Friday, October 12, 2012

Shell Asks Permission to Export U.S. Oil

In an interesting twist, Royal Dutch Shell applied for a permit from the U.S. Department of Commerce to export crude oil.  Exporting U.S. crude is technically illegal without special  permits.

There are few specifics right now about how much oil would be exported, where it would be sourced and when it would commence, but it points out the importance of logistics to the oil market.  I've always believed "energy independence" is a made-for-TV concept, and while we may ultimately be a net exporter of oil in coming decades we will continue to have to import the stuff because of logistical constraints, especially on the East Coast.  No matter how much oil we drill, prices will be impacted more by demand in China and India than in the U.S.

What I wonder is if it will become a political football like LNG exports.  I can't wait to see the reaction in Washington and in the media.

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