Two #Senators Seek Details of #Oil-#Export Rulings 02.07.2014 Lawmakers Want to Know if Rulings Violate Oil-Export Ban Two U.S. senators have asked the Commerce Department to provide details about recent federal rulings that may allow exports of some American oil that hasnt gone through the traditional refining process. Senators Edward Markey (D., Mass.) and Robert Menendez (D., N.J.) sent a letter on Wednesday to Secretary of Commerce Penny Pritzker questioning the validity of rulings that could allow two Texas energy companies to sell minimally processed ultralight oil, known as lease condensate, to foreign buyers. Oil exports out of the U.S. have been banned since the 1970s—with a few exceptions that require special permits—but companies can export refined fuels, such as gasoline and diesel. Many in the energy industry have been lobbying to soften the export ban as oil and gas production soars amid the U.S. drilling boom. At issue is whether ultralight oil that has been minimally processed qualifies as a refined fuel. The Wall Street Journal reported last week that Pioneer Natural Resources Co. and Enterprise Products Partners LP obtained confidential letters from the Commerce Departments Bureau of Industry and Security saying their stabilization and distillation-process equipment create a refined fuel that is approved for export. Industry experts said that threshold is lower than the traditional standard of refining oil. These private rulings may have been issued in contravention of the long-standing ban on exports of U.S. crude oil, which also prohibits the exports of lease condensate, the senators said in their letter. Mr. Menendezs office provided a copy of the letter to the Journal. Mr. Markeys spokesman said Congress deserves a response from the Commerce Department. Because these export restrictions are based on laws passed by Congress, if theres the potential that Commerce has modified or relaxed the regulations based on that law then they need to talk to Congress about what they did and why they did it, spokesman Eben Burnham-Snyder said. The rulings clear the way for the first exports of unrefined American oil in nearly four decades, allowing energy companies to start chipping away at the longtime ban on selling U.S. oil abroad. Energy analysts at Barclays investment bank said in a note to clients Wednesday that as much as 800,000 barrels a day of ultralight oil could be exported from the Gulf Coast if the Commerce Departments determination is extended to other companies. Many energy companies have complained that the federal governments rulings in favor of Enterprise and Pioneer muddy how the ban should be applied. Stabilization and distillation equipment similar to that owned and operated by the two companies is common in the Eagle Ford Shale of South Texas where most oil production qualifies as ultralight oil, experts say. The Commerce Department said it is looking into the matter. It said last week that there had been no change in policy on crude oil exports. The senators have asked the department to provide copies of the two private rulings given to Enterprise and Pioneer, and any other rulings made to companies in the last 12 months that relate to interpretations of the oil-export ban or condensate shipments. online.wsj/articles/two-senators-seek-details-of-oil-export-rulings-1404331013
Posted on: Thu, 03 Jul 2014 05:26:18 +0000
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