Democrats challenge administration’s move on oil exports

WASHINGTON — Two Democratic senators are challenging the Obama administration’s decision to allow a pair of Texas companies to sell barely processed ultra-light oil overseas, suggesting that the rulings run afoul of the decades-long ban on exporting U.S. crude.

Although unprocessed crude generally cannot be exported, refined products such as diesel, gasoline, and jet fuel can be freely sold overseas.

In issuing private rulings to two Texas firms, the Commerce Department’s Bureau of Industry and Security effectively said that a super-light oil known as condensate qualifies as a refined product — and consequently is not barred from export — as long as it has been stabilized and run through a distillation tower.

While some energy analysts said the rulings merely test the limits of what qualifies as refining, Sens. Ed Markey of Massachusetts and Robert Menendez of New Jersey said they leapfrog right over those legal boundaries.

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In a letter Wednesday to Commerce Secretary Penny Pritzker, the senators noted that existing BIS regulations explicitly include condensate in the definition of crude oil covered by the export ban.

“Export of condensate or other light crude oils appear to be prohibited unless and until the regulation is revised following notice and public comment,” the senators told Pritzker.

Without a revision of those regulations and a presidential finding that crude exports are consistent with the national interest, “the Commerce Department does not appear to possess the authority to issue exemptions for condensates or some subset of condensates from the crude export restrictions.”

No policy change

The Commerce Department has insisted that the classification orders for Pioneer Natural Resources Co. and Enterprise Products Partners are not a change in policy and do not constitute any kind of broad redefinition of condensates or crude oil that is covered by the export ban. Any broad regulatory rewrites would play out in public under a formal rule making process, requiring comment periods and likely drawing plenty of scrutiny.

Markey and Menendez said they want to take a closer look at the orders.

And they pressed Pritzker for more details on the BIS’ handling of crude export requests, including the agency’s plans for formally redefining condensates.

Markey & Menendez letter on condensate exports