global Warming was no longer financially expedient. (Hopefully we'll have less tiresome headlines with "scientific reports of impending gloom now).

Why not ease the restrictions of energy production on Federal lands, which has decreased by 40% since 2000, while the private sector has grown? "The government leases less than 2.2 percent of federal offshore areas and less than 6 percent of federal onshore lands for oil and natural gas production." http://instituteforenergyresearch.org/analysis/president-obamas-record-on-oil-and-gas-production/

A man convicted of insider trading is shamelessly dictating US policy. That is what he does when he isn't scheming global regime changes, or drug legalization policy, for the benefit of his pockets and his shady associates. Soros' involvement, No bueno.

5 posted on 06/28/2014 9:44:04 AM PDT by mgist (.)
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To: Alberta's Child

Not a zero-sum game. Production will go up.


6 posted on 06/28/2014 9:50:52 AM PDT by 1rudeboy
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To: Grampa Dave
...and the rat politicians dependent on money from the Opecker Princes.

I would remind you there is no shortage of 'pubbie politicians dependent on money from the Opecker Princes.

The Saudis are bi-partisan corrupters...

7 posted on 06/28/2014 9:51:29 AM PDT by okie01 (The Mainstream Media: Ignorance on parade.)
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To: 1rudeboy

And foreign consumption will go up, too.


8 posted on 06/28/2014 9:53:24 AM PDT by Alberta's Child ("What in the wide, wide world of sports is goin' on here?")
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To: Alberta's Child

“And foreign consumption will go up, too.”

As well dollars coming back into the U.S.

I guess you are talking about “Third world countries” like Saudi Arabia and other oil exporting countries like Canada.


9 posted on 06/28/2014 10:10:35 AM PDT by marktwain (The old media must die for the Republic to live. Long live the new media!)
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To: Alberta's Child

Are you suggesting that mineral rights owners and private industry subsidize our energy usage out of their own pockets?


10 posted on 06/28/2014 10:33:34 AM PDT by Balding_Eagle (Want to keep your doctor? Remove your Democrat Senator.)
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To: marktwain

Well if you’re correct then we’re on the way to paying Canadian prices for gasoline, so “Hello, Five bucks (or more) per gallon!”


11 posted on 06/28/2014 10:42:12 AM PDT by Go_Raiders (Freedom doesn't give you the right to take from others, no matter how innocent your program sounds.)
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To: mgist
"export permissions will certainly be granted on an ad hoc basis"
Meaning: Permission will be made available at the whim of the dictating class upon payment of graft and in-kind gifts.
12 posted on 06/28/2014 10:43:17 AM PDT by The Free Engineer (a)
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; cardinal4; ColdOne; ...

This is a classic Obama move — restrict new sources and ways to transport them, restrict exploration, and then further reduce supply by allowing export. Thanks mgist.


13 posted on 06/28/2014 11:14:34 AM PDT by SunkenCiv (https://secure.freerepublic.com/donate/)
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To: SunkenCiv

It seems Obama can’t shoot straight -ever.

I think energy lobbyists should call,Obama out on these presidential quid pro quo’s, and start making demands.


14 posted on 06/28/2014 11:38:43 AM PDT by mgist (.)
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To: Go_Raiders

About $3.5 of the $5 per gallon in Canada are for taxes.


15 posted on 06/28/2014 12:27:02 PM PDT by marktwain (The old media must die for the Republic to live. Long live the new media!)
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To: Go_Raiders

Taxes are the main reason for the higher gas prices in Canada.


16 posted on 06/28/2014 12:27:03 PM PDT by USFRIENDINVICTORIA
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To: marktwain

I have that reversed. About $1.5 of the $5 is for taxes.


17 posted on 06/28/2014 12:33:45 PM PDT by marktwain (The old media must die for the Republic to live. Long live the new media!)
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To: 1rudeboy; Alberta's Child

AC never has met a free market initiative she liked.


