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BP Finds Way To Bypass US Crude Export Ban
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."
crude oil, lightly shaken, and exported to the world.
revenues, lightly tossed, and exported to Bermuda.
Both cases just avoiding the law through legal means. In other words, the law's an ass.
They're only breaking the spirit of the law, not the letter.
That makes it perfectly OK, just ask the NSA if you don't believe me.
No sig today...
Not BP's problem, and until we make it theirs, why should they bother?
BP hasn't been very British in quite a while, a better name might be "Standard Oil" given how many of the component companies it is made up of came from that particular operation. It gets called British whenever it's politically expedient.
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.
BP haven't been known as British Petroleum for many years. It seems to be a tag most used (now) by the US. [I wonder if there have been any recent events that might cause the folks in the US to think that US folks weren't involved? Better to point the finger elsewhere.]
They're only breaking the spirit of the law, not the letter.
True. They are 'getting around' the law against exporting crude, by not exporting crude. It seems the law needs to be amended to define better what is considered exportable if they want to stop this.
"For every expert, there is an equal and opposite expert"
the Finnish system of law
I'd be happy if they just enforced the American system of law. Does that mean no action in this case? Yes, until or unless the laws or changed. However, there are so many egregious violations of law by major corporations (*cough* Wall Street *cough*) that don't get investigated, let alone prosecuted, that I'd be thrilled if they enforced existing laws.
If the USians want to cast it in a bad light, they call it "British Petroleum". It makes it sound sinister and evil.
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.
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?
Gently reply
The number of slashdotters that bleat about "teh evil corporations that break teh law!"
But support bypassing copyright law and getting their content for free because "information must be free".
It may be the same thing, but it isn't necessary the same people. We aren't a borg collective who all think alike. Some people defend Free Software, which requires copyright law in order to exist. Some people download all the torrents. There may be a cross-section that does both, which is as you say hypocritical. But the existence of that cross-section does not invalidate the opinions of those who consistently hold one position or the other.
Also, not all laws are created equal. Some people may support political measures such as export controls and sanctions, while not supporting copyright. If you broke the speed limit last year, does that mean that you are not entitled to justice if someone assaults you today?
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.
In the US, the scenario you described would be called tax evasion and you would be charged by the IRS. Even in Finland, I am sure there are illegal ways to do things and legal ways to do things. Surely, every time you buy something from the store you aren't charged for larceny because it is illegal to steal and you circumvented that law!
Technically, what BP is doing is legal under the law. The correct solution, if the US doesn't like it, is to change the law.
In the UK it would be "tax avoidance" if it did not break any law. members of parliament would wring their hands and call "shame" - then do the same things themselves. -- ~~~~
The more you tighten your grip, the more will slip through your fingers.
I want to delete my account but Slashdot doesn't allow it.
The world runs on oil.
The world runs on long-chain hydrocarbons. They could come from the air, but instead the entrenched base of oil barons is making sure we keep burning every drop of oil:
I bet the retirement fund on every drop of oil being burned. So far I've been right. We'll see if I end up eating cat food - but I don't think that's likely...
I think it's more likely you'll end gasping, or perhaps wheezing before rattling.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
I think that the United States has a vested political interest in controlling the sale of oil. Which is not to suggest that you are wrong per se, but I think that the US oil policies are better understood in the context of hegemony than fair trade. However, the oil industry has been putting all of their propaganda efforts towards lifting this ban; I mark a half-dozen articles in Forbes alone within the last two years. As long as they can keep away from any concerns about national security, they might get their wish.
Those who advocate genocide deserve every protection afforded by law, and none afforded by common human decency.
What's appalling isn't that, but the ones who bleat about the evil corporations breaking the law when the evil corporations are NOT breaking the law.
"I do not agree with what you say, but I will defend to the death your right to say it"
>>...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?
Therefore the reason for a market - that higher prices provide an incentive to produce more of something - doesn't apply in the long run. The petroleum under the ground in the US is a national resource.
