Heitkamp and Sen. John Hoeven, R-N.D., were among lawmakers who called for the approval of Mexico’s trade request to swap heavy crude for U.S.-produced light sweet crude earlier this year, and both have sponsored legislation pushing to lift the ban on oil exports all together.
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The U.S. Department of Commerce on Friday told Congress it plans to approve contracts to export crude oil to Mexico, lifting a four-decade, unofficial ban on selling oil south of the border. It also doesn’t change restrictions on exporting oil to other countries, a senior official told the Houston Chronicle.
The Commerce Department, which is responsible for such exports, is “acting favorably on a number of applications” to export oil to Mexico in exchange for importing oil to the United States from Mexico, Reuters reported.
Energy producers including Exxon Mobil Corp. and ConocoPhillips have called for an end to the export restrictions after a drilling boom boosted U.S. oil production to the highest level in more than 40 years.
As domestic oil production has surged past 9 million barrels a day amid a domestic energy revolution from shale formations, companies have feared a price crash here amid abundant supplies and sought ways to sell the oil in higher- priced foreign markets.
Mexico applied for a crude oil swap eight months ago after the US signalled that it was ready to relax the rule, which has been put under pressure by the huge expansion of production. Apart from a limited exchange of oil for the U.S. strategic reserve in the late 1990s, Mexico has not had access to U.S. oil. Pemex, as the company is known, seeks to send heavier crude to the United States in exchange for lighter oil.
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The Mexican approval is different from Canada’s exemption, which doesn’t require imports of similar quantities of Canadian crude. Critics say a full repeal could raise U.S. gasoline prices, although a slew of research studies suggest liberalizing trade would more likely lower the costs for U.S. consumers.