18 posted on 06/28/2014 12:54:19 PM PDT by wideawake
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To: wideawake

It’s crazy. “My grocery store cannot sell Hostess Ho-Ho’s wherever it wants, because it means fewer Ho-Ho’s for me, and I will have to pay more for them.”


19 posted on 06/28/2014 1:05:04 PM PDT by 1rudeboy
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To: mgist
Imagine there’s no export ban – no need to split the condensate
Oil & Gas Financial Journal
May 27, 2014
Sandy Fielden, RBN Energy
Our analysis shows that 8 companies have announced plans to build condensate splitters in addition to the already operating 75 Mb/d Total/BASF unit at Port Arthur, TX. Some of these plans are further along than others – notably the Kinder Morgan 100 Mb/d splitter being built in the Houston Ship Channel – delayed earlier this year – but still due online in November 2014 with the first 50 Mb/d of production fully contracted to BP. Similarly on their way to completion are splitters (topping units) announced by Marathon at their OH and KY refineries. Magellan, Castleton and Martin Midstream have announced plans for three splitters at Corpus Christi on the Gulf Coast south of the Eagle Ford.


Eagle Ford condensate producers win, refiners lose in oil export decision
http://freerepublic.com/focus/f-news/3172369/posts

Refiners Crash as Exports From Shale Boom Threaten Costs
http://www.bloomberg.com/news/2014-06-25/refiners-crash-as-exports-from-shale-boom-threaten-costs.html
[Title and link only, content prohibited from posting on FR.]

Report: Obama can use executive powers to lift oil export ban
http://dailycaller.com/2014/03/03/report-obama-can-use-executive-powers-to-lift-oil-export-ban/

Drillers hopeful that Obama will ease longstanding ban on oil exports
http://www.rawstory.com/rs/2014/05/23/drillers-hopeful-that-obama-will-ease-longstanding-ban-on-oil-exports/

Obama administration rulings loosen ban on U.S. oil exports, Wall Street Journal reports
http://www.nola.com/business/index.ssf/2014/06/obama_administration_rulings_l.html

How Obama gave hope to supporters of oil exports
http://washingtonexaminer.com/how-obama-gave-hope-to-supporters-of-oil-exports/article/2550210

Obama Administration Takes Next Step Toward Lifting Oil Export Ban
http://www.wusa9.com/video/3641846284001/1/Obama-Administration-Takes-Next-Step-Toward-Lifting-Oil-Export-Ban
(video)

Obama loosens 4-decade ban on crude oil exports
http://americablog.com/2014/06/obama-loosens-four-decade-ban-crude-oil-exports.html

Relaxation of Export Ban Puts Pressure on Refiners
http://finance.yahoo.com/news/relaxation-export-ban-puts-pressure-132010350.html

White House reviews crude oil export ban
http://www.cnbc.com/id/101657233

European leaders ask Obama to allow increased exports of US shale gas
http://www.theguardian.com/world/2014/mar/26/europe-asks-obama-increased-exports-shale-gas


20 posted on 06/28/2014 4:45:38 PM PDT by familyop (We Baby Boomers are croaking in an avalanche of corruption smelled around the planet.)
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To: SunkenCiv; Go_Raiders; marktwain
SunkenCiv is right. It was Obama's move with some of his favorite anti-competition constituents. Links and information in comment #20 should clear it up quickly enough.


21 posted on 06/28/2014 4:52:02 PM PDT by familyop (We Baby Boomers are croaking in an avalanche of corruption smelled around the planet.)
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To: Balding_Eagle
Are you suggesting that mineral rights owners and private industry subsidize our energy usage out of their own pockets?

Not at all.

22 posted on 06/29/2014 7:18:23 AM PDT by Alberta's Child ("What in the wide, wide world of sports is goin' on here?")
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To: marktwain

And Nigeria, Venezuela, Iraq, etc.


23 posted on 06/29/2014 7:19:16 AM PDT by Alberta's Child ("What in the wide, wide world of sports is goin' on here?")
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To: wideawake
???

