[Federal Register Volume 70, Number 128 (Wednesday, July 6, 2005)]
[Notices]
[Pages 38901-38902]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-13231]


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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 the disbursement of 
$1,585,576.76, plus accrued interest, in crude oil overcharges obtained 
by the DOE concerning BPM Ltd., Case No. TEF-0001, Honeymon Drilling 
Co., Case No. TEF-0002, Intercontinental Oil, Case No. TEF-0003, Knox 
Oil, Case No. TEF-0004, Pescar Trading, Case No. TEF-0005, Shepherd 
Oil, Inc., Case No. TEF-0006, Sierra Petroleum Co., Case No. TEF-0007, 
Thriftway Co., Case No. TEF-0008, and Western Refining Co. (Robert J. 
Martin), Case No. TEF-0011.

DATES: Comments must be filed in duplicate within 30 days of 
publication of this notice in the Federal Register

ADDRESSES: Comments should be addressed to the Office of Hearings and 
Appeals, Department of Energy, 1000 Independence Ave., SW., Washington, 
DC 20585-1615. All comments should display a reference to Case No. TEF-
0001.

FOR FURTHER INFORMATION CONTACT: Richard A. Cronin, Jr., Assistant 
Director, Office of Hearings and Appeals, 1000 Independence Ave., SW., 
Washington, DC 20585-1615 (202) 287-1589, [email protected].

SUPPLEMENTARY INFORMATION: In accordance with 10 CFR 205.282(b), notice 
is hereby given of the issuance of the Proposed Decision and Order set 
out below. The Proposed Decision sets forth the procedures that the DOE 
has tentatively formulated to distribute to eligible claimants 
$1,585,576.76, plus accrued interest, obtained by the DOE from BPM 
Ltd., Honeymon Drilling Co., Intercontinental Oil, Knox Oil, Pescar 
Trading, Shepherd Oil, Inc., Sierra Petroleum Co., Thriftway Co., and 
Western Refining Co. (Robert J. Martin).
    The OHA has proposed to distribute these funds in the currently-
existing crude oil refund proceeding described in the Proposed Decision 
and Order. Because the deadline for filing crude oil refund 
applications has passed, no new applications for refund for the alleged 
(or established) crude oil pricing violations of the listed firms will 
be accepted for these funds.
    Any member of the public may submit written comments regarding the 
proposed refund procedures. Commenting parties are requested to forward 
two copies of their submission, within 30 days of the publication of 
this notice in the Federal Register, to the address set forth at the 
beginning of this notice. Comments so received will be made available 
for public inspection between the hours of 1:30 p.m. and 4 p.m., Monday 
through Friday, except Federal Holidays, in Room 7132 (the public 
reference room), 950 L'Enfant Plaza, Washington, DC.

    Dated: June 29, 2005.
Fred L. Brown,
Acting Deputy Director, Office of Hearings and Appeals.

Proposed Decision and Order

    Names of Firms: BPM Ltd., Honeymon Drilling Co., Intercontinental 
Oil, Knox Oil, Pescar Trading, Shepherd Oil, Inc., Sierra Petroleum 
Co., Thriftway Co., and Western Refining Co. (Robert J. Martin).
    Date of Filing: June 21, 2005.
    Case Numbers: TEF-0001, TEF-0002, TEF-0003, TEF-0004, TEF-0005, 
TEF-0006, TEF-0007, TEF-0008, and TEF-0009.

I. Background

    The Office of General Counsel (OGC) of the Department of Energy 
(DOE) filed a Petition requesting that the Office of Hearings and 
Appeals (OHA) formulate and implement subpart V special refund 
proceedings. Under the procedural regulations of the DOE, special 
refund proceedings may be implemented to refund monies to persons 
injured by violations of the DOE petroleum price regulations, provided 
DOE is unable to readily identify such persons or to ascertain the 
amount of any refund. 10 CFR 205.280. We have considered OGC's request 
to formulate refund procedures for the disbursement of monies remitted 
by the following firms pursuant to administrative or judicial decisions 
or in settlement of the DOE allegations that the firms had violated the 
DOE petroleum price control and allocation regulations:
    BPM Ltd., Honeymon Drilling Co., Intercontinental Oil, Knox Oil, 
Pescar Trading, Shepherd Oil, Inc., Sierra Petroleum Co., Thriftway 
Co., and Western Refining Co. (Robert J. Martin).
    We have determined that the refund procedures requested by OGC are 
appropriate.
    A total of $1,585,576.76 has been remitted to DOE by these firms to 
remedy violations that occurred during the relevant audit periods. 
These funds are being held in an escrow account established with the 
United States Treasury pending a determination of their proper 
distribution. This Decision sets forth OHA's proposed plan to 
distribute those funds.

