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United States Businesses Power

BP Finds Way To Bypass US Crude Export Ban 247

Posted by samzenpus
from the letter-of-the-law dept.
Hugh Pickens DOT Com writes "Bloomberg reports that the oil industry is pressuring President Barack Obama to end the 41-year-old ban on most crude exports but British Petroleum (BP) isn't waiting for a decision. The British oil giant has signed on to take at least 80 percent of the capacity of a new $360 million mini-refinery in Houston that will process crude just enough to escape restrictions on sales outside the country. 'It's a relatively inexpensive way around the export prohibition,' says Judith Dwarkin 'You can lightly ruffle the hydrocarbons and they are considered processed and then they aren't subject to the ban.' Amid a flood of new US oil, the demand for simple, one-step plants capable of transforming raw crude into exportable products such as propane is feeding a construction boom along the Gulf Coast. The first such mini-refinery, built for 1/10 the cost of a complex, full-scale refinery, is scheduled to open the first phase of its 100,000 barrel-a-day crude processing plant in July, The mini-refineries take advantage of the law that allows products refined from oil to be sold overseas, though not the raw crude itself. 'The international buyers of these products will likely need to refine them further, so this is basically a veiled form of condensate exports,' says Leo Mariani."
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BP Finds Way To Bypass US Crude Export Ban

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  • But ... the CO2!

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Not BP's problem, and until we make it theirs, why should they bother?

    • Regardless of the ecological effects of our chemical energy dependency and the grey-area nature of this workaround, I applaud the move in general.

      The world has given too much power to oil- and gas-funded dictatorships. Right now, the West is hesitating about sanctions against Russia (which are required for peaceful settlement of the crisis in Ukraine) because they depend too heavily on the Russian resource exports.

      The proper way is of course to lift the restrictions, but that is a heavy, lengthy politic

      • The world has given too much power to oil- and gas-funded dictatorships.

        It is not a coincidence that some of the world's most odious governments are major petroleum producers. Oil revenues can buy off opponents, and allow otherwise disastrous economic policies to continue. Putin and the Saudi Monarchy would both be long gone without money from oil exports to keep them afloat. Venezuela's economy appears to finally be collapsing, despite their oil exports, but that should have happened long ago. The worst cases are countries like Nigeria, that are basically run as kleptocrac

        • by nojayuk (567177)

          "It is not a coincidence that some of the world's most odious governments are major petroleum producers. "

          The USA is currently no. 3 in terms of oil production at about 10% of the world's total. North Korea is 110th, according to Wikipedia. Just sayin'.

      • by mlts (1038732)

        IMHO, too much focus has been done on the US on the Middle East. In reality, what needs to be the focus is Eastern Europe and the Pacific Rim. A Middle East in turmoil is a norm. A pissing contest between Japan, China, Russia, Singapore, the Koreas, and other nations in the area will be no less than World War 3 with its effects felt worldwide.

        Oil is a nice thing to have, but keeping China and Japan from going to war with each other is far more important because that conflict would fundamentally affect th

  • nothing new (Score:5, Insightful)

    by gbjbaanb (229885) on Friday March 07, 2014 @09:14AM (#46427169)

    crude oil, lightly shaken, and exported to the world.
    revenues, lightly tossed, and exported to Bermuda.

    Both cases just avoiding the law through legal means. In other words, the law's an ass.

    • The world prefers its crude shaken, not stirred.

  • by Anonymous Coward on Friday March 07, 2014 @09:32AM (#46427247)

    BP haven't been known as British Petroleum for many years. It seems to be a tag most used (now) by the US. [I wonder if there have been any recent events that might cause the folks in the US to think that US folks weren't involved? Better to point the finger elsewhere.]

