US Agency Queries Energy Firms Ahead Of Export Rulings
Amid a six-year U.S. drilling boom expected to soon make the country the world's top oil producer, energy companies are urging Congress and the Obama administration to repeal the ban imposed in response to the Arab oil embargo of the 1970s. Few expect that to happen soon, but many hope it may be relaxed in part.
The questionnaire first asks for details including source, location, and API gravity, a measure of the oil's thickness that is a key variable for setting its price. The second question is about what kind of processing or distillation is being done, according to the sources.
It also probes what comes out of the distillation tower and how the product will be used abroad. Finally, the survey asks whether the company has ever sold condensate or crude overseas.
Condensate Workshop
Many of those companies quickly returned the forms but have had no further response from the BIS since August, an industry source said. Only oil trader Trafigura has publicly confirmed it has a request pending.
"Everybody in the government is looking over their (BIS') shoulder. They are being reasonably cautious but the clock will tell me whether it is more about due diligence on their part or political pressures," to slow the process down, the source said.
Energy experts in the Obama administration are turning their attention to resolving lingering questions about condensates, which fall into a gray area under US regulations.
The Energy Information Administration, the independent statistics branch of the Department of Energy, on Sept. 26 held a closed-door "Condensate Workshop" with officials from multiple agencies and outside energy experts, one of its initial efforts to define exactly what the ultralight oil constitutes.
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