Exports of Certain California Crude Oil

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Part 777

[Docket No. 930653-3153]

RIN 0694-AA70

Exports of Certain California Crude Oil

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Proposed rule with a request for comments.

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SUMMARY: The Bureau of Export Administration (BXA) is proposing to

amend the short supply provisions of the Export Administration

Regulations (EAR) by revising the restrictions on exports to initially

allow the export of up to 25,000 barrels per day of California heavy

crude oil having a gravity of 20 degrees API or lower. The changes

proposed by this rule are based on the President's October 22, 1992,

memorandum to the Secretary of Commerce to modify existing restrictions

on the export of certain California heavy crude oil. This notice

delineates the actions the Department is taking to implement the

President's decision. It also proposes specific regulatory changes

implementing those actions and solicits public comments.

DATES: Comments must be received by April 25, 1994.

ADDRESSES: Written comments (six copies) should be sent to Bernard

Kritzer, Senior Industry Analyst, Office of Foreign Availability, room

1087, U.S. Department of Commerce, 14th Street and Pennsylvania Avenue

NW., Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT: Bernard Kritzer, Office of Foreign

Availability (OFA), Bureau of Export Administration, Telephone: (202)

482-0074.

SUPPLEMENTARY INFORMATION:

Background

Section 777.6(d)(1) of the Export Administration Regulations (EAR)

restricts exports of crude petroleum, including reconstituted crude

petroleum, tar sands and crude shale oil. This rule proposes to amend

Sec. 777.6(d)(1) to permit exports of certain California crude oil

pursuant to a Presidential Memorandum of October 22, 1992,\1\ in which

the President determined that exports of California heavy crude oil

having a gravity of 20 degrees API or lower were in the national

interest. Before the President authorized this export of crude oil, he

made findings and determinations under three statutes: Section 103 of

the Energy Policy and Conservation Act (42 U.S.C. 6212(b)); section

28(u) of the Mineral Leasing Act, as amended by the Trans-Alaska

Pipeline Authorization Act of 1973 (30 U.S.C. 185(u)); and provisions

of the Export Administration Act, as amended, and to the extent

consistent with law, continued in effect through the President's

invocation of the International Emergency Economic Powers Act. The

Export Administration Act was continued on March 27, 1993, by Public

Law 103-10. The President made findings that exports of California

heavy crude oil having a gravity of 20 degrees API or lower: (1) Were

in accord with the provisions of the Export Administration Act of 1979,

as amended;

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\1\ The President's memorandum of October 22, 1992, ``Exports of

Domestically Produced Heavy Crude Oil'' (3 CFR, 1992 Comp., p. 382).

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(2) Were consistent with the purposes of the Energy Policy and

Conservation Act; and

(3) Would not diminish the total quality or quantity of petroleum

available to the United States.

Based upon the above findings, the President authorized the

Secretary of Commerce to modify the existing restrictions on the export

of crude oil produced in the lower 48 states to initially allow the

export of an average quantity of 25,000 barrels per day (MB/D) of

California heavy crude oil having a gravity of 20 degrees API or lower.

The President also directed the Secretary of Energy, in

consultation with the Secretaries of Commerce, the Interior,

Transportation, and other interested agencies, to conduct periodic

reviews of such exports in light of then-existing market circumstances.

Based upon the results of these market reviews, the President

authorized the Secretary of Energy to recommend to the Secretary of

Commerce that adjustments be made in the quantity of California heavy

crude oil that may be authorized for export (i.e., adjustments to the

initial average authorized level of 25 MB/D).

Department of Commerce Actions

The Department proposes to take the following actions to implement

the President's decision: (1) Propose rules to implement the

President's decision;

(2) Solicit public comments on the rules; and

(3) Publish a final rule implementing the President's findings and

taking into account public comments on this proposed rule and other

relevant evidence.

The Department of Commerce's Proposals

This notice proposes to amend Sec. 777.6 of the Export

Administration Regulations (EAR) to allow the licensing of exports of

up to 25 MB/D per day of California heavy crude oil having a gravity of

20 degrees API or lower.

