Feds give quiet approval to light oil exports

The federal government has started to suggest companies that want to export a lightly processed form of crude oil should try going ahead without express permission.

The Commerce Department's Bureau of Industry and Security recently said that a process known as “self-classification” could allow oil exports, opening the door slightly on the decades-long ban on crude exports, Reuters reported Tuesday.

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Under self-classification, a company would declare that its oil condensate — a lightly processed oil — is refined enough to not be subject to the ban. Self-classification is a fairly routine practice in export policy.

Commerce’s communications were “carefully couched as an informal suggestion,” and do not represent a change in policy, Reuters said, citing sources familiar with the matter.

The news follows more formal decisions earlier this year by the Commerce Department to allow Enterprise Product Partners and Pioneer Natural Resources to export condensate. Both were private rulings that were not revealed for months.

BHP Billiton last month became the first company to announce that it would export condensate without formal permission, saying it was confident that the rulings earlier this year gave it a firm legal footing.

The various actions from feds come as policymakers are increasingly discussing whether to lift the ban on exporting crude oil.

The surge in recent years in domestic oil production has spurred some companies to seek new markets for their products, but they are encountering pushback from refiners, some Democrats and others concerned the change could increase prices in the United States.