Murkowski: Why no oil swaps with Mexico?

WASHINGTON, Oct. 23 (UPI) -- U.S. Sen. Lisa Murkowski, an advocate for repealing a 40-year-old ban on oil exports, said she wants to know why no oil is getting to Mexico under a swap deal.

The U.S. Commerce Department in August granted a request from Mexican energy company Petroleos Mexicanos, known also as Pemex, to swap as much as 100,000 barrels of U.S. crude oil per day for refining.

Legislation enacted in response to an oil embargo enforced in the 1970s by Arab members of the Organization of Petroleum Exporting Countries forbids the export of crude oil. The Commerce Department agreement requires Mexico to refine the crude oil at home and forbids re-export to other nations.

Similar agreements are in place for Canada. Sen. Murkowski, R-Alaska, sent a letter to Commerce Secretary Penny Pritzker asking whether or not such swaps have actually been approved for Mexico.

"There are indications that no such transactions may have actually been approved," Murkowski said.

Murkowski, chair of the Senate Energy Committee, and minority leader Sen. Heidi Heitkamp, D-N.D., called on the Commerce Department to approve the Pemex request in February. If no swaps have taken place, Murkowski said the federal government has missed an opportunity to bolster North American energy security.

Murkowski and Heitkamp said the August nod for oil swaps with Mexico was part of a process to ease the 1970s export ban. Despite what Murkowski described as a "flurry of legislative activity" aimed at repealing the ban, the White House has deferred action to the Commerce Department's Bureau of Bureau of Industry and Security.

BIS has approved the export of an ultra-light form of oil called condensate that's processed in a way that means it doesn't meet the federal classification for crude oil.

Advocates for a full repeal of the ban, like Murkowski, say it would spur North American economic stimulus while increasing U.S. leverage overseas. Opponents say many of the benefits are overstated, adding most overseas refineries aren't configured to process the types of oil found in the United States.