For nearly four decades, the US federal government has maintained a “ban” on exporting domestic crude oil supplies. It’s been a cornerstone of the national energy landscape since President Ford signed the 1975 Energy Policy and Conservation Act into law in pursuit of that perpetual goal of American politicians, energy independence.
Although the legal framework includes a number of exceptions—allowing exports of North Slope Alaskan and heavy California crude, as well as exports to Canada, among other loopholes—big oil companies have had the ban in their crosshairs for years. Now, in the midst of a production boom (despite moderate domestic demand), the industry has launched a lobbying assault on federal officials in the hopes of further boosting the payoff for large-scale fracking and drilling. And their efforts appear to be paying off.
A little known federal agency, the Bureau of Industry and Security (BIS), has quietly begun eroding the ban, issuing rulings exempting certain crude oil streams from the ban in a series of secret rulings given to oil companies. The apparent flip-flop in policy has provoked rampant speculation even among industry players and media. So murky is the underlying rationale that even the FAQ document BIS subsequently posted to its website raised more questions than it answers, a fact well illustrated by competing headlines in the industry press:: “US Ruling Loosens Four-Decade Ban on Oil Exports,” “Ban on Oil Exports Seen Dying One Ruling at a Time,” “Game Changer or Symbolic Move?” and “Did the Commerce Condensate Export Rulings Mean Nothing?”
It’s a potentially dangerous move because removing the ban could induce large-scale drilling on sensitive lands and contribute meaningfully to destabilizing the global climate. For some regions of the country—such as the Gulf Coast, with its abundant oil infrastructure, and the Pacific Northwest, with its Asia-facing ports—lifting the ban could also mean a flood of overseas-bound crude oil moved in by train and pipeline, which would increase the risks of fires, spills, and other disruptions.
We're in our Spring Fund Drive—make a gift now to support more research like this!
It’s a policy decision with enormous consequences—one that is especially dangerous when made behind closed doors by an out-of-sight government agency in apparent consultation with industry lobbyists.
That’s why today Sightline Institute is joining with Earthjustice and Oil Change International to submit an official US Freedom of Information Act (FOIA) request. We are asking the Obama administration to explain what it is doing and why—and to share with the public whether officials intend to loophole the existing ban to death or whether the secretive rulings apply only to niche light oils and particular refining processes.