Proposed Implementation of Special Refund Procedures

[Federal Register Volume 64, Number 226 (Wednesday, November 24, 1999)]
[Notices]
[Pages 66178-66179]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30607]

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DEPARTMENT OF ENERGY

Office of Hearings and Appeals

Proposed Implementation of Special Refund Procedures

AGENCY: Office of Hearings and Appeals, Department of Energy.

ACTION: Notice of proposed implementation of special refund procedures.

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SUMMARY: The Office of Hearings and Appeals (OHA) of the Department of
Energy (DOE) announces the proposed procedures for disbursement of
$12,660,998.58, including accrued interest, in alleged crude oil
overcharges obtained by the DOE under the terms of Consent Orders and
Remedial Orders entered into with ARGO Petroleum Corp. and 16 other
firms, Case Nos. VEF-0031, et al. The OHA has tentatively determined
that the funds obtained from these 17 firms plus accrued interest, will
be distributed in accordance with the DOE's Modified Statement of
Restitutionary Policy Concerning Crude Oil Overcharges.

DATES AND ADDRESSES: Comments must be filed in duplicate within 30 days
of publication of this notice in the Federal Register, and should be
addressed to the Office of Hearings and Appeals, Department of Energy,
1000 Independence Avenue, SW, Washington, D.C. 20585-0107. All comments
should display a reference to case number VEF-0031, et al.

FOR FURTHER INFORMATION CONTACT: Thomas L. Wieker, Deputy Director,
Office of Hearings and Appeals, 1000 Independence Avenue, S.W.,
Washington, D.C. 20585-0107 (202) 426-1527.

SUPPLEMENTARY INFORMATION: In accordance with 10 CFR Sec. 205.282(b),
notice is hereby given of the issuance of the Proposed Decision and
Order set out below. The Proposed Decision and Order sets forth the
procedures that the DOE has tentatively formulated to distribute to
eligible claimants, $12,660,998.58, including interest, obtained by the
DOE under the terms of Consent Orders and Remedial Orders entered into
with ARGO Petroleum Corp. and 16 other firms. The funds were paid
towards the settlement of violations and alleged violations of the DOE
price and allocation regulations involving the sale of crude oil during
the period August 1973 through January 1981.
The OHA has proposed to distribute the Consent Order funds in
accordance with the DOE's Modified Statement of Restitutionary Policy
Concerning Crude Oil Overcharges, 51 FR 27899 (August 4, 1986) (the
MSRP). Under the MSRP, crude oil overcharge monies are divided between
the federal government, the states, and injured purchasers of refined
petroleum products. Refunds to the states would be distributed in
proportion to each state's consumption of petroleum products during the
price control period. Refunds to eligible purchasers would be based on
the number of gallons of petroleum products which they purchased and
the degree to which they can demonstrate injury. Since the period for
filing claims for crude oil overcharge refunds has closed, no new
refund applications will be accepted for the funds involved in this
Proposed Decision and Order.
Any member of the public may submit written comments regarding the
proposed refund procedures. Commenting parties are requested to provide
two copies of their submissions. Comments must be submitted within 30
days of publication of this notice in the Federal Register and should
be sent to the address set forth at the beginning of this notice. All
comments received in this proceeding will be available for public
inspection between the hours of 1 p.m. and 5 p.m., Monday through
Friday, except federal holidays, in the Public Reference Room of the
Office of Hearings and Appeals, 950 L'Enfant Plaza, S.W., Washington,
D.C. 20585-0107.

Dated: October 29, 1999.
George B. Breznay,
Director, Office of Hearings and Appeals.

Name of Firm: ARGO Petroleum Corp., et al.
Date of Filing: October 19, 1999.
Case Number: VEF-0031, et al.
In accordance with the procedural regulation of the Department of
Energy (DOE), a DOE enforcement official may file a request that the
Office of Hearings and Appeals (OHA) formulate and implement special
refund procedures. 10 C.F.R. 205.281. These procedures are used to
refund monies to those injured by actual or alleged violations of the
DOE price regulations.
In this Decision and Order, we consider a Petition for
Implementation of Special Refund Procedures filed by the DOE's Office
of General Counsel for Federal Litigation (OGC) on October 19, 1999.
The funds at issue in this case were obtained from 17 firms that sold
crude oil during the period August 1973 through January 1981. These
firms remitted moneys to the DOE to settle actual or alleged violations
of the DOE's mandatory petroleum price and allocation regulations set
forth at 10 CFR Parts 211 and 212. The sums submitted by each firm,
including accrued interest are set forth in the Appendix to this
Decision. The total amount remitted, including interest through
September 30, 1999, is $12,660,998.58. This Decision and Order sets out
the OHA's proposed procedures to distribute those funds.
The general guidelines which the OHA may use to formulate and
implement a plan to distribute refunds are set forth in 10 CFR Part
205, Subpart V. The Subpart V process may be used in situations where
the DOE cannot readily identify the persons who may have been injured
as a result of actual or alleged violations of the regulations or
ascertain the amount of the refund each person should receive. For a
more detailed discussion of Subpart V and the authority of the OHA to
fashion procedures to distribute refunds, see Office of Enforcement, 9
DOE para. 82,508 (1981), and Office of Enforcement, 8 DOE para. 82,597
(1981). We have considered the OGC's request to