To implement this program, the Department proposes to: (1) Grant

licenses for these exports on a first-come-first-served basis; (2)

authorize the export of up to 25 percent (2.28 million barrels) of the

annual authorized volume (9.125 million barrels) of such California

crude oil per license; (3) approve only one application per company,

including its affiliates, as long as there are other outstanding non-

affiliate company applications in that month; (4) allow the licensee up

to 90 days from the issuance of the license to export the oil; (5)

require the licensee to certify to the Department in writing that the

export(s) occurred during the 90-day license term; (6) carry forward

any portion of the 25 MB/D quota that the Department has not licensed,

except that the Department will not carry forward unlicensed portions

more than 30 days into a new calendar year; (7) return to the available

quota volume all licensed volumes not shipped during the 90-day term of

an export license, except that the Department will not carry forward

unshipped portions more than 30 days into the new calendar year; and

(8) allow a 10 percent shipping tolerance on the licensed, but not

shipped volume of barrels and a 25 percent shipping tolerance on the

total dollar value of the license, respectively.

The Department proposes to require that a prospective exporter: (1)

Submit an application on BXA Form 622-P; (2) state the total number of

barrels for export during the 90-day license term not a per day rate;

(3) include supporting documents proving that the applicant has: (i)

Title to the quantity of barrels stated in the application, or an

accepted order for the purchase of the quantity of barrels stated in

the application, (ii) a verifiable contract of sale to export the crude

oil contingent on the applicant obtaining an export license, (iii)

documentation proving that the crude oil to be exported has a gravity

of 20 degrees API or lower, (iv) documentation proving that the crude

oil was derived from production within the state of California,

including its state submerged lands, (v) documentation certifying that

the crude oil was not produced or derived from a U.S. Naval Petroleum

Reserve, and (vi) documentation certifying that the crude oil was not

produced from the submerged lands of the U.S. Outer Continental Shelf;

and (4) export the licensed volumes within 90 days of the issuance of

the license and to report the export to the Department of Commerce. In

addition, the Department will allow the applicant to combine licensed

quantities into one or more shipments, provided that the validity

period of none of the affected licenses has expired. As set forth in

the EAR, the applicant cannot transfer a license to another person.

An applicant can file for a license at any time during the calendar

year. The Department, however, will process only one license per

applicant per month as long as there are other non-affiliated

applications pending during that month. The Department will issue

validated licenses expeditiously as long as there are sufficient

quantities of the authorized heavy crude oil volumes available. If

there is no available volume of heavy crude oil, the Department will

return the application without action. If the volume of heavy crude oil

available for export is less than the applicant requested, the

Department will contact the applicant and determine if the applicant

wants the available volume. If not, the Department will return the

application without action. If the applicant wants the available

volume, the Department will request that the applicant amend its

application to reflect the lesser volume.

The Department will apply the procedures eventually adopted in

response to this proposed rulemaking with additional notice and comment

to any future increase in the export volume that the Secretary of

Energy may from time to time recommend to the Department of Commerce.

Nature of the Export Market

In developing an approach to implementing the President's decision,

the Department is taking into account the nature of the heavy crude oil

export market. The Department's 1989 ``Report to the Congress on U.S.

Crude Oil Exports,'' (pp. IV-4-IV-11) concluded that opportunities to

export California heavy crude generally consist of spot market rather

than year-round export activity. The report found that opportunities to

export California heavy crude oil occur intermittently and randomly

throughout the year when the price of these oils are low and the price

of Pacific Rim substitutes are high. The Department's recent experience

monitoring licensed export volumes strongly supports this position. The

Department recognized the need, therefore, to develop licensing

procedures permitting firms to take advantage of brief windows of

opportunity and to conduct spot market export transactions.

The 1989 Commerce Report also identified numerous potential

participants in such a market with a wide range of economic strengths

and capabilities. The study found that allowing limited exports of

California heavy crude oil would enable some firms (e.g., the

independent producers) to expand their crude oil marketing

opportunities, to maintain their existing oil production, and to earn

additional revenue to reinvest in exploring for new domestic oil

reserves.

The Department also recognized that having only one applicant could

reduce the effectiveness of the export program. For example, an

exporter could, in a licensing program without time limits, apply for

and obtain an export license for the entire 25 MB/D per day for a one

year period. If, however, the firm did not export the oil because of

some problem with the transaction, the license would never be used.

This would limit the number of potential exporters, deny commercial

opportunities to other participants, and frustrate the intent of the

President's export initiative. This concern argued for limiting the

term of an export license to insure that the licensee used the license

and exported the oil, or that the volume of oil quickly became

available to other interested applicants.

There was also a need to assure that licenses issued to exporters

would be in commercially viable volumes since the total volume

initially authorized for export is low--9.125 million barrels annually.

