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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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  • by Anonymous Coward on Friday March 07, 2014 @09:31AM (#46427245)

    This is why I sometimes like the Finnish system of law in which something that is clearly done in order to circumvent a current law is considered as breaking it. This removes all the stupid verbal acrobatics that US lawyers resort to in order to interpret a law differently than what was intended.

    Example: Say you want to donate someone a large sum of money, but don't want to pay taxes for it. One might try to circumvent the tax by marrying someone, immediately divorcing and having a contract that in case of divorce the other person has a right to precisely the amount of money that you were supposed to donate to them in the first place.

    Technically if you do that, you don't have to pay any tax, but the tax authorities would immediate judge this as an attempt to bypass taxes and you would be ordered to pay the tax doubled. This applies to practically all laws and the ways that courts interpret them. Most Americans probably think this is stupid, since they see possible abuse. However, this hasn't materialized in Finland.

  • Re:It's fascinating (Score:4, Interesting)

    by ebno-10db (1459097) on Friday March 07, 2014 @09:51AM (#46427351)

    It's the same thing people.

    No it's not. Forget the simple minded propaganda that copyrights are a form of property like physical property - they're a government granted and enforced monopoly that raises prices many fold by artificially restricting what would otherwise be almost cost free production of copies. That's nothing like petroleum or any other physical property. Moreover, unlike creative works, or even manufactured items or services, there is a fixed quantity of petroleum available. The situations are the exact opposite of each other.

  • 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?

  • 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?

  • Re:Yes, but... (Score:5, Interesting)

    by hawguy (1600213) on Friday March 07, 2014 @12:35PM (#46428467)

    If you REALLY want to see the price of gas lowered, there is a simple way to do this.

    Do a compromise on keystone, where it is approved, and then 2 limited time subsidies are created for electric cars, and the other for nat. gas commercial vehicles.

    We already have large subsidies for electric vehicles, how do you envision these subsidies being different? If you expect the subsidies to get a significant portion of drivers to switch to EV's, how will these subsidies be funded? You've already earmarked the fuel taxes for road repairs.

    At the same time, raise federal road taxes on gas/diesel by .25/gal/ year for the next 4 years, and then convert it to a % of the price, with a minimum. Next, give the gas tax to the state in which it comes from, and the diesel tax is used by the federal DOT. Then work on our roads

    So add a dollar to the existing 55 cent fuel tax over 4 years, making fuel cost around $4.50 - $5.00 gallon.

    By doing this, we will see the tar sands hit global market, raising our local prices. BUT, with the above limited time subsidies, it will move our new vehicles over to none-oil, which will drop demand for gas rather quickly, and then will allow diesel and gas to be around 2/gal.

    So we'll pay more for fuel, but fuel will be cheaper? I'm not sure I follow that logic. Also, it's not clear how you'll pay for roads when the fuel tax goes away.

    You underestimate how long it would take to switch the USA over to EV's -- even if there was enough world-wide battery capacity to do it (there's not), there would be grid problems -- the grid wasn't designed for everyone to go home and plug in a 6000W charger for 6 hours every night. Smart chargers could help with that by letting the power company control chargers to distribute load, but they aren't here yet, and won't be ready on a large scale in 4 years. If everyone switched to Natural Gas vehicles, then the cost to generate electricity would rise since power companies have been taking advantage of cheap NG to generate electricity

    The easiest way to reduce demand is to just tax fuel - don't add $1 in taxes, add $5 in taxes phased in over 10 years. Once drivers are faced with paying $10/gallon, they'll look for fuel efficient commute alternatives themselves (which includes transit (which can be funded from the fuel tax), cycling and moving closer to work, so it will reduce congestion at the same time -- just putting everyone in an EV doesn't help with congestion). Of course, it's not that simple, since drivers know that such a tax would never happen, and they can just vote in someone that will continue to keep fuel cheap.

  • Re:Yes, but... (Score:2, Interesting)

    by operagost (62405) on Friday March 07, 2014 @01:19PM (#46428805) Homepage Journal
    Taxing things to change behavior does not work, because one thing government likes as much as power is MONEY. Once they have succeeded in reducing demand through taxes, the revenue will go down and they'll cry that some other tax (probably the income tax) will have to go up to make up the "shortfall".

While money doesn't buy love, it puts you in a great bargaining position.

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