[[Page 66179]]

implement Subpart V procedures with respect to the monies received from
the 17 firms named in the Appendix and have determined that such
procedures are appropriate.
On July 28, 1986, the DOE issued a Statement of Modified
Restitutionary Policy in Crude Oil Cases, 51 FR 27899 (August 4, 1986)
(the SMRP). The SMRP, issued as a result of a court-approved Settlement
Agreement In re: The Department of Energy Stripper Well Exemption
Litigation, M.D.L. No. 378 (D. Kan. 1986), reprinted in 6 Fed. Energy
Guidelines para. 90,501 (The Stripper Well Agreement), provides that
crude oil overcharge funds will be divided among the states, the
federal government, and injured purchasers of refined petroleum
products. Eighty percent of the funds, and any monies remaining after
all valid claims are paid, are to be disbursed equally to the states
and federal government for indirect restitution. Twenty percent of the
funds will be used for direct restitution to claimants who were injured
by actual or alleged crude oil violations.
The OHA has applied these procedures in numerous cases. E.g., New
York Petroleum, Inc., 18 DOE para. 85,435 (1988); Shell Oil Co., 17 DOE
para. 85,204 (1988); Ernest A. Allerkamp, 17 DOE para. 85,079 (1988).
The procedures have been approved by the United States District Court
for the District of Kansas, as well as the Temporary Emergency Court of
Appeals. We will not reiterate those procedures here. They are by now
well known and, further, the period for filing refund claims for crude
oil overcharge funds closed on June 30, 1995. 60 FR 19914-15 (April 21,
1995).
Accordingly, we propose to reserve the full twenty percent of the
available alleged crude oil violation amounts, $2,532,199.72, for
direct refunds to claimants, in order to ensure that sufficient funds
will be available for refunds to injured parties. As stated above, no
new applications for refund for those monies will be accepted, since
the claims period has closed. The funds will be added to the general
crude oil overcharge pool available for direct restitution.
Under the terms of the SMRP, we propose that the remaining eighty
percent of the alleged crude oil violation amounts subject to this
Decision, or $10,128,798.86, should be disbursed in equal shares to the
states and federal government for indirect restitution. The share or
ratio of the funds which each state will receive is contained in
Exhibit H of the Stripper Well Agreement. When disbursed, these funds
will be subject to the same limitations and reporting requirements as
all other crude oil monies received by the states under the Stripper
Well Agreement.
It Is Therefore Ordered That: The refund amounts remitted to the
Department of Energy by the firms listed in the Appendix to this
Decision and Order will be distributed in accordance with the foregoing
Decision.

Appendix--Consent Order
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Tracking Amount
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Name of firm With interest
OHA Case No. System No. (COTS) Principal through 9/30/99
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ARGO Petroleum Corp................................. VEF-0031 940C0089W $60,835.18 $86,841.36
Don E. Pratt Oil Co................................. VEF-0036 740C01204W 235,000.00 394,878.05
Beta Energy Corp.................................... VEF-0034 6C0X00260W 32,818.34 45,037.34
AWECO, Inc. & Hargis, Billy K....................... VEF-0032 6A0X00231W 665,908.68 968,874.23
B.M. Hester......................................... VEF-0033 660C00647W 25,000.00 36,649.53
General Atlantic Petrl. & General Klotz............. VEF-0038 650X00359W 107,790.21 123,262.93
Glen A. Martin...................................... VEF-0039 610C000478W 13,583.80 18,560.48
Intercoastal Operating Co. & L.E. Lewis............. VEF-0041 600C20082W 95,000.00 159,348.46
Kelly Trading Co. & Reed, M.L....................... VEF-0043 650X00350W 182,000.00 265,665.83
Martin Exploration Co............................... VEF-0044 640C00406W 3,917.32 5,989.39
Pel-Star Energy..................................... VEF-0047 6A0X00277W 30,263.70 51,178.22
Petro-Thermo........................................ VEF-0048 6A0X00301W 42,772.32 75,698.67
Petroleum Mgmt., Inc................................ VEF-0049 422C00066W 71,319.67 117,570.09
Polaris Production Co............................... VEF-0050 670C00229W 71,726.16 109,151.96
Road Oil Sales...................................... VEF-0051 N00S98090W 6,950.58 15,485.49
Tomlinson Petrl., Inc............................... VEF-0054 650X00318W 7,406,694.87 10,027,185.48
United Independent Oil Co. & Peter Hirshburg........ VEF-0055 N00S90461W 75,000.00 159,621.07
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Total........................................... ........................... ............................... 9,126,580.83 12,660,998.58
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[FR Doc. 99-30607 Filed 11-23-99; 8:45 am]
BILLING CODE 6450-01-P

Proposed Implementation of Special Refund Procedures

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