It would be difficult to achieve economically viable shipments if the

Department were to issue numerous licenses for small volumes (e.g.,

100,000 barrels).

Departmental Considerations

Given the noted market dynamics and commercial consideration, the

Department considers it necessary to develop a licensing regime that:

(1) Is equitable; (2) minimizes government involvement in commercial

transactions; (3) makes licenses available to a wide number of

participants; (4) reviews license applications expeditiously to allow

firms to take advantage of time-sensitive spot market trading

opportunities; (5) prevents a firm from obtaining a license and not

exporting the oil; (6) allows for economically viable export cargoes;

and (7) does not impose unnecessary administrative burdens on

exporters.

Although the Department proposes to implement the option of first-

come-first-served, the Department will consider and may adopt any of

the options in this rulemaking, or an alternative proposal that

addresses the above considerations. In fact, the Department did

consider several different options; they are discussed below. The

Department is soliciting comments from interested parties on the most

effective approach for the Department to implement the President's

decision.

Option #1--First-Come-First-Served

Under this option, the Department would grant licenses for the

export of California heavy crude oil on a first-come-first-served

basis. This option involves the minimum government management of an

export licensing regime and intervention in the market. There are

numerous variations to this option which involve the number of times

per year that the Department would review and authorize export

licenses. The Department could grant the licenses annually, quarterly

or monthly on a first-come-first-served basis. There are also numerous

variations on the volume of oil the Department could authorize per

license. Under one variation the Department could license the entire

export volume (9.125 million barrels) to the first firm that filed an

export license application.

Although licensing the entire volume at one time would achieve the

Department's objective of minimizing the government's role in export

transactions, it may result in limiting this export opportunity to the

first firm that filed a license application. The Department, however,

wants to ensure that the potential benefits of the program are diffused

among many firms and utilized. This option, therefore, calls for

limiting the quantity per license (i.e., 25 percent of the total

authorized volume) and for each license to have a 90 day limit. In

addition, a company and its affiliates can receive only one license per

month as long as there are other outstanding applications.

The Department considers this option to be the best means available

to provide a number of opportunities (at least four) for a number of

firms to participate in heavy crude oil exports with a minimum of

government interference in the export transaction. The Department also

considers that the 90 day license term would assure the utilization of

the license or the rapid return of the volume of oil to the quota so

others may use it.

On the negative side, a single company could request and receive

for four months in a row a license covering 25 percent of the

authorized volume of oil just by being the earliest applicant to file

with the Department. In addition, this option would require the

Department to keep running accounts on the amount available for

licensing at any one time. The Department, however, should be able to

handle this because the authorized export volumes are small and the

exports are likely to occur intermittently rather than year round.

Option #2--Prorationing

Prorationing procedures, such as the one the Department uses for

the Alaskan North Slope/Canada (ANS/Canada) crude oil export regime,

offer some advantages but also involve a greater measure of government

involvement than does licensing on a first-come-first-served basis.

On the positive side, this option may ensure that more firms could

participate in the export program than would be the case under

licensing option #1. This option also would assure everyone who applies

would get some portion of the authorized export volume.

On the negative side, this option would entail active government

involvement in administering an export prorationing regime on a year

round basis. In addition, a prorationing scheme could be difficult to

administer and could result in economically not viable volumes. The

volume of California heavy crude oil exports (25 MB/D) allowed under

the President's October 22, 1992 decision amounts to one-half of the

volume authorized for the ANS/Canada export regime (50 MB/D). Over the

past four years the demand for ANS exports to Western Canada has not

forced the Department to prorate exports among competing applications.

This may not be the case in the California situation where the volume

is much smaller and more firms have expressed an interest in

participating in this program. Although several licensees with small

volumes could possibly combine volumes to make one shipment, it would

not help exporters that had contracts to deliver large volumes.

Option #3--Pre-Qualification With Export Nominations

This option would result in a greater degree of government

management than would be the case under any of the other options

described above because it would involve a two step review process of

all export licensing transactions.

Under this procedure, potential exporters would provide enough

information to allow the Department to pre-qualify a firm as an

exporter and subsequently grant final export authorization to the firm

upon the provision of satisfactory information regarding end-users and

intermediate consignees, if any.

The first step would involve the Department pre-qualifying

exporters based upon the following criteria: (1) The firm is a

commercial entity that is interested in exporting California heavy

crude oil; (2) the applicant can demonstrate that an end-user is

interested in purchasing oil from them as evidenced by a letter/telex.

