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Murkowski wants clarity on condensates

The ultra-light shale oil cleared for exports, a strategy goal of the Alaska senator.

By Daniel J. Graeber

WASHINGTON, May 8 (UPI) -- Federal law lacks a clear definition of condensate, a light form of oil found in shale and cleared for exports, a bill tabled by U.S. Sen. Lisa Murkowski read.

Murkowski, R-Alaska, chairwoman of the Senate Energy Committee, introduced 17 separate energy measures. Among them, S. 1224 seeks to standardize the federal definition and policies regarding condensate.

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"Many federal agencies have conflicting definitions of what qualifies as 'condensate' and how it differs from 'crude oil,'" a background on the so-called Condensate Act reads. "In common parlance, one man's 'heavy condensate' is another man's 'light crude.'"

When last year the U.S. Bureau of Industry and Security, a division of the Commerce Department, authorized two U.S. companies, Pioneer Natural Resources and Enterprise Products Partners, to ship so-called condensate from the U.S. market, Murkowski welcomed the step but said U.S. export policies were nonetheless outdated.

"I continue to urge the administration to fully lift the ban on crude oil and condensate exports," she said at the time.

White House spokesman Josh Earnest said after the BIS decision there has been no change in export regulations.

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Legislation enacted in response to the 1970s oil embargo by Arab members of the Organization of Petroleum Exporting Countries bans the export of unprocessed crude oil, but products like gasoline and other fuel products aren't restricted.

Condensate refined or processed in a certain way is not characterized as crude oil and is therefore not subject to the export ban.

In February, Mexico's oil company Petroleos Mexicanos, known also as Pemex, issued a request to the U.S. government to import lighter blends of crude oil and condensate in exchange for the heavier Mexican grade. Pemex said it wanted the U.S. oil to blend with Mexican crude oil at its refineries.

Murkowski joined 20 other senators in arguing to the Commerce Department that Presidents Gerald Ford, Jimmy Carter and Ronald Reagan supported similar exports with Canada between 1976-85. Reagan in 1985 used the power of his office to allow oil exports to Canada and the 21 senators said Mexico deserves the same consideration.

Murkowski in her latest effort said U.S. laws have not kept pace with the production gains and potential leverage from shale.

"Our energy renaissance underscores the need to modernize America's energy policies," she said in a Thursday statement.

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