And 'scuse me while I go visit the doctor to get a post-op update on my sex change operation. LOL.

24 posted on 06/29/2014 7:20:09 AM PDT by Alberta's Child ("What in the wide, wide world of sports is goin' on here?")
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To: familyop
I have no problem with lifting export bans.

The problem is the back door deals for the exclusive benefit of companies that Soros is a majority shareholder.

The fact that rewarding political Fat Cats, is the only motivation, is the reason domestic energy will go no where under Obama. In case you haven't noticed he is also beholden to OPEC nations.

This process was not transparent, and we have to put an end to Obama abusing the constitution, the US Military, and American citizens, to support his Radical Islamists. It has been clearly documented.

Samuel Hersch, famed author, did a good job of connecting the dots of Obama's illegal use of the US military to go to war in Lybia, Syria, and Pakistan.

The Red Line and the Rat Line.

The foreign press also recognizes Obama's illegal actions. "Obama's Illegal Use of US Military A True Concern"

"The real Obama scandal: fighting illegal wars in Libya and Pakistan The AP, IRS and Benghazi controversies are political sideshows. Obama's use of illegal force abroad is true concern" The Guardian 2013.

I hope the oil companies call Obama out on his insider trading deal with Soros, and force him to play fair and treat all companies equally, or sue him and Soros.

I can't believe that a president in this country can do what he does.

25 posted on 06/29/2014 2:47:27 PM PDT by mgist (.)
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To: mgist
This is THE ONLY winner of any of Obama's energy policies.

Soros’s Oil Spill Payoff

June 22, 2010 by Tait Trussell

Within 48 hours after President Obama issued the six-month moratorium on deep-water drilling, the George Soros-backed Brazilian oil company, Petrobras, contacted a large New Orleans company, Laborde Marine, which services the deep-water drilling market. The company was seeking to lease all its vessels.

“If the moratorium on deep-water drilling is not lifted, 33 semi-submersible rigs and/or drill ships affected will simply go to other countries where they will be well received, such as Brazil,” Cliffe F. Laborde and J. Peter Laborde, Jr. wrote in a June 4 letter to their Louisiana Senators.

Could this be merely a happy coincidence for George Soros, the major financial backer of Obama’s presidential campaign who also has $811 million invested in the Brazilian oil company, Petrobras? Wasn’t it enough of a payback to Soros when the Obama Administration loaned up to $10 billion to Petrobras? Soros, with his far left-wing organization, MoveOn, is called the Godfather of world socialism. But most relevant currently is that he has been an enthusiastic proponent of global warming and environmental liberalism.

He has urged adoption of a global carbon tax. Could it be more than coincidence that his position is strikingly similar to what Obama called for in his June 14 Oval Office speech on the Gulf oil spill and future energy actions?

“Seizing on the widening calamity in the Gulf of Mexico, to push for legislation he had advocated [a carbon tax] since his campaign” a New York Times article noted. “Mr. Obama said he was willing to look for approaches from Republicans as well as Democrats….” Obama delivered the speech the evening before he was to meet with British Petroleum top executives to demand that they agree to the creation of a multi-billion dollar escrow account to pay claims stemming from the disaster when the company’s rig blew up and spewed oil into the Gulf.

The moratorium could mean the loss of at least 20,000 jobs, Louisiana Governor Bobby Jindal wrote in a letter to Obama. “The last thing we need is to enact public policies that will certainly destroy thousands of existing jobs while preventing the creation of thousands more,” Jindal’s statement said. Each drilling platform idled by the ban puts 1,400 jobs at risk, according to the National Ocean Industries Association (NOIA), a group of drillers and companies that support oil production. Lost wages could reach $10 million a month for each rig, according to Jangal.

NOIA has said: “The offshore industry is responsible for nearly 200,000 jobs in the Gulf of Mexico alone, and provides 30 percent of our nation’s domestic oil production….[W]e must be careful not to make things worse.”

26 posted on 06/30/2014 3:14:06 AM PDT by mgist (.)
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