The nominations process--step 2--would operate as follows:

1. On a monthly basis, a pre-qualified exporter would nominate the

quantity it would like to export during the month.

2. A pre-qualified exporter would have to submit his nomination no

later than 10 calendar days before the first day of the month.

3. At the outset of each month, the Department would notify pre-

qualified exporters of how much oil was available for export pursuant

to the quota for the month. (It could provide notice by having firms

telephone a special number and/or talk with a licensing officer.)

4. When nominating export volumes, the licensee would be required

to provide the Department with documentation establishing: (a) Title to

the oil or a contract to purchase the oil subject to approval of the

export transaction; (b) a contract or contingent contract to export the

oil subject to approval of the export transaction. The Department would

also have to approve the intermediate and ultimate foreign consignees

for the oil, and;

5. The licensee would have 30 days to complete the export. If the

export did not occur during the 30 day license term, the Department

would return the volume to the quota. If the licensee shipped part of

the volume, the Department would return unshipped volumes to the quota.

Other key provisions include:

1. The Department would allow the export of up to a total of

2,281,000 barrels during any 30 day period.

2. The Department would limit individual company exports to

1,000,000 barrels of oil during any 30 day period.

3. The Department would process only one nomination per firm per 30

day period as long as there are outstanding nominations from non-

affiliated firms.

The Department would implement the following provision in the event

the volume of crude oil nominated for export exceeds the amount allowed

during a 30 day period: 1. It would allocate to each applicant an equal

share of the authorized volume. For example, if five licensees

nominated a total over the authorized volume of exports, the Department

would allocate each party 20 percent of the volume available for export

(i.e., 456,000 barrels out the total of 2,281,000 barrels available),

and

2. Licensees would be allowed to combine volumes to achieve

economic-sized cargoes.

On the positive side, this option would be responsive to the spot-

market nature of the market. The pre-qualifying process may ensure that

many firms had the opportunity to participate in the export program.

On the negative side, the Department considers the two-step review

process unnecessarily bureaucratic. This approach would require the

Department to actively manage licenses and keep running accounts on the

amounts available for licensing at any one time. In addition, exporters

would have to contact the Department on an ongoing basis to determine

what volume was available for export during a given month. Exporters

would have to constantly report on whether they conducted exports and

whether they exceeded their authorized export level. The Department

would also have to establish a procedure to screen and pre-qualify new

entrants on a continuous basis to ensure that they would receive an

opportunity to participate in the export program.

The Department invites written comments from interested parties

that may assist it in implementing the President's decision.

Specifically, we solicit information concerning the following:

(1) What are the pros and cons of each of the licensing options

presented, and which, if any, do you prefer?

(2) Are there other licensing approaches that would better allow

U.S. exporters to take advantage of this opportunity? If you have a

specific licensing scheme in mind, please explain it, discuss the pros

and cons of the selected option, and explain how the Department should

implement your approach.

(2) Should the Department review export license applications

monthly, or more or less frequently (e.g., quarterly, semiannually,

annually, continuously)? Are exports of up to 2.28 million barrels per

license sufficient to make licenses available to more than one company

while retaining the commercial viability of the exports? If not, what

is the optimal cargo size (barrels) for economically viable export

shipments?

(3) Should an exporter have more or less than a 90-day license to

export California crude oil in a spot market trading environment? What

would be the optimal time to allow an exporter to pursue business

activities while not denying opportunities to other exporters?

(4) Should the Department carry over export volumes not shipped in

one calendar year to the next year? What is the optimal time that the

Department should carry over volumes not shipped during one calendar

year?

(5) Are there any specific heavy crudes, with particular assay

properties, that the Department should exclude from licensing? Comments

in this area should indicate the specific source and type of crude, its

full assay, the unique nature of the assay, the availability of

substitutes and the special user.

Comment Procedures

The Department is issuing this rule in proposed form and will

consider public comments in the development of the final regulations.

The Department encourages interested persons who wish to comment to do

so at the earliest possible time to permit the fullest consideration of

their views.

The following procedures will apply to any comments submitted

pursuant to this procedure: (1) Interested parties are invited to

submit written comments (6 copies), opinions, data, information, or

advice with respect to this notice to the address above by the dates

specified above;

(2) The Department will consider all comments received before the

close of the comment period in developing final regulations. While

comments received after the end of the comment period will be

considered if possible, this cannot be assured;

(3) All public comments on these regulations will be a matter of

public record and will be available for public inspection and copying.

