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Refiners say argument for oil exports is wrong

A group of refiners opposed to exporting crude oil said Thursday that a common argument in favor of exports is wrong.

Consumers and Refiners United for Domestic Energy released a study it commissioned that found that United States refiners can accommodate the additional oil that is being produced domestically.

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Much of that oil is light crude. But advocates for lifting the four-decade-old ban on crude exports have argued that domestic refineries are better suited to heavy crude, which is often imported.

“This insightful expert analysis refutes the argument advanced by many domestic oil producers, as well as some analysts, that the U.S. domestic refining industry will soon be unable to absorb all the oil that, thanks to new drilling techniques, is now flowing from North Dakota, Texas and other regions of the U.S.,” Jeffrey Peck, a spokesman for the group, said in a statement.

The argument has been used by oil companies that want to export their products, as well as some Republicans in Congress. Research earlier this year from the Energy Information Administration backed up that argument.

The refinery group’s study said refiners can take on an additional 3.1 million to 4.3 million barrels of light oil a day.

The research found that refiners have been working to build capacity to handle light crude in response to the recent oil domestic boom.

Zachary Cikanek, a spokesman for the American Petroleum Institute, criticized the refiners’ report, saying it didn’t analyze whether refinery upgrades would be economically feasible, a key factor in determining whether the upgrades would actually happen.

“Leaving the trade ban in place would mean far less efficient use of America’s refining capacity, higher costs and lower U.S. output,” Cikanek said.

Refiners fear that opening the United States’ oil to the world market could increase prices or make them more volatile, increasing refiners’ costs.