INFORMATION PAPER
Document Type:
Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP87T00759R000200210017-5
Release Decision:
RIFPUB
Original Classification:
K
Document Page Count:
2
Document Creation Date:
December 22, 2016
Document Release Date:
April 30, 2010
Sequence Number:
17
Case Number:
Content Type:
MISC
File:
Attachment | Size |
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CIA-RDP87T00759R000200210017-5.pdf | 151.58 KB |
Body:
Approved For Release 2010/04/30: CIA-RDP87T00759R000200210017-5 IT A
0 INFORMATION PAPER ?
1. Information Requested: Legal Analysis of Crude Oil and
[ Refined Product Export Authorities
2. Background:. Should cover pre-emergency and emergency
situations, and the treatment of SPR oil.
C
3. Limitations:' Presents only basic legal principles.
4. Presentation: A number of different laws govern crude and
product exports, imposing restrictions which differ from one
category of petroleum to another. There is ample authority
to curtail exports during an emergency, under the Export
Administration Act of.1979 (EAA), ?103(a) of the Energy
Policy and Conservation Act (EPCA), or other authorities, if
a policy decision were made to do so. Also, ?7(d)(3) of the
EAA provides authority to waive all export restrictions for
purposes of meeting the U.S.' IEP obligations or fulfilling
the U.S.-Israeli supply-agreement. But the legal regime
governing other petroleum exports is more complicated.
There is no'waiver provision for SPR crude oil as such; it
is necessary to determine what laws apply to particular SPR
oil which may be proposed for export.
"Short supply controls" under ?7(a) of the EAA apply to all
crude or product exports,,and the Commerce Department's
implementing regulations at 15 C.F.R. Part 377-require
petroleum exporters to obtain validated licenses. These
regulations also implement EPCA S103(b), which mandates a
rule prohibiting crude oil exports unless they are deter-
mined to be in the national interest and consistent with the
purposes of EPCA. Validated licenses now are routinely
granted for product exports (except product refined from
Naval Petroleum Reserves crude, export of which is statutor-
, lyf precluded) , a;though by Javj aclications to export more
than 2f0#000 bpd of .product to jan.W single destination in the
,gaze # .scalesyear are subject-;tqLa, 30 day processing delay
chile -Congress is notified. rIrke '%short supply" criteria for
-4ssuing validated licenses to export crude oil differ de-
pending on the category of oil involved and on whether
4dditiional statutory restrictions-apply to that category.
Jf no_other-statutory restrictions are applicable to oil
which is proposed to be exported, exports may be allowed:
(1) temporarily, through Canada or Mexico; (2) in equal
swaps with persons in Canada or Mexico; (3) in other equal
swaps which reduce consumer prices, can be terminated in an
emergency, are necessary because the export crude "cannot
reastnably" be processed domestically, and are beneficial
because the import crude otherwise wouldn't be imported;
Approved For Release 2010/04/30: CIA-RDP87T00759R000200210017-5
Another restrictive provision is ?28(u) of the Mineral Lands
Leasing Act, which, with limited exceptions, forbids the
export of crude transported by pipeline over rights-of-way
granted under ?28, unless the President publishes his finding
that, inter alia, the exports "will not diminish the total
quantity or quality of-petroleum available"'to the U.S. In
addition, the export. of crude from the Naval Petroleum
Reserves and from the OCS is subject to additional findings
imposed, respectively, by the NPR Production Act of 1976 and
the OCS Lands Act; the latter act contains a waiver of EAA
restrictions for OCS oil "exchanged or exported pursuant to
an existing international agreemept."
The SPR contains. imported, ANS, NPR and some other domestic
oils (none of the SPR oil is known to have traversed a
?28(u) right-of-way). Oils which fall into these different
categories sometimes are commingled, and may become even
more commingled during the withdrawal and distribution
process. The SPR's contractual procedures are designed to
sell oil quickly and assure its timely lifting. A bidder
for SPR oil must post a bid bond, and each contractor will
be liable for liquidated damages, backed up by a performance
guarantee, if he fails to lift the oil at the contractually
agreed time; thus, a bidder who wishes to export the oil
will need to know, before he bids, whether export of the oil
he is bidding for will be permitted. DOE and Commerce
therefore are discussing preparations to implement alterna-
tive policy decisions concerning the export of SPR oil
during a drawdown.
Approved For Release 2010/04/30: CIA-RDP87T00759R000200210017-5
Approved For Release 2010/04/30: CIA-RDP87T00759R000200210017-5
? ?
or (4) in swaps for refined product equal to what could be
refined from the export crude domestically, if that crude
for compelling economic or technical reasons "cannot
reasonably" be processed in the U.S., and if the product
imports will be as low priced as they would have been had
the crude been processed at the nearest capable U.S,
refinery.
Additional restrictions are imposed on other categories of
crude under different statutes. The most stringent limita-
tions are those with respect to Alaskan oil in EAA ?7(d), as
amended by the Trans-Alaska Pipeline Authorization Act.
These effectively forbid the export of ANS oil unless an
extremely difficult finding is made. Moreover, export is
further conditioned upon passage of a concurrent resolution
of Congress, a requirement which clearly is unconstitutional,
but which possibly could be held not to be severable from
the finding which would permit export, in which case the
latter also would be invalid.