The shale oil and gas revolution has dramatically altered the domestic energy landscape.

Prior to the shale boom, refiners had invested huge sums to enhance their ability to process volumes of heavy crude oil produced from Canada’s tar sands.

But surging domestic production of light crude oil from prolific unconventional plays such as the Bakken Shale, the Eagle Ford Shale and the Permian Basin has reduced US imports by almost 32 percent between 2010 and 2012.

This displacement accelerated last year, with shipments of light crude oil to the US plummeting by 32 percent. (See Growing Oil Production, Growing Pains.)

These trends raise questions about when domestic production of light crude oil will overwhelm refining capacity. The Gulf Coast is at particular risk, with a flood of crude oil headed to the Houston area and the cushion of displaced imports wearing dangerously thin. (See The Crude Oil Glut Heads South.)

Against this backdrop, exploration and production companies have stepped up their lobbying for the US to permit at least some oil exports.

The government has prohibited international shipments of domestically produced crude oil since 1973, when the Nixon administration placed the hydrocarbon on the Commerce Control List as an item in short supply. (See The Push for US Crude Oil Exports.)

On May 29, 2014, the US Energy Information Administration released the first in a series of reports on the developments that provided the impetus for calls to relax the ban on US crude oil exports and the potential ramifications of a shift in US policy.

The content of US Crude Oil Production Forecast: Analysis of Crude Types shouldn’t surprise Energy & Income Advisor subscribers.

This graph from the report, which breaks out projected US crude oil output by quality, quantifies what we’ve said for over a year–that North America is fundamentally long light crude oil.

However, the Energy Information Administration’s rationale for researching this subject ostensibly gives credence to recent comments from US Energy Secretary Dr. Ernest Moniz about revisiting the prohibition on oil exports.

The preface to the Energy Information Administration’s recent forecast of US crude oil production acknowledges the importance of this issue and policymakers’ need for clarity on the implications of loosening the export ban:

Given the likelihood of continued growth in domestic crude production, and the recognition that some absorption options, such as like-for-like replacement of import streams, are inherently limited, the question of how a relaxation in current limitations on crude exports might affect domestic and international markets for both crude and products continues to hold great interest for policymakers, industry, and the public. In response to multiple requests, EIA is developing analyses that shed light on this question.

This introduction also describes the paper as “a starting point for the further analyses of the market outlook and effects of a possible relaxation of existing restrictions on crude oil exports.”

Rest assured, we will continue to monitor this situation.