In the mid-1970s, the United States placed firm controls on exporting crude oil, effectively banning such action. Section 754 of Bureau of Industry and Security’s (BIS’) Export Administration Regulations (EAR) states that a BIS license — which is only authorized in unique circumstances — is required to export crude. That ban has remained since. However, BIS has changed its views on crude over the last couple of years, classifying some condensate acceptable for export.

BIS quietly issued a “Commodity Classification Decision” stating it was acceptable for Peaker Energy to export condensate, a lighter hydrocarbon liquid (based on API gravity) that is often a byproduct of gas and oil extraction, in September 2013. This was followed by two more such decisions for Pioneer Natural Resources and Enterprise Products Partners in early 2014. By June, news about the decisions went public, and the U.S. Energy Information Administration (EIA) then began tracking condensate exports as “kerosene and light gas oils” in September 2014 for its Petroleum Supply Monthly report. In late December 2014, BIS addressed a series of frequently asked questions concerning oil and condensate exports, which were later clarified (PDF) by the Independent Petroleum Association of America.

Since then, responses across the industry have varied. Companies like NuStar Energy have already invested in storage and export infrastructure designed to keep export-ready condensate separate from non-exportable crude oil in busy port and dock areas in Texas. While some companies are seeking export approval from the government, others like NuStar are staying out of the approval process and acting as intermediaries. Meanwhile, other companies like Delta Air Lines and its subsidiary Monroe Energy are challenging BIS’ Commodity Classification Decisions on condensate, stating they violate “longstanding trade laws that block most raw U.S. crude from being sold overseas.” It’s not clear, however, if such protests will have much impact, especially in the face of a major crunch on domestic crude storage space.