US Commerce Dept widens export definition for shale oil

04-Jul-14

The Commerce Department has widened its definition of what’s traditionally been considered a refined product eligible for shipping to customers abroad. That means more of the oil being pumped from U.S. shale formations may be eligible for export after being run through small-scale processing units, as per Bloomberg. The Commerce Department issued its ruling after Pioneer Natural Resources Co. petitioned for approval to export a type of ultra-light oil that had been stripped of lighter gases to make it less volatile for transport — a minimal level of processing known as stabilization. The ultra-light oil, known as condensate, has been abundant in shale formations during the drilling boom, leading to oversupplies on the Gulf Coast. Any oil that has been processed through a distillation tower — a preliminary form of refining — is no longer defined as crude oil, and therefore is eligible for export, department spokesman Jim Hock said Tuesday. Pioneer uses a distillation unit to stabilize oil it produces in the Eagle Ford Shale of South Texas, most of which is condensate.