Oil chief: Crude export debate about education

The head of oil producer ConocoPhillips Co. said that the key to moving forward on allowing crude oil exports will be to educate policymakers and the public about the issue.

Ryan Lance, the company’s chief executive officer, said people need to understand the “counterintuitive” fact that, while the United States’ production of light oil is increasing rapidly, domestic refineries work best with heavy crude, and the light crude should be exported.

{mosads}“Everybody I’ve talked to thinks it’s good policy, and people are trying to figure out the politics of the situation a little bit, and how can they represent it back to their home constituency,” Lance said after a speech hosted by the U.S. Chamber of Commerce.

“So that’s the education part about it, just to tell people that the refineries we have in the U.S., while they’re great piece of equipment, they’re not specifically designed to run this kind of crude oil, and that makes a difference,” he said.

ConocoPhillips is one of the few major oil producers in the United States that does not also own a refining business.

While most major oil companies support lifting the 40-year-old ban on exports, independent refiners are pushing back, fearing that it would reduce the supplies of oil and raise their costs.

But Lance, who repeatedly referred to refiners as his friends, sought to ensure them that oil exports did not have to hurt the industry.

“I tell my refininer friends: don’t worry. There’s going to be enough to refine in your refineries,” he said.

Lance said that because of the export ban, crude in the United States costs about $5 to $10 less than it does elsewhere.

But refiners would still save money on domestic crude because they not have to pay to ship it overseas, he said.

“And you still have a competitive advantage,” Lance said.

Ending the export prohibition would also reduce oil and gasoline prices, add millions of jobs, add trillions to government revenues and increase the country’s gross domestic product by more than $100 billion, he said.

Lance warned that Congress must start to act soon to end the ban, because around 2017 or 2018, it will start to cause a drop in production.

“We’ve got to gain some traction this year, because certainly as we go into an election year, it becomes harder,” he said.