US Energy Secretary Ernest Moniz Thursday said with the US awash in domestically produced oil, it may be time to review the country's ban on crude exports.
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But the Department of Energy has no immediate plans to change the composition of or sell off any part of the key Strategic Petroleum Reserve, he said.
"There certainly is a need for a reserve," Moniz told reporters in a briefing at the Platts Global Energy Outlook Forum in New York. "In general terms, I do think that a relook at how the reserve is managed could be relevant, [but] going forward, nothing imminent."
Moniz acknowledged that the US energy landscape is considerably different than when the SPR -- and the US ban on crude exports -- were created in the 1970s, in the wake of the Arab oil embargoes, and he said both may be outdated.
The US has experienced a boom in crude production in places like North Dakota, and pipelines that once took crude from the Gulf of Mexico up to the Midcontinent have now been reversed to bring Bakken crude south, leading to questions about whether the SPR can effectively and efficiently deliver oil to where it's needed most in a crisis.
And declining US crude imports have caused some to question whether a national reserve is needed at all.
Moniz said the DOE has done analyses on whether the US needs more product reserves, besides the US Home Heating Oil Reserve in the Northeast, but those studies were not done in the context of replacing the SPR.
The reserve currently holds 696 million barrels of crude, the equivalent of 93 days of US imports, based on 2012 figures. It has a drawdown capacity of 4.25 million b/d, and the DOE estimates it would take up to 13 days for any oil released from the reserve to reach the market.
As for crude exports, Moniz noted that any decision on whether to relax the ban is up to the Department of Commerce, not DOE, but he said his agency would be ready to provide any technical analysis if called upon. The US bans exports of crude, except for a small amount to Canada.
"Those restrictions on exports were borne, as was the Department of Energy and the Strategic Petroleum Reserve, on oil disruptions," Moniz said. "There are lots of issues in the energy space that deserve some new analysis and examination in the context of what is now an energy world that is no longer like the 1970s."
POLICIES NOT IN CONFLICT
In his keynote address at the forum, Moniz said the Obama administration's support for increased domestic oil and gas production does not conflict with its goals of addressing climate change and lowering greenhouse gases.
The US remains a major importer of crude oil, Moniz said, and the Obama administration is taking aim at reducing those imports through efficiency measures and investments in alternative fuels and vehicle electrification.
"We remain committed, even as we produce much more oil, to lessening our oil dependence, using less oil domestically and having fewer emissions," Moniz said.
He noted that the Obama administration instituted new auto mileage standards that will require vehicles to average 55 miles/gal by 2025, which will save 2 million b/d.
DOE is also investing heavily in cellulosic biofuels through grants, with some of those projects slated to come online next year.
And he pointed out that electric vehicle batteries have come down 60% in cost in the last five years.
"Another 40-50%, and we're talking about being very serious in terms of being competitive," Moniz said. "We're always keeping our eye on the ball in seeing how dramatically costs are being reduced in these technologies."
He also reiterated his support for natural gas as a bridge fuel to lessening US use of coal for power generation, though he cautioned it would not be a permanent solution to lowering greenhouse-gas emissions.
"If we keep cranking down lower and lower on carbon emissions, then gas will become too carbon intensive, without its own carbon capture," he said.
However, Moniz noted that the cost of carbon capture for gas would be lower than that for coal, on a dollar per kilowatt-hour basis.