[Federal Register Volume 65, Number 67 (Thursday, April 6, 2000)]
[Notices]
[Pages 18089-18091]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-8326]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Office of Hearings and Appeals


Implementation of Special Refund Procedures

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

ACTION: Notice of implementation of special refund procedures.

-----------------------------------------------------------------------

SUMMARY: The Office of Hearings and Appeals (OHA) of the Department of 
Energy (DOE) announces the final procedures for disbursement of more 
than $12,000,000, 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.

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

SUPPLEMENTARY INFORMATION: In accordance with 10 CFR 205.282(b), notice 
is hereby given of the issuance of the Final Decision and Order set out 
below. The Decision and Order sets forth the procedures that the DOE 
has formulated to distribute more than $12,000,000, 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 will distribute the Consent Order funds in the manner 
stated in an October 29, 1999 Proposed Decision and Order. The monies 
will be divided between the federal government, the states, and injured 
purchasers of refined petroleum products. 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 decision 
and order.

    Dated: March 28, 2000.
George B. Breznay,
Director, Office of Hearings and Appeals.

                                                                       Appendix A
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   Amount
                                                                                                                   -------------------------------------
             Name of firm                         OHA case No.            Consent order tracking system No. (COTS)                       With interest
                                                                                                                        Principal       through 9/30/99
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 Altantic Petrl & General       VEF-0038                           650X00359W                                       107,790.21         123,262.93
 Klotz.
Glen A. Martin.......................  VEF-0039                           610C000478W                                       13,583.80          18,560.48
Intercoastal Operating Co. & L.E.      VEF-0041                           600C20082W                                        95,000.00         159,348.46
 Lewis.
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     VEF-0055                           N00S90461W                                        75,000.00         159,621.07
 Hirshburg.
                                      ------------------------------------------------------------------------------------------------------------------
    Total............................  .................................  ........................................       9,126,580.83      12,660,998.58
--------------------------------------------------------------------------------------------------------------------------------------------------------

Decision and Order of the Department of Energy

Implementation of Special Refund Procedures

Name of Firm: ARGO Petroleum Corp., et al.
Date of Filing: October 19, 1999.
Case Number: VEF-0031, et al.
    On October 29, 1999, the Office of Hearings and Appeals (OHA) of 
the Department of Energy (DOE)issued a Proposed Decision and Order 
(PDO) concerning a Petition for Implementation of Special Refund 
Procedures filed by the DOE's Office of General Counsel for Federal 
Litigation. The PDO is issued as Appendix B to the present 
determination.
    In the PDO, we invited comments regarding a proposal to disburse 
$9,126,580.83 plus interest, received from 17 firms that sold crude 
oil during the period August 17, 1973 through January 1981. The 
names of the firms and the amounts received from each are set forth 
in Appendix A to this determination. The funds were remitted in 
order to settle actual or alleged violations of the DOE's mandatory 
petroleum price and allocation regulations. 10 CFR Parts 211 and 
212. We allowed a 30-day period in which to provide comments 
regarding the manner in which these funds would be disbursed. The 
comment period is now closed. We received no comments regarding our 
proposal. We are therefore issuing final procedures for disbursing 
the funds.
    The monies, including all additional interest that has accrued 
since the issuance of the October 29 PDO, will be disbursed as set 
forth in the appended PDO. As the PDO states, the funds will be 
disbursed as provided for in the DOE's Statement of Modified 
Restitutionary Policy in Crude Oil Cases. 51 Fed. Reg. 27899 (August 
4, 1986) (the SMRP). Therefore, the funds will be divided as 
follows: 20 percent will be reserved for direct restitution to 
injured parties; the remaining 80 percent will be disbursed in equal 
shares to the states and the federal government for indirect 
restitution. As stated above, in this case, the total amount 
available for disbursement, not including interest, is 
$9,126,580.83. This fund shall be disbursed as follows: 
$1,825,316.16 plus 20 percent of all accrued interest as of the date 
of the funds transfer shall be deposited into the DOE interest-
bearing account for crude oil overcharge

[[Page 18090]]

refund claimants; $3,650,632.33 plus 40 percent of all accrued 
interest as of the date of the funds transfer shall be deposited 
into the DOE interest bearing escrow account for the states; 
$3,650,632.33, plus 40 percent of all accrued interest as of the 
date of the funds transfer shall be deposited into the DOE interest 
bearing account for the federal government.
    As we indicated in the PDO, the refund period for filing claims 
for these crude oil overcharge funds is closed. Therefore, no 
applications for refund for these funds may be filed. This final 
Decision and Order simply provides for the appropriate disposition 
of funds that have recently become available. It will affect only 
refund applications that have already been timely filed with the 
OHA. Accordingly, the Proposed Decision and Order, Appendix B to 
this determination, is hereby issued as a final Decision and Order 
of the Department of Energy.