(Communications from agencies of the United States Government or

foreign governments will not be made available for public inspection.);

(4) In the interest of accuracy and completeness, the Department

requires comments in written form. Oral comments must be followed by

written memoranda which will also be a matter of public record and will

be available for public review and copying;

(5) The Department will not accept public comments accompanied by a

request that a part or all of the material be treated confidentially

because of its business proprietary nature or for any other reason. The

Department will return such comments and materials to the person

submitting the comments and will not consider them in the development

of final regulations; and

(6) The comments received in response to this notice will be

maintained in the Bureau of Export Administration Freedom of

Information Records Inspection Facility, room 4525, Department of

Commerce, 14th Street and Pennsylvania Avenue, NW., Washington, DC

20230. Interested parties may inspect and copy records in this

facility, including written public comments and memoranda summarizing

the substance of oral communications, in accordance with regulations

published in part 4 of title 15 of the Code of Federal Regulations.

Information about the inspection and copying of records at the facility

may be obtained from Margaret Cornejo, Bureau of Export Administration

Freedom of Information Officer, at the above address or by calling

(202) 482-5653.

Rulemaking Requirements

1. This proposed rule contains collections of information subject

to the requirements of the Paperwork Reduction Act of 1980 (44 U.S.C.

3501 et seq.) The public reporting burden for this collection of

information is estimated to average 12 hours per response, including

the time required for reviewing instructions, searching and maintaining

the necessary data, and completing and reviewing the collection of

information. Send comments regarding this burden to: Bernard Kritzer,

Senior Industry Analyst, Office of Foreign Availability, room 1087,

U.S. Department of Commerce, 14th Street and Pennsylvania Avenue, NW.,

Washington, D.C., 20230; and to the Office of Information and

Regulatory Affairs, Office of Management and Budget, Washington, DC

20503. Project No. 0694-AA70.

2. Because a notice of proposed rulemaking and an opportunity for

public comment are not required to be given for this rule by section

553 of the Administrative Procedure Act (5 U.S.C. 553) or by any other

law, under section 3(a) of the Regulatory Flexibility Act (5 U.S.C.

603(a) and 604(a)) no initial or final Regulatory Flexibility Analysis

has to be or will be prepared.

3. This proposed rule does not contain policies with Federalism

implications sufficient to warrant preparation of a Federalism

assessment under Executive Order 12612.

4. This rule was not subject to review by the Office of Management

and Budget under Executive Order 12866.

List of Subjects in 15 CFR Part 777

Administrative practice and procedure, Exports, Forest and forest

products, Petroleum, Reporting and recordkeeping requirements.

Accordingly, part 777 of the Export Administration Regulations (15

CFR parts 730-799) is proposed to be amended as follows:

1. The authority citation for 15 CFR part 777 continues to read as

follows:

Authority: Pub. 90-351, 82 Stat. 197 (18 U.S.C. 2510 et seq.),

as amended; sec. 101, Pub. L. 93-153, 87 Stat. 576 (30 U.S.C. 185),

as amended; sec. 103, Pub. L. 94-163, 89 Stat. 877 (42 U.S.C. 6212),

as amended; secs. 201 and 201(11)(e), Pub. L. 94-258, 90 Stat. 309

(10 U.S.C. 7420 and 7430(e)), as amended; Pub. L. 95-223, 91 Stat

1626 (50 U.S.C. 1701 et seq.); Pub. L. 95-242, 92 Stat. 120 (22

U.S.C. 3201 et seq. and 42 U.S.C. 2139a); sec. 208, Pub. L. 95-372,

92 Stat. 668 (43 U.S.C. 1354); Pub. L. 96-72, 93 Stat. 503 (50

U.S.C. App. 2401 et seq.), as amended; E.O. 11912 of April 13, 1976

(41 FR 15825, April 15, 1976); E.O. 12002 of July 7, 1977 (42 FR

35623, July 7, 1977), as amended; E.O. 12058 of May 11, 1978 (43 FR

20947, May 16, 1978); E.O. 12214 of May 2, 1980 (45 FR 29783, May 6,

1980); E.O.12730 of September 30, 1990 (55 FR 40373, October 2,

1990), as continued by Notice of September 25, 1992 (57 FR 44649,

September 28, 1992); and E.O. 12735 of November 16, 1990 (55 FR

48587, November 20, 1990), as continued by Notice of November 14,

1991 (56 FR 58171, November 15, 1991).

