Tags: crude | oil | exports | US

As Shale Booms, US Crude Oil Exports Jump to 13-Year High

Monday, 29 Apr 2013 02:17 PM

 

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U.S. crude oil exports doubled in February to a 13-year high of 124,000 barrels per day, government data showed, as shipments of surplus shale crude to Canada gathered pace.

Exports jumped from an average of around 60,000 bpd last year, and have soared from less than 10,000 bpd in 2002, as Canada's refineries increase rail or tanker deliveries, monthly figures from the U.S. Energy Information Administration showed.

The shale oil boom has upended the North American energy market and created new cross-border trade flows, despite historical U.S. regulatory restrictions on the export of U.S. produced oil.

Commodity traders, oil multi-nationals and Canadian refineries have taken advantage of allowances within the North American Free Trade Agreement to increase exports as U.S. output has risen to a near 20-year high.

BP Plc secured U.S. government permission to ship U.S. crude oil to Canada last October, while Royal Dutch Shell and other companies have also sought export licenses.

The United States will generally allow exports of crude if these are matched by the import of an equal volume of gasoline and diesel.

Lighter shale oil is beneficial to Canadian refiners, who can blend it with heavier domestically produced crudes to create blends for easier refining, or use it to replace more expensive imports from West Africa and the Middle East.

Most of the exports have flowed from the Bakken oil fields in North Dakota to plants in Canada's east, which lack pipeline access to Alberta's oil sands and are dependent on foreign crude.

The exports have not generated significant domestic opposition, since Canada remains a huge net exporter of oil to the United States, sending around 2.7 million bpd south from both conventional and growing tar sands production.

But some experts say companies could face stiff political resistance if they press for permission to export U.S. crude to countries further afield, even if many energy analysts see such exports as beneficial to the U.S. economy.

The United States remains reliant on around 8 million barrels of crude oil imports every day, even as some predict the U.S. oil and gas boom could lead to North American energy independence by the end of this decade.

© 2014 Thomson/Reuters. All rights reserved.

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