It Is Therefore Ordered That:

    (1) The Director of Special Accounts and Payroll, Office of 
Departmental Accounting and Financial Systems Development, Office of 
the Controller of the Department of Energy shall take all steps 
necessary to transfer the funds remitted by the 17 firms listed in 
Appendix A to this determination, plus accrued interest, pursuant to 
Paragraphs (2), (3), and (4) below.
    (2) The Director of Special Accounts and Payroll shall transfer 
$3,650,632.33, plus 40 percent of all accrued interest on the funds 
referenced in Paragraph (1) above, into the subaccount denominated 
``Crude Tracking--States,'' Number 999DOE003W.
    (3) The Director of Special Accounts and Payroll shall transfer 
$3,650,632.33, plus 40 percent of all accrued interest on the funds 
referenced in Paragraph (1) above, into the subaccount denominated 
``Crude Tracking--Federal,'' Number 999DOE002W.
    (4) The Director of Special Accounts and Payroll shall transfer 
$1,825,316.16, plus 20 percent of all accrued interest on the funds 
referenced in Paragraph (1) above, into the subaccount denominated 
``Crude Tracking--Claimants 4,'' Number 999DOE010Z.
    (5) No Applications for Refund may be submitted in connection 
with this Decision and Order.
    (6) This is a final Order of the Department of Energy.

    Dated: March 28, 2000.
George B. Breznay,
Director, Office of Hearings and Appeals.


                                                                       Appendix A
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   Amount
                                                                                                                   -------------------------------------
             Name of firm                         OHA case No.            Consent order tracking system No. (COTS)                       With interest
                                                                                                                        Principal       through 9/30/99
--------------------------------------------------------------------------------------------------------------------------------------------------------
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                           660C00646W                                        25,000.00          36,649.53
General Atlantic Petrl & General       VEF-0038                           650X00359W                                       107,790.21         123,262.93
 Klotz.
Glen A. Martin.......................  VEF-0039                           610C000478W                                       13,583.80          18,560.48
Intercoastal Operating Co. & L.E.      VEF-0041                           600C20082W                                        95,000.00         159,348.46
 Lewis.
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                           N00S9809W                                          6,950.58          15,485.49
Tominson Petrl., Inc.................  VEF-0054                           65X00318W                                      7,406,694.87      10,027,185.48
United Independent Oil Co. & Peter     VEF-0055                           N00S90461W                                        75,000.00         159,621.07
 Hirshburg.
                                      ------------------------------------------------------------------------------------------------------------------
    Total............................  .................................  ........................................       9,126,580.83      12,660,998.58
--------------------------------------------------------------------------------------------------------------------------------------------------------

Appendix B

Proposed Decision and Order of the Department of Energy

Implementation of Special Refund Procedures

    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 CFR 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 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 Fed. Reg. 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

[[Page 18091]]

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 Fed. Reg. 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 
Decisions.

                                                                        Appendix
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   Amount
                                                                                                                   -------------------------------------
             Name of firm                         OHA case No.            Consent order tracking system No. (COTS)                       With interest
                                                                                                                        Principal       through 9/30/99
--------------------------------------------------------------------------------------------------------------------------------------------------------
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       VEF-0038                           650X00359W                                       107,790.21         123,262.93
 Klotz.
Glen A. Martin.......................  VEF-0039                           610C000478W                                       13,583.80          18,560.48
Intercoastal Operating Co. & L.E.      VEF-0041                           600C20082W                                        95,000.00         159,348.46
 Lewis.
Kelly Trading Co & Reed, M.L.........  VEF-0043                           650X00350W                                       182,000.00         265,665.83
Martin Exploration Co................  VEF-0044                           640C00406W                                         3,917.00           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                           N00X98090W                                         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     VEF-0055                           N00S90461W                                        75,000.00         159,621.07
 Hirshburg.
                                      ------------------------------------------------------------------------------------------------------------------
    Total............................                                                                                    9,126,580.83      12,660,998.58
--------------------------------------------------------------------------------------------------------------------------------------------------------

[FR Doc. 00-8326 Filed 4-5-00; 8:45 am]
BILLING CODE 6450-01-M