[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
                                                                                                                   -------------------------------------
    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