Refiners and independent producers have engaged in a war of words over the Commerce Department’s recent decision to allow two companies to export distilled and stabilized condensate. The Independent Petroleum Association of America (IPAA) said a refiners’ lobbying group made a “thinly veiled effort to limit competition” in calling for the federal government to retract the export decisions. The Consumers and Refiners United for Domestic Energy (CRUDE), in turn, accused the IPAA of trying to shut out “any and all contrary views” on the matter.
The two groups disagree on whether or not the process determined by the government to be sufficient to refine condensate into a different product represents a true crude distillation process. In a Sept. 4 letter to the government (see PDF below), CRUDE asserted that the single purpose of stabilizing crudes and condensates is to remove very light hydrocarbons, making the oil less volatile and safer to transport. (CRUDE compared condensate that has passed through the stabilization process to flat Coke.) It concluded that the use of a stabilization unit for condensates fails to meet the definition of distillation as identified by U.S. oil export law. IPAA said that characterization of the stabilization process is “simply wrong,” arguing that stabilization processes vary and that some involve distillation towers.
Meanwhile, Pioneer Natural Resources — one of the two firms the government allowed to export condensate — has already sold cargoes to buyers in South Korea and Europe and is in talks to sell more. The federal government has given no indication it will lift the decades-old ban on crude oil exports or reverse the condensate export decisions.
