While many energy companies have been lobbying for a repeal of the U.S. crude oil export ban, Valero Energy has been fighting to keep it as it is. The ban has been in place for 40 years, dating back to the Nixon administration, and bans most foreign sales of domestic oil, although there are some exceptions for shipments to Canada and crude extracted in Alaska and California. While Valero is the loudest voice among the industry, they are also joined by Monroe Energy, Alon USA, Philadelphia Energy Solutions, and PBF Energy in supporting the continuation of the export ban.
Valero is the world’s largest independent refiner and has 15 facilities globally that are capable of processing 2.9 million crude barrels per day. The company is also a resource for politicians looking to learn how refineries operate and how they adapt to the changing energy industry. Valero currently does export crude from the United States to Canada under the exception in the ban, mostly from the South Texas Eagle Ford Shale to a refinery in Quebec.
The company is currently building new topping facilities in Houston and Corpus Christi, Texas in order to add another 160,000 bpd of oil processing capacity. However, Valero is still looking to work with heavier oils from foreign country in its refineries as stated by Executive Vice President Lane Riggs, “there’s been times during the year we wanted to maximize domestic crude oil, but about half the time this year, we’ve been importing.” He went on to say that the heavier, foreign oils were preferable because they could compete fairly easily with domestic.
“We buy about 100 different grades of crude oil,” Riggs said. “We buy whatever is the best and is available and the most attractively priced.”
When asked about the contradiction, Valero spokesman Bill Day said, “We went through that exact same (licensing) process everyone else can go through. Do we need unlimited crude exports when you have a process in place to export crude?” He stressed that the current policy and ban are working, therefore there is no need to change it.
However, not everyone in Washington or the energy industry agrees. Since the export ban applies mostly to crude, it does not majorly affect the refined petroleum project Valero works with. The executive director of Producers for American Crude Oil Exports, George Baker, believes leaving the export ban in place is unfair and cites Valero’s ability to purchase crude internationally, refine it, then sell to whomever they like, leaving energy companies without their refining capacity in the cold.
“They are taking advantage of the very flooded, glutted market that they are creating to drive the price down, he said. “That’s why they’re doing it, and yet on the other hand, they are saying on the Hill that it’s a terrible thing that U.S. crude oil producers should be allowed to do the same thing.”
With the vote on lifting the U.S. crude export ban looming, there could very well be a shift in how the United States does business. To read the latest, click here.