Markey, Menendez Lay Out Legal Case against Crude Oil Exports to President Obama

Ask President to continue to follow existing law and precedent, ignore exaggerated authority claims by export proponents

 

WASHINGTON (January 30, 2014) – As calls have grown to lift the decades-old ban on American crude oil exports, Senators Edward J. Markey (D-Mass.) and Robert Menendez (D-N.J.) today laid out the legal case against lifting the ban in a letter sent to President Barack Obama. In the letter, the Senators note that the 1975 law that established the ban does not give broad authority to the Commerce Department to independently allow for exports, contrary to what proponents have claimed, and that allowing crude oil exports would increase U.S. reliance on foreign oil.

 

The Senators also ask President Obama to resist the calls from the oil industry and others to reverse America’s crude export policy, citing economic and national security concerns. The American Petroleum Institute has made lifting the ban one of their top policy priorities, and several oil companies who stand to benefit from increased exports have come out in favor of sending America’s oil abroad. 

The letter notes that the United States is importing roughly the same percentage of oil from foreign sources today as in 1975, when the export ban was put in place in the wake of the devastating Arab oil embargo. The United States is currently importing more barrels of oil and petroleum products each day than in 1975 -- 6.4 million barrels of oil a day now compared with 5.8 million barrels per day in 1975. In terms of crude oil alone, the United States is importing nearly twice as much today as in 1975, 7.6 million barrels per day as compared to 4.1 million barrels per day in 1975. 

“Longstanding U.S. law requires that, with very few exceptions, domestically-produced crude oil cannot be exported,” write the Senators to the president. “Yet some have begun calling for a reversal of this policy. We urge you to support longstanding law and precedent and oppose efforts to roll back these important protections for consumers and our national security.” 

“Keeping these protections in place is critical to help shield consumers in Massachusetts, New Jersey and across the nation from price spikes at the pump,” write the Senators.

 

In the letter, which can be found HERE, the Senators make three major legal arguments:

 

--The Commerce Department does not have broad authority to authorize new categories of crude exports on its own. The Energy Policy and Conservation Act (EPCA), the 1975 law which established the ban, clearly does not permit Commerce to issue permits to export absent a Presidential determination that those exports are in America’s interest. 

--New crude exports would be inconsistent with current law and would increase reliance on imports. When EPCA was passed, it was Congress’ intent to prevent exports of American oil that would subsequently increase reliance on foreign oil imports. America’s foreign oil reliance remains at about one-third, roughly the same as it was in 1975 when EPCA became law.

--The claims of existing export authority have been greatly exaggerated. Proponents of sending America’s oil abroad have suggested that the Commerce Department has sufficient authority to lift the ban on its own, without a Presidential determination. A full reading of the regulations underpinning the ban show that the economic or technological exemption that has been pointed to could only be granted when exports are occurring as part of a swap or exchange of oil.

 

“Existing law regarding crude oil exports is very clear. And while we are rapidly reducing our reliance on foreign oil under your leadership, the job is not yet complete,” write the Senators. “We remain just as reliant on foreign sources of oil today as we were when Congress and President Ford acted in 1975 to ensure that the oil produced in America would stay in America. Now is not the time to reverse these policies that protect American consumers and America’s economic and national security. We urge you to reject calls to authorize any new categories of exports of U.S. crude oil absent Congressional action.”