A chief executive officer of a U.S. energy giant on Tuesday called for the government to remove its current ban on crude oil exports so as to lower consumer prices and stimulate further shale oil production, the Houston Chronicle reported.
Speaking at the 2013 Deloitte Oil and Gas Conference in Houston, Ryan Lance, ConocoPhillips CEO, said the United States has dramatically increased its production from tight oil formations in the last five years, but refining and pipeline limitations have created bottlenecks of crude oil.
Most of the country's domestic refineries are designed to process the heavy, sour crude coming from Canada and South America, while the shale regions are producing a lighter, sweet crude for which the U.S. refineries are not well-equipped, according to Lance.
"The refineries are tooled up for sour crudes, with only so much capacity for light, sweet crudes," Lance said.
"Either you are going to shut down production, or you get wide differentials to try to incentivize capital investment in more facilities. The world needs the crude and there are places where we could export that crude into existing refineries," he said.
Refining the lighter crude overseas would be more economic for domestic consumers, because it would be cheaper to use existing refineries overseas than to make the capital investments required to refine production domestically, Lance said.
The U.S. Department of Energy has approved four liquefied natural gas export projects along the Gulf of Mexico in light of the nation's shale gas boom, and 16 more are waiting in the wings for approval. As production of tight oil continues to increase, some lawmakers are raising questions about easing the ban on crude exports.
ConocoPhillips is an American multinational energy corporation with its headquarters based in Houston. It is the world's largest independent pure-play exploration and production company and also one of the Fortune 500 companies.
