The US could find its light crude oil production growth capped if it doesn’t allow more of it to be exported, speakers warned during the US Energy Information Administration’s 2014 energy conference. Participants described a so-called “day of reckoning” when US crude production exceeds refining capacity to a point that prices become so heavily discounted to comparable overseas grades that producers decide not to increase production further.
Jason Bordoff, who directs the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs, said, “Many people are concerned that if more US crude exports aren’t allowed, refineries will be so overwhelmed with domestic light crude that they’ll deeply discount the prices they’re willing to pay.”