Rep. Joe Barton to Reintroduce Bill Lifting U.S. Crude Oil Export Ban
Rep. Joe Barton (R-TX) plans to reintroduce a bill to lift the longstanding ban on crude oil exports from the United States. The move comes as the Bureau of Industry and Security (BIS) has clarified export restrictions and what constitutes sufficient processing to convert crude oil into a petroleum product, which is not subject to these restrictions.
In 2014, BIS issued classification rulings, including one for Pioneer Natural Resources, determining that 'lightly' processed condensate could be exported without a license. However, crude oil processed through a distillation tower is generally considered a 'petroleum product' and not subject to export restrictions. BIS has faced questions about whether these rulings were a policy change to circumvent export restrictions on crude oil.
The White House believes recent BIS actions, including the issuance of FAQ guidance on December 30, 2021, have resolved the debate regarding lifting the ban on crude oil exports. FAQ #4 provides guidance on what constitutes processing through a distillation tower and factors used in making that determination. FAQ #6 discusses the commingling of foreign and domestic crude oil in the context of a license application for exports of foreign crude oil.
BIS administers the Export Administration Regulations (EAR) that restrict crude oil exports from the United States. With the clarification of export restrictions and the potential lifting of the ban, the crude oil export landscape in the U.S. is set to change, with implications for domestic producers and global markets.
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