API Leader Says Oil Industry United in Seeking End to Ban on Crude Exports

Jack Gerard, API
National Journal
Amy Harder
Add to Briefcase
Amy Harder
Jan. 7, 2014, 4:35 p.m.

Wash­ing­ton should lift its dec­ades-old ban on crude-oil ex­ports re­gard­less of some oil com­pan­ies’ op­pos­i­tion to it be­cause it’s in the coun­try’s na­tion­al in­terests, Amer­ic­an Pet­ro­leum In­sti­tute CEO and Pres­id­ent Jack Ger­ard said Tues­day.

Ger­ard ad­dressed a re­port by Na­tion­al Journ­al pub­lished Tues­day that a rift was brew­ing with­in the in­dustry — between do­mest­ic pro­du­cers and re­finers — over wheth­er the ban should be lif­ted.

Be­cause the ban ap­plies only to crude oil, re­finers are bet­ter­ing their bot­tom lines by ex­port­ing re­fined oil products at re­cord rates. Some re­finers op­pose end­ing the ban. That’s not the case with API’s more than 500 mem­bers, Ger­ard said Tues­day.

“We be­lieve the na­tion­al in­terest will over­whelm self-in­terest,” Ger­ard said in an in­ter­view after his group’s an­nu­al lunch­eon. “There will be some who will ar­tic­u­late self-in­terest. We don’t be­lieve that’s in the best in­terest to the na­tion.”

Ger­ard was asked if there was un­an­im­ity among all API mem­bers, in­clud­ing those that are primar­ily re­finers like Mara­thon Pet­ro­leum and Phil­lips 66 as well as in­dustry gi­ants such as Ex­xon Mo­bil and Chev­ron that both pro­duce and re­fine oil. “I know our mem­ber com­pan­ies are on the same page,” he said.

In emailed re­sponses to Na­tion­al Journ­al last week, spokes­men for Mara­thon and Phil­lips said they don’t op­pose lift­ing the ban. An­oth­er re­finer, Valero, said it does not sup­port end­ing the ban. Valero is not an API mem­ber but is part of the Amer­ic­an Fuel and Pet­ro­chem­ic­al Man­u­fac­tur­ers, a small trade group rep­res­ent­ing re­finery com­pan­ies whose of­fi­cial po­s­i­tion is also sup­port­ive of lift­ing the ban.

Some re­finers privately op­pose lift­ing the ban, and oth­ers are still fig­ur­ing out what their of­fi­cial po­s­i­tion should be.

Ger­ard de­livered his an­nu­al State of the En­ergy speech at his group’s lunch­eon Tues­day, and to the sur­prise of some ana­lysts and at­tendees, he fell short of call­ing ex­pli­citly for lift­ing the oil-ex­port ban, which dates back to the 1973 OPEC oil em­bargo, to be ended. So, was that in­ten­tion­al?

“No, not at all,” Ger­ard said. “I prob­ably fell short in a lot of areas.”

He had also in­dic­ated a couple of months earli­er that this wasn’t a top-tier is­sue for his group, a sign of how quickly things can change in a city where polit­ics usu­ally slow everything down.

“We’re not fo­cused on that primar­ily in the short-term,” Ger­ard said in an in­ter­view with Na­tion­al Journ­al in Novem­ber.

In less than two months, state­ments by ma­jor oil com­pan­ies and a sig­nal of will­ing­ness to re­vis­it the ban by En­ergy Sec­ret­ary Ern­est Mon­iz has thrust the is­sue to the front burn­er. A ma­jor speech by Sen­ate En­ergy and Nat­ur­al Re­sources Com­mit­tee rank­ing mem­ber Lisa Murkowski, R-Alaska, call­ing for an end to the crude-ex­port ban also gave new en­ergy to the is­sue.

This has all changed Ger­ard’s out­look.

“I think the events have over­taken the ori­gin­al thought that [the ex­port ban is­sue] would gradu­ally roll out over time,” he said.

While the de­bate has come quickly, ac­tion in Con­gress is likely to be much slower, if it comes at all.

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