Rosy outlook for black gold
A tanker operated by the BW Group and flying the Singaporean flag left Texas for Asia early in August. What was so special about the sailing? The ship was exporting American oil worth approximately USD 40 million to South Korea. The oil had been specially processed and was designated as a condensate. This meant that a US oil export ban did not apply to.
The United States of America could assume a role as an oil exporter after all in the medium term. This is surprising, because a law entitled the Energy Policy and Conservation Act of 1975 stopped the export of black gold many years ago.
Thanks to the journey of the BW Zambesi from Texas to South Korea, however, the corporation sold unrefined American oil abroad without any restrictions at the beginning of August, the first time such a transaction took place in almost 40 years. The shipment was arranged by the Houston branch office of the BW shipping company. A new interpretation of the national statute made the move possible. After the oil embargo of the 1970’s, the United States Congress issued regulations which allowed the export of refined fuel, such as gasoline and diesel fuel. Exporting oil was possible only under extremely specific circumstances, however, and only with a special licence.
A matter of interpretation
Nevertheless, an exemption to these regulations is possible. It allows a certain type of oil, from which some ingredients have been removed, to qualify as a condensate. A special process removes some liquid elements from the oil, and so it meets this interpretation. The resulting crude oil is an exportable fuel. This process is quite different from the commonly-used refining procedure.
During the preparation, gases such as propane and butane are separated out. This process is a standard procedure at oil fields in the USA. Consequently, the path could be open for further oil exports from American production centres, and the journey of the BW Zambesi may represent the start of a new trend.
The outlook for this is good. Industry analysts have stated that just one of the many US oil fields that produce light oil brings up to 800,000 barrels to the earth’s surface every day.
Energy boom thanks to new methods
Not long ago, there were no prospects that the export of oil would become interesting for the US. That has fundamentally changed since new techniques have enabled oil to be extracted from shale formations. These new extraction methods, the so-called fracking process, could soon exploit previously unreachable deposits of shale oil and natural gas. In the USA, alternative oil and gas deposits have triggered something of an energy boom, with some areas even experiencing a degree of reindustrialisation. New factories have been erected in some states, including Texas and North Dakota.