Rising US crude output may open door to exports-API head

Sat Jun 16, 2012 5:20am IST

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* U.S. currently restricts crude oil exports
    * US crude oil output for first quarter highest in 14 yrs
    * Gerard says sees change in attitude of Obama admin

    By Ayesha Rascoe and Timothy Gardner	
    WASHINGTON, June 15 (Reuters) - As U.S. oil production
climbs to record levels, the United States should eventually
consider easing its restrictions on crude exports, the head of a
powerful oil lobbying group said on Friday.	
    U.S. oil production hit the highest quarterly level in 14
years in the first three months of 2012, the government said
last week, as technologies including hydraulic fracturing, or
fracking allow drillers access to vast new reserves. 	
    America's changing energy fortunes call for more support of
domestic oil and gas production, and possibly an eventual shift
in U.S. energy export policy, American Petroleum Institute
President Jack Gerard told Reuters in an interview.	
    "It's a serious consideration as we continue to produce more
and more in this country," Gerard said at API's Washington D.C.
office.	
    While crude oil products such as gasoline and diesel can be
exported from the United States, the Mineral Leasing Act of 1920
and the Outer Continental Shelf Leasing Act requires a
presidential waiver for the sale of most unrefined crude oil
abroad, essentially banning exports.	
    Even with the rise in crude oil production, the United
States still imported nearly 56 percent of the crude it used in
April, according to data from API. 	
    Gerard also supports more export of liquefied natural gas,
an issue the Energy Department is currently weighing. He argued
that blocking exports in an attempt to artificially constrain
prices would lower production. 	
    "A lot of the early concern about exports is a knee-jerk
reaction," Gerard said. "If you leave that market alone, it will
find its equilibrium."	
    Some lawmakers have called on the White House to limit
growing energy exports out of concern that selling crude
products and gas to foreign sources could lead to a price spike
in the United States. 	
    Record high gasoline prices near $4 a gallon nationally have
been a big issue on the presidential campaign, as well, with
Republicans blaming the Obama administration for high fuel
prices.	
    	
    REACHING OUT	
    Representing major oil and gas companies such as Exxon Mobil
 and Chevron, Gerard has been a prominent player
in energy policy debates since joining API in November 2008.	
    Gerard has been a vocal critic of the Obama administration's
energy agenda, which in its early days, he said, favored
renewable energy and ignored fossil fuels.	
    With the Nov. 6 election looming, the White House has been
more amenable to oil industry concerns, giving drillers more
time to comply with recently finalized air rules from the
Environmental Protection Agency.	
    Gerard said API is in constant contact with all levels of
the administration, pointing out he had two or three calls with
officials on Friday. 	
    "There have been a number of meetings where you can clearly
see a different attitude and a different approach to energy,"
Gerard said. "We wish it would've come sooner." 	
    API has been taking its message about the importance of oil
and gas production on the road recently, holding meetings with
local groups in states like Colorado and Missouri as part of an
effort to make energy a part of national discussion ahead of the
November elections.
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