U.S. policymakers are divided over what to do with the glut of domestic oil. Both sides of the debate craft their rhetoric around economic issues, though a report from a Washington think tank with close ties to the Obama administration said that misses the broader point.
“The United States should accept the reality of energy interdependence, take steps to decrease domestic consumption and diversify supplies, facilitate broader energy exports, and more deeply and creatively integrate energy security into strategic policy and military planning,” a report from the Center for a New American Security said.
 
The U.S. Energy Information Administration said crude oil production for the week ending Jan. 31 was 8.04 million barrels per day, a 15 percent increase from the same time last year. That’s lead many political leaders to say now is the time to reverse the ban on crude oil exports enacted in the wake of the Arab oil embargo in the 1970s.
Sen. Lisa Murkowski, R-Alaska, ranking member of the Senate Energy and Natural Resources Committee, said reversing the ban is “critical” for American consumers.
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“The International Energy Agency has warned that maintaining the ban may actually result in shut-in production, which would be to the detriment of the nation’s livelihood,” Murkowski said. “Lifting the ban is about increasing domestic production and creating jobs.”
The 35-page report from CNAS, written by senior fellow Elizabeth Rosenberg, said the economic connection that would come from exports could manifest itself as “coercive political influence” on the international stage. According to the Office of the Historian at the U.S. State Department, the oil embargo from Arab members of OPEC had global implications that lasted well beyond the 1970s. With crude oil exports, that same leverage would be in the hands of Washington.
Sen. Ron Wyden, D-Ore., chairman of the Senate energy committee, said he hasn’t taken a position on crude oil exports, but wanted to make sure U.S. consumers won’t wind up feeling more pain at the pump “because of some theory that everything is just going to turn out hunky dory in the end.”
 US Crude Export Ban
Rosenberg’s report said oil prices in particular have been held down because of the increase in production from U.S. shale deposits. The Commerce Department said last year’s average price of $97.01 for a barrel of crude oil imported into the United States was less than 2012’s average. Nevertheless, oil is traded in a global market that’s “deeply interconnected,” meaning U.S. consumer energy products like gasoline won’t be shielded entirely from international issues, the CNAS report said.
The Commerce Department said the United States imported 2.81 billion barrels of oil last year, down 9.2 percent from 2012. But that’s not necessarily an indication of economic protection. CNAS said much of the debate over what to do now ignores the geopolitical aspects of energy however, suggesting the crude oil export debate is more than a dollars-and-cents issue in and of itself.
By. Daniel J. Graeber of Oilprice.com

Alaska’s largest refinery by capacity may shut down operations permanently beginning in May this year, citing the massive costs associated with clean-up.
The North Pole refinery, operated by Flint Hills Resources LLC—a subsidiary of Koch Industries Inc.–will halt operations at its extraction unit on 1 May, which will effectively stop gasoline production, and close down the No. 2 crude unit by 1 June, which will halt production of refined products such as jet fuel, Bloomberg reported.

This is the second such announcement by the refinery in two years. In early 2012, the North Pole refinery halted operations at its No. 1 crude unit, citing the rising crude prices and the rising cost of cleaning up contaminated soil and groundwater.
“Our company has spent an enormous amount of money and resources addressing soil and groundwater contamination,” Mike Brose, manager of the North Pole refinery, said in the statement.
 
“With the already extremely difficult refining market conditions, the added burden of excessive costs and uncertainties over future cleanup responsibilities make continued refining operations impossible.”
Costs related to the cleanup of sulfolane groundwater contamination, from historic spills of the industrial solvent at the refinery are making operations too expensive.
The state of Alaska recently set a strict sulfolane contamination threshold for ground water cleanup.
Shutting down the North Pole refinery will remove a key source of heat for crude oil shipped down the Trans Alaska Pipeline, according to local media sources. Portions of oil unused by Flint Hills to produce fuel are returned to the mainline. According to Alyeska Pipeline Service Company spokeswoman Michelle Egan, the heat added at the refinery has become increasingly important to ensure oil keeps flowing during the winter.
As such, adjustments to pipeline interface infrastructure at North Pole may be required.
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According to a statement sent to Bloomberg by a Koch Industries spokesman, Flint Hills will sell refined products at the terminals in Alaska using fuel shipped by rail or truck from refiners in the state and “other potential sources.”
The statement also noted that the company “will entertain offers for the assets associated with the refinery as an ongoing enterprise or as a terminal/marketing operation.”
The refinery has 720,000 barrels of tank storage capacity that’s linked to the company’s North Pole terminal.
The closure of the refinery will also mean job cuts. The company estimates that 81 members of the 126-member workforce will be cut after 1 November.

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