  • Politicians and regulators still have yet to realize that people will do what they see fit, despite laws, regulations, and penalties. On the personal side, if you're trying to regulate people harming themselves, they are willing to spray paint in a bag and destroy their brains by inhaling it to "get high"...what law can you make that will affect such a naked desire to harm one's self? Outside of the brain damage, this seems to be the same sort of thing, on a much larger scale. The market always exists, a
    • by timeOday (582209)
      Nice analogy... You know those cheesy ads [youtube.com] BP is always running since the Gulf Coast disaster to rehabilitate their image? You could help them make a new one - "BP! We're just like paint huffers!!! You'll never stop us! BhaaHaHaHaHaaaa!!!"
  • by retroworks (652802) on Friday March 07, 2014 @09:52AM (#46427361) Homepage Journal

    I did some reading to find the basis of the 1975 law, administered by my "favorite" federal agency, the Bureau of Land Management (Jack Abramoff's digs). Apparently it was originally passed during the OPEC embargo when the USA was concerned about domestic shortages. Then it becomes like ethanol or agricultural subsidies, it stays because it reduces competition. Probably a violation of the WTO as well, same as when USA, EU and Japan challenged China's rare earth metal export bans... which China tried to express as an "environmental law"... which is the only current argument I can find for the crude export ban (CO emissions).

    So is it a case of corporations skirting a government law, or a government skirting an international fair trade treaty?

    • So is it a case of ... a government skirting an international fair trade treaty?

      I sure hope so. Enough violations and maybe we can just scrap the WTO and a bunch of "free trade" agreements.

      P.S. Don't rebut this by citing a simple minded analysis like comparative advantage alone. Given how many things the simplistic application of that leaves out, it'd be more credible to cite a comic book.

    • I think that the United States has a vested political interest in controlling the sale of oil. [wikipedia.org] Which is not to suggest that you are wrong per se, but I think that the US oil policies are better understood in the context of hegemony than fair trade. However, the oil industry has been putting all of their propaganda efforts towards lifting this ban; I mark a half-dozen articles [google.com] in Forbes alone within the last two years. As long as they can keep away from any concerns about national security, they might get th

      • I think this is incorrect, or at least you need to better define "the oil industry". Here is booklet put out by the USA Refiners in support of maintaining the crude export ban. If by "industry" you include Dutch Shell, BP, and others who want to refine in competition with the USA's domestic refiners, you can find their "rebuttal" on page 16. http://priceofoil.org/content/... [priceofoil.org]
    • Re: (Score:3, Funny)

      by DarkOx (621550)

      Our foriegn policy is so nakedly hypocritical I am not sure it matters.

      Obama wins an election rams through a policy that is unpopular with the majority loudly protested by a small minority and the line is "elections have consequences."

      Egypt elects a leader (belonging to party we don't like) and before his elected term is up, the military is ousting him, but oh no "its a not coup" we are told; because it it was we would have to stop giving the Egyptian military foreign aide, which would leave us with no way

    • Exactly. It was passed for political reasons when the resource market was completely different. Now both the market and the political situation has changed, and it makes sense to lift the ban or work around it ASAP. Then it will be easier to negotiate / impose sanctions upon authoritative regimes like Russia.
  • Ahh the rule makers always love to complain about how people follow their rules.

    Another way to say the same thing is that the export restrictions created a market for lightly processed oil products. If there is demand there is demand, it doesn't go away because you will it to. If that demand can be met in some way that fits in the rules and is still profitable, people WILL do it.

    Trying to call that getting around a restriction is like the magic player complaining that someone insisted on playing stuff at th

  • If we can only export refined oil, it means we have to refine it on US soil. This is a dirty business, producing loads of crap you don't want in your environment. This ban forces us to destroy our own environment, while exporting the goodies that come out of it. This doesn't seem long-term smart.

    • by BitZtream (692029)

      In theory, (which is false in this case, I'm sure) we would do the best possible, cleanest refining we could, so as to cause the least amount of damage to the planet on the whole. That is, if we were looking beyond ourselves.

      We aren't, and we won't.

    • by drinkypoo (153816)

      The idea is to keep the oil in the US, for strategic reasons. If we burn up all the world's oil and keep ours in reserve, we're going to be in good economic (if not ecologic) shape in the endgame. That assumes, of course, that burning all those fossil fuels doesn't doom us first — the ecopalypse outpacing the singularity, if you like, though both labels are sensational. All life will not end, but equally, intelligence (and output) will not reach infinity.

      • by swb (14022)

        This. And I think it's not even endgame, there's shorter time horizon strategic value to have surplus crude in the US where we're not needing to rely on imports in a crisis situation.

        We can keep the tankers running in brushfire wars, when we start tangoing with the big boys that's not as good of an option. Being able to get it at home is a lot more appealing.

