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U.S. sectors spar over crude oil exports

Upstream, downstream sectors argue over what's best for America.

By Daniel J. Graeber

WASHINGTON, May 29 (UPI) -- Domestic U.S. oil refineries may be reaching their capacity, highlighting the need to reach foreign shores with more exports, an energy coalition said.

The coalition, Producers for American Crude Oil Exports, points to federal data showing the domestic shale oil sector has a long life ahead and refineries are struggling to keep up with production.

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Those in the refining sector argue oil prices will increase, refiners will reduce gasoline production in response and domestic prices for gasoline will increase if a 1970s-era ban on crude oil exports is repealed. PACE counters that U.S. oil exports to Canada, which are permitted under federal law, have been on the rise at the same time that U.S. retail gasoline prices drop.

"This data further strengthens the case that the government should remove the export ban and allow U.S. crude oil to compete on a level playing field in international markets," PACE Executive Director George Baker said in a statement.

PACE noted the editorial boards from more than two dozen U.S. newspapers, from The Boston Globe to The Orange County (Calif.) Register, have got in line behind the call to end the ban on crude oil exports.

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Last month, a refinery group, Consumers & Refiners United for Domestic Energy, said some of the rise in crude oil stockpiles in the U.S. market is a reflection of a seasonal lag and not a reflection of an inability to handle increased output.

"Cries of the Chicken Littles about being 'awash in oil' were just fear-mongering," the group said in a statement. "American oil storage will not overflow."

The U.S. Energy Information Administration estimates total U.S. crude oil production will increase next year by 10 percent.

There are no restrictions on petroleum products like gasoline. In early November, Australian company BHP Billiton said it concluded that condensate, an ultra-light grade of crude oil taken from the Eagle Ford shale play in Texas, was legally eligible for exports.

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