John S. Watson, chairman and CEO of Chevron, had some harsh words for independent refiners who oppose lifting the U.S. ban on crude oil exports. Watson was the main speaker at the Greater Houston Partnership’s second annual State of Energy event.
It’s a major point of contention between the upstream and downstream segments of the oil and gas industry. Exploration and production firms tend to favor lifting the crude oil export ban, which would let them sell to world markets at higher prices than they can get at home. Independent refiners worry lifting the ban will drive up the cost of crude oil, w
hich they use to manufacture their products.
So where does that put Chevron, a company with both up- and downstream operations?
“There is no case for consumers, because the sellers of gasoline are going to seek the highest price,” Watson said.
He noted that refiners can export gasoline and diesel.
“If you really think it through, if you artificially keep crude oil prices down, there will be less crude oil produced on the world market. That will drive prices up,” he said.
A bill to repeal the 40-year-old export ban (HR 702) is expected to go to the floor of the House of Representatives for a vote sometime this week. A similar measure recently passed the Senate Banking Committee.