  • by Gothmolly (148874) on Friday March 07, 2014 @10:22AM (#46427525)

    The more you tighten your grip, the more will slip through your fingers.

  • by xxxJonBoyxxx (565205) on Friday March 07, 2014 @10:44AM (#46427645)

    >>...new $360 million mini-refinery...demand for simple, one-step plants capable of transforming raw crude into exportable products such as propane is feeding a construction boom along the Gulf Coast.

    Call me cynical, but it seems that most legislation aims to protect the existing jobs of stalwart political supporters in sponsors' districts. (e.g., Obama's first term "stimulus," which was mostly used to shore up the existing salaries and pensions of his political base.) Perhaps the intent of this bill was to continue a Gulf Coast construction boom, leading to more voter, er, labor-intensive refinery jobs?

    • "which was mostly used to shore up the existing salaries and pensions of his political base"

      I've got bad news for you - the stimulus pretty much all went to government contractors, the vast majority of which are controlled by, and for the benefit of, right-leaning individuals. The money was spread far and wide, so at the ground level it's probably 50-50, but those folks do nothing but vote and none of them give enough to campaigns to make it interesting. I don't remember huge stimuli for the entertainment

  • It always amused me that some people thought more domestic drilling would return us to the days of cheap fuel. They seemed to think that the oil companies would ignore that they could get a higher price overseas and sell to us cheap out of the goodness of their hearts.
  • by pla (258480) on Friday March 07, 2014 @11:24AM (#46427893) Journal
    Best possible answer:

    Let them finish their mini-refinery. Let them ramp up production. Let them sign hundreds of contracts obliging them to deliver on partially-refined product.

    Then, and only then, really fuck 'em by ban the export of insufficiently-refined product.

    I have gotten so sick of companies dodging the intent of the law lately. I by no stretch of the imagination count as a hardcore law-and-order authoritarian, but it doesn't take Mother Jones to point out that we simply can't allow situations like this, or the whole Apple/IBM/Google/etc paying no US tax, and so on, to continue. If a company wants to play on our field, they need to follow our rules as intended.

    "Well whatd'ya know, the rules of golf don't explicitly ban using a tunnel-boring machine to dig a straight shot to the cup! You sure got us, have fun turning Augusta into a strip-mine."
    • by iggymanz (596061)

      what exactly is the intent of the ban that is so evil compared to world oil market?

    • by iggymanz (596061)

      in this case the law is stupid and doesn't do its claimed purpose, which was to protect U.S. citizens from oil price volatility. Prices of gasoline and other crude protect spike and dip according to global world oil market (imagine that) even with that useless law.

    • by evilviper (135110)

      I have gotten so sick of companies dodging the intent of the law lately.

      You're talking about Aereo, right?

      No?

      Awkward...

      • by pla (258480)
        You're talking about Aereo, right?

        Well, except insofar as the courts have actually spanked them rather than shrugging and saying "oh well, you found a loophole, have a nice day"... Yes, actually, I would include them in that. Cool idea or not, their core business model involves nothing more "noble" than trying an end run around rebroadcast rights. You or I have every right to time-shift what we watch; that doesn't even play in the same fair-use-ballpark as a for-profit company actively rebroadcasting s
    • by u38cg (607297)
      Yes, not fucking with companies in that way is one of the US's competitive advantages. We call the alternatives "Venezuela".

      It's a stupid law which is indefensible. This is not corporate taxes.

      • by pla (258480)
        It's a stupid law which is indefensible. This is not corporate taxes.

        It only counts as a stupid law because it fails in its intent. To that extent, we agree.

        Beyond that, though, I would have to consider energy self-sufficiency one of the few legitimate "national security" interests we have. This doesn't involve BP selling cheap shoes abroad; it involves nothing less than BP pillaging our natural resource for the price of laughable token "leases" on the mineral rights to truly huge swaths of land, on
  • Fedora is doing the same thing: skirting the law.

    The theory was that an unjust law could be ignored. In this case, export laws to certain countries was being skirted by simply not asking where the code came from, wink wink, nod nod.

    Perhaps BP thinks the law is "unjust" and thus has a right to ignore the law?

    Why can Fedora do this and people applaud it and BP is a villain?

    Seems to me sauce for the goose is sauce for the gander, and allowing people or corporations to selective ignore laws means there is no ru

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