PART 777--[AMENDED]

3. Section 777.6 is amended by adding a new paragraph (d)(1)(xii)

and a new paragraph (k) to read as follows:

Sec. 777.6 Petroleum and petroleum products.

* * * * *

(d) * * *

(1) * * *

(xii) Exports of certain California crude oil. California heavy

crude oil can be exported under the following conditions: (A) The

commodity has a gravity of 20 degrees API or lower;

(B) The commodity is produced in the state of California, including

its submerged state lands;

(C) The applicant certifies by affidavit that: (1) The commodity is

not produced or derived from a U.S. Naval Petroleum Reserve;

(2) The commodity is not produced from the submerged lands of the

U.S. Outer Continental Shelf; and

(3) All aspects of the transaction comply with the provisions of

paragraph (k) of this section.

* * * * *

(k) Exports of California heavy crude oil pursuant to

Sec. 777.6(d)(1)(xii). The export of California heavy crude oil will be

allowed for an average of no more than 25,000 barrels per day (MB/D)

(or such greater or lesser volume as the Secretary of Commerce

authorizes based on the determination and recommendation of the

Secretary of Energy) California heavy crude oil having a gravity of 20

degrees API or lower as follows:

(1) Applicants must submit applications on Form BXA-622P to the

following address: Office of Export Licensing, ATTN: Short Supply,

Petroleum, Bureau of Export Administration, U.S. Department of

Commerce, P.O. Box 273, Washington, DC 20044.

(2) The quantity stated on each application must be the total

number of barrels--not a per day rate. This quantity must not exceed

2.28 million barrels or 25 percent of the annual authorized export

quota.

(3) Each application shall be accompanied by documents that show:

(i) The applicant has or will acquire a title to the quantity of

barrels stated in the application by providing either an accepted

contract or bill of sale for the quantity of barrels stated in the

application; or a contract to purchase the quantity of barrels stated

in the application, which may be contingent upon issuance of an export

license to the applicant;

(ii) Contract(s) to export the quantity of barrels stated in the

application, which may be contingent upon issuance of the export

license to the applicant.

(iii) The crude oil: (A) Has a gravity of 20 degrees API or lower;

(B) Was produced within the state of California, including its

submerged state lands;

(C) Was not produced or derived from a U.S. Naval Petroleum

Reserve; and

(D) Was not produced from submerged lands of the U.S. Outer

Continental Shelf.

(4) OEL will adhere to the following procedures for licensing

exports of California crude oil:

(i) OEL will issue validated licenses for approved applications in

the order in which OEL received the application (date-time stamped),

with the total quantity authorized not to exceed 25 percent (2.28

million barrels) of the annual (9.125 million barrels) authorized

volume per license. If any unused quota exists, OEL will continue to

issue licenses for the unused portion of the quota.

(ii) OEL will approve only one application per month for each

company and its affiliates, as long as there are other non-affiliated

applications pending during that month.

(iii) OEL will carry forward any portion of the 25 MB/D quota that

OEL has not licensed, except that OEL will not carry over any

unallocated portions more than 30 days into a new calendar year.

(iv) OEL will return to the available authorized export quota any

portion of the 25 MB/D quota that OEL had licensed but a licensee had

not shipped within the 90 day authorized license term, except that OEL

will not carry over unshipped volumes more than 30 days into a new

calendar year.

(5) License holders:

(i) Have 90 calendar days from the date OEL issued the license to

export the quantity authorized on the license. The exporter is required

to provide OEL with a certified statement confirming the date and

quantity of exports.

(ii) May combine authorized quantities into one or more shipments,

provided that the validity period of none of the affected licenses has

expired.

(iii) Are prohibited from transferring the license to another

party. See, 15 CFR part 787.

(6) OEL will allow, pursuant to Sec. 786.7(c) of this subchapter, a

10 percent shipping tolerance on the unshipped balance based upon the

volume of barrels it has authorized. In addition to the 10 percent

tolerance on the unshipped volume of barrels, OEL will allow a 25

percent shipping tolerance on the total dollar value of the license.

(7) OEL:

(i) Will not carry over to the next calendar year pending

applications from the previous year.

(ii) Will apply the procedures described in this section without

notifying the public concerning any increase in export volume

authorized by the Secretary of Energy from time to time.

Dated: March 17, 1994.

Sue E. Eckert,

Assistant Secretary for Export Administration.

[FR Doc. 94-6885 Filed 3-23-94; 8:45 am]

BILLING CODE 3510-DT-P