Lawyer: Incrimental Cases Not Big Shift for Crude Oil Exports
Posted at 4 p.m. on July 14, 2014
Part of the confusion over two crude oil export cases last month stemmed from the private way the federal bureau involved conducts business, according to a lawyer who was involved in one of the cases.
The Commerce Department’s Bureau of Industry and Security “is an agency that determines or plays a part in the export of sensitive technology,” said Jacob Dweck a partner at Sutherland, Asbill & Brennan, who represented Enterprise Product Partners, one of the companies that recently won a certification for exporting condensates. Unlike the Federal Energy Regulatory Commission, which issues public rulings that set energy policy, the bureau’s “processes are not designed to publicize what they do, it is designed to keep what they do secret,” Dweck said.Exports of crude oil are largely banned under current policy, so reports of adjustments to policies on condensates — or certain types of light liquid hydrocarbons — set off a flurry of activity in the oil market, but a terse statement from the Commerce Department left producers wondering what if anything had changed.
“There was an overreaction in viewing these rulings as a significant policy change by the Obama administration,” Dweck told reporters Monday after speaking at an Energy Information Administration conference. “I think it was not that,” he said, describing the permit as part of the normal course, requested in February and granted in March. “It was Enterprise asking for a ruling and getting the ruling it was entitled to,” he said.
The bureau generally does not issue overarching policy guidance but rather handles confidential case-by-case rulings that are specific to the feedstock, technology and resulting protects for specific producers or refiners. Following the news of the two cases, other companies are likely seeking similar rulings to see if their processes qualify.
“You can rely on other rulings, but the rulings are private, so you have to have the ruling to make sure that their feedstock, technology and output is identical to what was covered in the rulings,” he said. “Part of seeking the same ruling is to make sure you are not overstepping the bounds of the ruling.”
Dweck sees the the fastest way to get clarity on the issue would be an announcement from President Barack Obama.
“That’s the easiest way for the administration to create bright-line policy decisions, have the president issue a determination,” he said, Short of a presidential determination, the Commerce Department could instead roll out a change in written policy, which would require public notice and comment.