By LYNN DOAN and DAN MURTAUGH
Bloomberg

The US capacity to refine light shale oil would still expand should legislators vote to lift the oil-export ban, just not as much as it would if the restrictions remain in place, an analysis by Turner, Mason & Co. for the Energy Information Administration (EIA) shows.

Domestic capacity increases by 2.4 million bpd, assuming the ban is unchanged, and by 800,000 if it’s lifted.

“More costly hydroskimming refineries are not built,” the report shows, “because the ability to export crude oil prevents the price of WTI from declining to a level that would support such investment.”

The study projects the US to become one of the world’s largest oil exporters if domestic production continues to surge and policy makers lift the four-decade ban that keeps most crude from leaving the country.

America would be capable of sending as much as 2.4 million bpd overseas in 2025 if federal policy makers were to eliminate restrictions on most crude exports, the analysis shows. That would make the US the fourth-largest oil exporter, behind Saudi Arabia, Russia and the United Arab Emirates, based on 2013 EIA data. The report assumes domestic output rises by 7.2 million bpd from 2013.

The analysis is part of a series of studies the US government is performing following a 71% surge in domestic oil production over the last four years. Drillers including Harold Hamm of Continental Resources and John Hess of Hess have been calling on the government to lift the ban on crude exports as they pump more light oil out of shale formations from North Dakota to Texas.

“We are already the world’s leading exporter of refined products,” said John Auers, executive vice president at Dallas-based energy consultant Turner Mason. “Based on developments in the last few years in tight oil formations and deepwater, the US has the resource base to be a big crude exporter as well.”

The report doesn’t account for potential changes in domestic crude output and prices because of the lifting of the US export ban, nor does it consider competition abroad.

Turner Mason’s study was designed to show the upper and lower bounds of the future for US energy, Auers said. Exports of “2.4 million is probably not a likely scenario, but it shows what might be possible,” he said.

The consultant’s forecast for exports in 2025 is almost double what EIA administrator Adam Sieminski said the US could export right away if restrictions were limited. During a Dec. 11 congressional subcommittee hearing, Sieminski said there was space in today’s global market for 1 million to 1.5 million bpd of US crude.

Alaska Senator Lisa Murkowski, the Republican chair of the Senate Energy and Natural Resources committee, has said she’ll bring a bill forward this year to overturn the export ban. Several reports including one issued last year by IHS found that ending the ban would lower US pump prices by putting pressure on international crude oil markets.

Refiners such as PBF Energy have argued against lifting restrictions, saying it would reduce investment in new equipment in the US and possibly hurt East Coast plants that now depend on rail shipments of domestic crude for more than half of their supplies.