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January 7, 2016

U.S. Lifts Ban on Crude Oil Exports!

The U.S. has officially lifted the 40-year-old ban on crude oil exports.  In response, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) posted a notice stating that an export license is no longer required to export crude oil.  Exports to embargoed or sanctioned countries/persons still require authorization.

The 2016 Consolidated Appropriations Act, a government funding bill signed into law on December 18, 2015, includes a provision that repeals the authority of the President to generally restrict exports of crude oil.  The legislation further prohibits any federal official from enforcing or imposing such a restriction.  However, the President may impose restrictions on crude oil exports (for a period of one year) if: (1) the President declares a national emergency; (2) the Secretary of Commerce, in consultation with the Secretary of Energy, determines that the export of crude oil has caused significant, sustained oil supply shortages or oil price increases, causing significant adverse employment effects; or (3) such restrictions are in the context of sanctions or trade restrictions imposed on particular countries, persons, or organizations for national security reasons.

Not only a huge win for domestic oil producers, the legislation also includes provisions intended to protect the environment and preserve natural resources, a gain for environmental advocates.