Some members of Congress are trying to prevent oil that would go through the proposed Keystone pipeline from being exported:
Rep. Ed Markey (D-Mass.) and other House Democrats called the bluff of Keystone XL pipeline supporters by introducing a bill that would ensure that the oil and refined fuel from the Canadian conduit is actually sold in the United States. The bill comes as Republicans on the House Energy and Commerce Committee make a push to force the approval of the pipeline, despite concerns about the pollution, price and the ultimate destination of the Canadian crude.
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Rep. Markey’s bill addresses head-on the claims by Keystone supporters, who have asserted that the project is in the national security interests of the United States, and will reduce U.S. dependence on Middle Eastern oil. The reality is that TransCanada, the company behind the pipeline, has entered into long-term contracts with refineries to export the fuel to Latin America, Europe and other markets.
The text of the bill reads as follows:
To ensure that oil transported through the Keystone XL pipeline is used to reduce United States dependence on Middle Eastern oil.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. ENERGY SECURITY.
The Secretary of Energy shall ensure that any crude oil and bitumen transported by the Keystone XL pipeline, and all refined petroleum products whose origin was via importation of crude oil or bitumen by the Keystone XL pipeline, will be entered into domestic commerce for final disposition. The President may provide for waivers of such requirement in the following situations:
(1) Where the President determines that such a waiver is in the national interest because it--
(A) will not lead to an increase in domestic consumption of crude oil or refined petroleum products obtained from countries hostile to United States interests or with political and economic instability that compromises energy supply security;
(B) will not lead to higher costs to refiners who purchase the crude oil than such refiners would have to pay for crude oil in the absence of such a waiver; and
(C) will not lead to higher gasoline costs to consumers than consumers would have to pay in the absence of such a waiver.
(2) Where an exchange of crude oil or refined product provides for no net loss of crude oil or refined product consumed domestically.
(3) Where a waiver is necessary under the Constitution, a law, or an international agreement.
At first glance, I would say that this measure likely constitutes an export restriction under GATT Article XI:1, and may also violate GATT Article V (freedom of transit). However, let me qualify this by saying I'm not completely sure how the pipeline process works, and there may be some aspects that complicate the analysis.
Assuming there is a violation, I'm not sure there are really any good defenses. There are arguments to be made, but they seem like a stretch.
The last part is interesting, though: The President "may provide for waivers ... Where a waiver is necessary under the Constitution, a law, or an international agreement." So if this bill became law (which it probably will not), perhaps the President could simply waive the export restrictions under the measure on the theory that they violate the GATT?
