History of gasoline and oil exports murky

WASHINGTON — As oil companies clamor to export crude, they may look to the government’s 1981 decision to green-light overseas gasoline sales for guidance.

There’s just one problem: The government records underpinning that move are missing in action.

Analysts at the research firm IHS and staff for the Senate Energy and Natural Resources Committee so far have only been able to unearth a couple of documents from the time, when an interagency government task force examined the issue.

The actual report from that panel has been purged, according to the Commerce Department. Any other records from the “Task Force on Export Control of Refined Petroleum Products” also have not been located.

The bulk of what is available is a six-page notice in the government’s Federal Register, published as part of the Commerce Department’s Oct. 6, 1981 decision to lift quantitative restrictions on the export of gasoline and other refined petroleum products. According to the document, the government panel concluded that lifting the ban on exporting refined petroleum products was in the national interest.

“It was further determined that the domestic economy is no longer threatened by an excessive drain of scarce petroleum supplies and that foreign demand will not cause a serious inflationary impact on the economy,” the notice said.

Gradual change: Oil export ban can be lifted bit by bit, analysis says

The task force — which was headed by the Department of Commerce and included members from the departments of state, treasury, labor and energy, as well as the U.S. Special Trade Representative — may not have gotten all of its conclusions right.

After all, at the time, the group said it “anticipates the potential export market generally would be limited to spot situations resulting in increased U.S. refinery efficiency.” But now, the U.S. is sending record amounts of gasoline overseas and has become a net exporter of gasoline.

Daniel Yergin, vice chairman of IHS, said that as the research firm examined the economics and the origins of the oil export ban, it looked closely at the change in trade policy toward gasoline.

“We looked back at how did they do away with the ban on product exports, because that was an extremely emotional question and volatile question,” Yergin said in an interview. Ultimately, the task force’s review led directly to the decision to lift the limits. “They studied it for a while and then did it.”

Yergin sees a parallel between the gasoline-focused analysis of the early 1980s and the work now going on among government agencies, academia and research firms to understand the what crude exports would mean for the U.S. economy. The resulting data could be used to justify any change in trade policy.

Fighting back: Refiners plot against crude exports

The government’s Energy Information Administration is issuing a series of reports analyzing the issue, beginning with a paper confirming that increases in U.S. oil production will come primarily from light, sweet crude — the kind of stuff flowing out of the Eagle Ford formation in Texas (and not the heavier quality coming out of California wells).

Energy Secretary Ernest Moniz made waves last year when he said the oil export ban was one of a number of policies enacted after the 1973 OPEC oil embargo that needs to be reexamined in light of today’s soaring domestic crude production.

But White House adviser John Podesta sent the strongest signal yet on the issue last month, saying the government was studying whether U.S. refineries — geared in the past few decades toward heavier crudes — can absorb the light, sweet oil coming out of Eagle Ford wells today.

Analysts say that makes clear that the Obama administration is actively contemplating the issue, even if a decision may still be a long way off.

“The fact that the EIA is doing these series of studies between June and December is certainly a message that this is a serious subject of consideration, in a way that was not the case six months ago,” Yergin said.

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