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James Stafford

James Stafford

James Stafford is the Editor of Oilprice.com

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Oil Exports, Not Exactly a Coup

Oil industry news is awash this week with reports that the Obama administration has effectively abolished a four-decade-long ban on US crude oil exports, but a closer look at the deal that’s got everyone so excited makes for a less sensational headline.

According to the Wall Street Journal, in two separate rulings, the US Commerce Department has granted permission to Pioneer Natural Resources Co. and Enterprise Products Partners LP to export ultralight condensate oil.

The devil is in the details, as he so often is, and the trick is in the type of “crude”.  What the Commerce Department is allowing these two companies to do is export unrefined crude oil from the Eagle Ford shale formation in Texas.

This unrefined crude oil is ultralight crude, or oil condensate, which has undergone a stabilization process for safe transportation and storage. Because of the stabilization process, this ultralight crude can be considered a refined petroleum product, for which there are currently no limits on US exports.

So they haven’t lifted the ban, per se, they’ve just found a loophole.

It may not be the oil export coup the industry was gaming for, but it’s still good news. The shale boom has led to a surge in the production of ultralight oil but prices for condensate and domestic crude have been kept far below Brent crude because of the export ban.

Related Article: What New Oil Export Laws Really Mean

In the natural gas side of this equation, the US House on Wednesday passed a bill aimed at speeding up applications for exported liquefied natural gas (LNG).

The bill, introduced by Rep. Cory Gardner (R-Colorado), would essentially reduce the timeframe for approval of LNG exports to non-free-trade agreements countries from the US Department of Energy to 30 days—down from 90 days.

The Obama administration has been coy about the process, noting that the procedure for approving applications that is currently in place is secondary to the fact that LNG export facilities in the US wouldn’t be ready to start exporting until 2018 regardless.

Still, it’s good news for Ukraine, which is hoping to be able to get its hands on US LNG at some point in its tenuous energy future—a topic that took center stage during last week’s energy forum in Kiev.

Oilprice.com was on the ground for the Adam Smith Ukraine Energy Forum in Kiev last week. Be sure not to miss our upcoming study of LNG for Ukraine next week, and special interviews with key figures on the Kiev energy scene.

Announcement: We have just launched a free service that could be of huge interest to you. Our researchers have taken the newsfeeds of every oil & gas company traded in the major exchanges in the U.S., Canada, UK & Australia and created a very easy to use webpage that shows all of these results as soon as they are released. It’s incredibly easy to use and allows you to select the exact exchange or country you are interested in: https://oilprice.com/oilcompanynews (Check it out)

By. James Stafford of Oilprice.com


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  • Synapsid on June 28 2014 said:
    The US has been sending condensate from the Eagle Ford shale to refineries in eastern Canada for more than a year.

    The permits referred to in the article are permits, not policy changes. The government has been granting such permits for years, most to Canada but others to Mexico, Chile, Brazil, and recently, I believe, to Europe (Italy?)
  • mariamante on June 28 2014 said:
    Easing energy policy would normally be great, except when Soros and Obama are involved.

    In June 2014, it was reported "The Commerce Department’s decision to permit Pioneer Natural Resources (NYSE:PXD) and Enterprise Products Partners L.P. (NYSE:EPD) to export very light crude oil (condensate) to foreign buyers with minimal refining has produced an immediate set of winners, Eagle Ford area oil producers."

    So the Fed singled out these 2'corporations to benefit from Obama's new energy policies, along with the select Eagle Ford area oil producers.

    http://www.marketsemerging.com/oil-producers-big-rally-pioneer-natural-resources-pxd-nextera-energy-inc-nee-penn-virginia-corporation-pva-enterprise-products-partners-l-p-epd-petroquest-energy-inc-pq/1710251/

    Besides the fact that the Department of Commerce doesn't have the authority to legislate energy policy as article such as these would have the public believe, 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

    Once again there is a problem with this private Obama back door deal with 2 selectively chosen public corporations, PIONEER Natural Resources and ENTERPRISE Products Partners L.P, and Soros.

    In March of 2014, 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.

    In June 24, 2014, it was quietly reported that "The Obama Administration" cleared the way for oil exports (silly constitution) only for companies, Pioneer and Enterprise, to export unrefined oil.
    http://online.wsj.com/articles/u-s-ruling-would-allow-first-shipments-of-unrefined-oil-overseas-1403644494

    Guess which stocks George Soros, convicted for insider trading, has been frantically buying up, just prior to the Obama Administration's June mandate?

    In December of 2013 it was reported, ".....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

    On June 11, 2014, it was reported that Soros made a remarkably large investment in Penn Virginia who has the best position in that Eagle Ford area of gas production. "However, when Soros -- with a net worth of $25 billion -- decides to become a company's largest shareholder and assume an activist role, he should not be taken lightly. Soros has taken on just such a role with Penn Virginia (NYSE: PVA ) ."

    "Over the years, Penn Virginia has shifted from being a pure natural gas company to one focused on oil and higher-value natural gas liquids. The company remains one of the best-positioned companies in the Eagle Ford shale formation in South Texas."

    "Soros became Penn Virginia's largest shareholder in the first quarter of this year after disclosing a position of just over 9% in the company. The interesting part is what Soros said in his SEC filing ."

    "The most attractive asset in Penn Virginia's portfolio is its Eagle Ford assets. "
    http://www.nasdaq.com/article/soros-has-big-plans-for-this-energy-stock-cm360807#ixzz35xiwVcnt

    On June 25, Penn Virginia Corporation (NYSE:PVA) surged 12.39% after the Soros Fund called on the company to sell itself. In a regulatory filing, the hedge fund said that Penn Virginia should sell itself with an aim to boost investors’ wealth. In a previous regulatory filing dated May 18, the fund called on the company to explore strategic alternatives. Yesterday’s filing represents a more aggressive approach by the Soros Fund.

    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 p

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