What of the air in the atmosphere? Is that not an international resource? Should we not have a market for use of what the atmosphere will bear, perhaps to preserve CO2 (and particulates, and VOCs, etc) at pre-industrial-revolution levels? We now literally have cars whose exhaust is cleaner than their intake in "polluted" cities, where the value of "polluted" is vastly exceeded by some cities. I'd be looking at Beijing if I could see it.
Economics is all well and good if you don't get to ignore externalities. Perhaps we institute a system of eco-economics (see: Mars trilogy) before we find ourselves unacceptably mired in debt to physics.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Well - sort-of.
http://www.hmrc.gov.uk/avoidan...
There are problems with this sort of approach - implementing 'anti-abuse' rules means that now instead of (in principle) understandable legislation - you have a collection of people all of which may take a slightly different approach to decision-making.
The other issue is that it's not practically going to impact (for example) Amazon - or any of the other major tax avoiders - as they are able to use international financial structuring to avoid national tax, in a way that these rules do not impact.
It always amused me that some people thought more domestic drilling would return us to the days of cheap fuel. They seemed to think that the oil companies would ignore that they could get a higher price overseas and sell to us cheap out of the goodness of their hearts.
Best possible answer:
Let them finish their mini-refinery. Let them ramp up production. Let them sign hundreds of contracts obliging them to deliver on partially-refined product.
Then, and only then, really fuck 'em by ban the export of insufficiently-refined product.
I have gotten so sick of companies dodging the intent of the law lately. I by no stretch of the imagination count as a hardcore law-and-order authoritarian, but it doesn't take Mother Jones to point out that we simply can't allow situations like this, or the whole Apple/IBM/Google/etc paying no US tax, and so on, to continue. If a company wants to play on our field, they need to follow our rules as intended.
"Well whatd'ya know, the rules of golf don't explicitly ban using a tunnel-boring machine to dig a straight shot to the cup! You sure got us, have fun turning Augusta into a strip-mine."
They're only breaking the spirit of the law, not the letter.
True. They are 'getting around' the law against exporting crude, by not exporting crude. It seems the law needs to be amended to define better what is considered exportable if they want to stop this.
Perhaps they should get rid of the ban altogether? Seriously, with the trade deficit spiraling out of control, it makes no sense at all to ban exports.
Rather than question BP for 'getting around' the law, we should question why we have such bad law in the first place.
If you REALLY want to see the price of gas lowered, there is a simple way to do this. .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
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.
At the same time, raise federal road taxes on gas/diesel by
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.
I prefer the "u" in honour as it seems to be missing these days.
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.
The easiest way to reduce demand is to just tax fuel
Sorry no, there is no easy way to reduce demand of OIL. If you want to truly reduce demand of OIL you need to find a VIABLE alternative fuel, electricity and NG are not VIABLE alternative fuels
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".
Gamingmuseum.com: Give your 3D accelerator a rest.
Of course there is. Just to do a completely extreme example: If gas was taxed so it got priced at $1000/gallon, people would hardly drive at all.
Now, that's not realistic due to the dependence on oil for society to work; but an incremental increase will lead to lower demand. If $10 won't get enough of a decrease in demand, $20 or $50 would certainly have an impact. ($10 wouldn't really impact my use - gas isn't a significant cost for me - but $50 would hit me enough that I would probably drop road trips, or at the very least be really careful about how I structured them.)
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".
But if the behavior is changed so much that other taxes are needed to make up the shortfall, then it sounds like it worked.
Taxes should only be used to fund the constitutionally mandated functions of govt (especially the Feds).
Government is NOT supposed to be there to try to define or guide my behaviors.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
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).
I love that argument. Nirvana can come if we just raise taxes enough! We'll all bike to work on green parkways serenaded by bluebirds. If we just raise taxes enough.
Of course, costs for food and everything else we don't make at home from stuff we already have at home, will skyrocket, but hey, who cares? We'll all just ride public transit funded by high taxes that no one can afford, that being the point of raising the cost of gas in the first place. You know, to make people stop using gas? How will that work exactly?
Peace is easy to achieve, just surrender. Liberty is much harder get/keep.
There is nothing that can replace oil on the menu except nuclear technologies
At best, you are underinformed. Or, you are lying. Which is it?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"