Louisiana Oil Industry Recovers From Katrina Devastation

As we reported last November, US crude oil export laws can be absurd, with policies regulating condensate exports particularly convoluted. Thus it appears two forward-thinking companies took advantage of this “squishy” legal situation to gain condensate export approval.

Deemed “private classification orders” by the Commerce Department’s Bureau of Industry and Security, the decision allows Pioneer Natural Resources and Enterprise Product Partners to export minimally-processed condensate, a hydrocarbon some consider an ultra-light crude. By processing the condensate through a stabilizer, the resulting liquid is classified as a refined product that can be exported under existing laws.

Condensate is a gas when it travels up through an oil or gas producing well, but condenses into a liquid at the surface. Condensate can also be produced through the crude oil refining process or from natural gas processing.

“Lease condensate is classified by the molecule laws as crude oil”, whereas “natural gasoline, even though it’s exactly the same stuff chemically, you can export it just fine,” explained Rusty Braziel President of RBN Energy, at the Center for Strategic and International Studies last November.

So it appears the Commerce Department ruling could motivate other companies to file similar requests and the general consensus among analysts is this ruling represents a symbolic first step toward relaxing the 39-year crude oil export ban, which is what many US producers are pushing for.

“Commerce’s decision to allow companies to process condensate and export the resulting products is a reasonable first step that reflects the new reality of our energy landscape,” Murkowski said. “The rules remain outdated, nonetheless, and should be modernized. I continue to urge the administration to fully lift the ban on crude oil and condensate exports.” – Alaska Senator Lisa Murkowski as reported by Fuel Fix