U.S. Oil Export Battle Heats Up as Drillers Group to Fight Ban

More than a dozen U.S. oil producers have joined to lobby the federal government to reverse the 40-year-old ban on U.S. crude exports, a move that supporters hope would create jobs and boost national security, a spokesman for one of the companies and a lobbyist for another one said on Friday.

Producers for American Crude Oil Exports, or PACE, is the first lobbying group to form on reversing the ban.

"The end game here is legislative repeal of the ban," said a lobbyist for one of the member producers, who did not want to be named because the group was only recently formed.

Congress passed the trade restriction in the 1970s after the Arab oil embargo caused fears of domestic oil shortages.

The lobbyist said the coalition would be pleased if the Obama administration took steps next year to relax the ban, but PACE will press for the "ultimate certainty from passing legislation to reverse the ban."

The group of 14 producers has "united to create an advocacy initiative to help repeal the outdated ban on crude oil exports," Daren Beaudo, a spokesman for ConocoPhillips (COP), one of the member companies, said in an email.

The ability to export crude is "vital to the country's economic growth and national security, job creation, and strengthening our competitive position in the global marketplace," he said.

PACE will face opposition from a group of four oil refiners called Consumers and Refiners United for Domestic Energy, or CRUDE, who want to keep the ban in place, saying that exports could add costs to their processing.

The U.S. drilling boom of the past six years is expected to proceed and could soon make the United States the world's biggest oil producer, surpassing both Saudi Arabia and Russia. The boom has also created a glut of light crude in the Gulf of Mexico refining hub.

Oil producers say that glut will soon slow down the energy drilling revolution by depressing crude prices. On the other hand, some refiners say they are making changes to their plants that will soon allow them to process much of that crude.

The Obama administration and Congress can both take steps to reverse the ban, but there has been little action this election year. The Commerce Department earlier this year gave permission to two companies to export minimally processed condensate, a light oil. But since then action on some two dozen requests for so-called commodity clarifications has been delayed.

Senator Lisa Murkowski, who will likely head her chamber's energy panel if Republicans win the majority in the Nov. 4 elections, has been among the most avid supporters on Capitol Hill of reversing the ban. But it is uncertain whether any legislation to relax the restriction would pass next year.

News about PACE was first reported by the Houston Chronicle.

PACE also includes the producers Anadarko Petroleum Corp , Chesapeake Energy Corp, Concho Resources Inc , Continental Resources Inc, Devon Energy Corp , Encana Oil and Gas, EOG Resources Inc, Hess Corp, Laredo Petroleum Inc, Marathon Oil Corp, Noble Energy Inc, Occidental Petroleum Corp and Pioneer Natural Resources Co (PXD).

The refiners in CRUDE are: Alon USA Energy Inc, PBF Energy Inc, Delta Air Lines Inc subsidiary Monroe Energy, and Philadelphia Energy Services.

(By Timothy Gardner, Editing by Matthew Lewis)