(Adds White House comment, paragraphs 10 and 11)
By Tom Doggett
WASHINGTON, July 3 While the U.S. oil industry
wants access to more federal lands to help reduce reliance on
foreign suppliers, American-based companies are shipping record
amounts of gasoline and diesel fuel to other countries.
A record 1.6 million barrels a day in U.S. refined
petroleum products were exported during the first four months
of this year, up 33 percent from 1.2 million barrels a day over
the same period in 2007. Shipments this February topped 1.8
million barrels a day for the first time during any month,
according to final numbers from the Energy Department.
The surge in exports appears to contradict the pleas from
the U.S. oil industry and the Bush administration for Congress
to open more offshore waters and Alaska's Arctic National
Wildlife Refuge to drilling.
"We can help alleviate shortages by drilling for oil and
gas in our own country," President Bush told reporters this
week. "We have got the opportunity to find more crude oil here
"As a nation, we can have more control over our energy
destiny by supplying more of the oil and natural gas we'll be
consuming from resources here at home," Red Cavaney, president
of the American Petroleum Institute, said in a letter last week
to U.S. lawmakers.
But environmentalists and other opponents to expanding
drilling areas could seize on the record exports to argue
Congress should not open more acres if U.S. refineries are
churning crude oil into petroleum products that are sent out of
the American market.
"It doesn't look good to say: 'We need more oil.' But then
export the refined products that you're getting. It doesn't
seem to be consistent," said Jim Presswood, energy lobbyist for
the Natural Resources Defense Council.
But many energy experts say oil and petroleum products are
traded globally, and it may make economic sense to export
gasoline refined along the U.S. Gulf Coast to Latin America and
import European-refined gasoline to U.S. East Coast markets.
"The fact is that the (United States) participates in
global markets for both crude and refined products, and there
are any number of variables that impact supply and prices in
those markets," said Bill Holbrook, spokesman for the National
Petrochemicals and Refiners Association.
The White House said it was against requiring U.S. oil
products to stay at home.
"Forbidding exports of U.S. petroleum reduces the incentive
for domestic suppliers to produce, and could potentially lead
to higher prices if U.S. production or refining declined," said
White House spokesman Scott Stanzel.
The 1.6 million barrels a day in record petroleum exports
represented 9 percent of total U.S. refining capacity of 17.6
million barrels a day.
However, with refiners operating at 85 percent of capacity
during the January-April period, the shipments represented a
much a larger share of total U.S. oil products produced.
The exports were also equal to half the 3.2 million barrels
of gasoline, diesel fuel and other petroleum products the
United States imported each day over the 4-month period.
The biggest share of U.S. oil products exported went to
Mexico, Canada, Chile, Singapore and Brazil.
U.S. consumers are paying record prices for gasoline and
diesel fuel, which the Bush administration blames in part on
While the administration argues that more supplies would
help to bring down prices, U.S exports of diesel fuel in April
averaged 387,000 barrels per day, up almost seven-fold from
59,000 barrels a day in the same month a year earlier.
U.S. gasoline shipments in April averaged 202,000 barrels a
day, the most for the month since 1945, when America was
sending fuel overseas to ease supply shortages in other
countries during World War II. Gasoline exports in April 2007
were almost half at 116,000 barrels per day.
Residual fuel exports in April were 377,000 barrels per
day, the fourth highest level for any month, and up 10 percent
from 344,000 barrels per day a year earlier.
John Felmy, the chief economist at the American Petroleum
Institute, said a portion of the oil products exported,
especially diesel, was fuel that did not meet U.S. clean air
requirements and therefore could not be sold in America. "You
may have some that you're not able to use," he said.
Also, while U.S. gasoline demand is down due to high prices
and a weak American economy, there is "strong economic growth
outside the United States" where fuel is often subsidized and
demand is high, said John Cook, director of EIA's Petroleum
However, both the EIA and API admitted they did not know
why daily U.S. gasoline exports to Canada skyrocketed to 41,000
barrels in January-April this year from 9,000 barrels in 2007.
The EIA said more U.S. diesel is going to Latin American to
fuel power plants because of a shortage of natural gas in the
region, and China has switched to diesel from coal to run some
of its generating facilities in order to reduce smog ahead of
the summer Olympics next month in Beijing.
(Editing by Christian Wiessner)