The U.S. is preparing for a role it hasn’t held in quite some time: exporter of crude oil. Although America has long been among the world’s largest producers of crude oil, the high level of domestic consumption has meant that most of this crude remained within the country for processing and use. But now the FT reports that a number of energy companies have applied to the government for applications to export American crude abroad, mostly to refineries in Canada. New extraction techniques like fracking and the production of new types of oil over the past few years have overwhelmed the capacity of many local refineries, and energy companies are now looking across the border to process their new bounty. And this is all happening surprisingly quickly:
US federal rules and the country’s dependency on imports have kept all but a trickle of crude from leaving the US. But a surge in supplies from states such as Texas and North Dakota have prompted companies to seek out refinery customers in Canada. . .
Until now, only minimal amounts of US crude have been exported overland from the north of the country to Canada. Traders, though, now want to export crude by tanker from the Gulf of Mexico to the Atlantic coast of Canada, where Imperial Oil, Irving Oil and a unit of Korea National Oil Corp each own a refinery. In the Eagle Ford “shale” of Texas, production has jumped to 280,000 b/d from almost nothing four years ago and its low-sulphur crude is ill-suited for many refineries nearby.
As the article notes, this is less about increasing energy exports for America and more about changes in the production chain; much of the oil sent to Canada will be processed there and then sent back to America. But this is yet another indication of just how quickly America’s energy revolution is transforming the energy discussion in the U.S. and the rest of the world.