II. Jurisdiction and Authority

    The general guidelines that govern OHA's ability to formulate and 
implement a plan to distribute refunds are set forth at 10 CFR Part 
205, subpart V. These procedures apply in situations where the DOE 
cannot readily identify the persons who were 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 ] 
82,508 (1981) and Office of Enforcement, 8 DOE ] 82,597 (1981).

III. Refund Procedures

A. Allocation of Remitted Funds

    The alleged violations by the above-named firms all concerned the 
sale of crude oil. Under these circumstances, we propose that all of 
the funds remitted be allocated for restitution for parties injured by 
the firms' alleged violations of the crude oil regulations.

B. Refund Procedures for Crude Oil Violations

    We propose that the funds should be distributed in accordance with 
the DOE's Modified Statement of Restitutionary Policy in Crude Oil 
Cases, (MSRP), see 51 FR 27899 (August 4, 1986). Pursuant to the MSRP, 
OHA may reserve up to 20 percent of those funds for direct refunds to 
applicants who claim that they were injured by the crude oil 
violations. The remaining funds would be distributed to the states and 
federal government for indirect restitution. We propose to distribute 
the funds obtained from the two firms in accordance with the MSRP, 
which was issued as a result of the Settlement Agreement approved by 
the court in The Department of Energy Stripper Well Exemption 
Litigation, 653 F. Supp. 108 (D. Kan. 1986). Shortly after the issuance 
of the MSRP, the OHA issued an Order that announced that this policy 
would be applied in all subpart V proceedings involving alleged crude

[[Page 38902]]

oil violations. See Order Implementing the MSRP, 51 FR 29,689 (August 
20, 1986) (the August 1986 Order).
    Under the MSRP, 40 percent of crude oil overcharge funds will be 
disbursed to the federal government, another 40 percent to the states, 
and up to 20 percent may initially be reserved for the payment of 
claims to injured parties. The MSRP also specified that any funds 
remaining after all valid claims by injured purchasers are paid will be 
disbursed to the federal government and the states in equal amounts.
    In April 1987, the OHA issued a Notice analyzing the numerous 
comments received in response to the August 1986 Order. 52 FR 11737 
(April 10, 1987) (April 10 Notice). This Notice provided guidance to 
claimants that anticipated filing refund applications for crude oil 
monies under the Subpart V regulations. In general, we stated that all 
claimants would be required to (1) document their purchase volumes of 
petroleum products during the August 19, 1973 through January 27, 1981 
crude oil price control period, and (2) prove that they were injured by 
the alleged crude oil overcharges. Applicants who were end-users or 
ultimate consumers of petroleum products, whose businesses are 
unrelated to the petroleum industry, and who were not subject to the 
DOE price regulations would be presumed to have been injured by any 
alleged crude oil overcharges. In order to receive a refund, end-users 
would not need to submit any further evidence of injury beyond the 
volume of petroleum products purchased during the period of price 
controls. See City of Columbus Georgia, 16 DOE ] 85,550 (1987).
1. Individual Refund Claims
    The amount of money obtained from the listed firms intended for 
restitution of crude oil violations is $1,585,576.76 plus accrued 
interest. In accordance with the MSRP, we shall initially reserve 20 
percent of those funds ($317,115 plus accrued interest) for direct 
refunds to applicants who claim that they were injured by crude oil 
overcharges. We shall base refunds on a volumetric amount which has 
been calculated in accordance with the methodology described in the 
April 10 Notice. That volumetric refund amount is currently $0.0016 per 
gallon. See 57 FR 15562 (March 24, 1995). On May 13, 2004, we announced 
final procedures for the distribution of the remaining crude oil 
overcharge funds held by DOE, and estimated that the remaining funds 
would result in an additional volumetric refund amount of $0.00072 per 
gallon. See 69 FR 29300 (May 21, 2004).
    The filing deadline for refund applications in the crude oil refund 
proceeding was June 30, 1994. This was subsequently changed to June 30, 
1995. See Filing Deadline Notice, 60 FR 19914 (April 20, 1995); see 
also DMLP PDO, 60 FR 32004, 32007 (June 19, 1995). Because the June 30, 
1995, deadline for crude oil refund applications has passed, no new 
applications for restitution from purchasers of refined petroleum 
products based on the alleged (or established) crude oil pricing 
violations will be accepted for these funds. Instead, these funds will 
be added to the general crude oil overcharge pool used for direct 
restitution.
2. Payments to the States and Federal Government
    Under the terms of the MSRP, the remaining 80 percent of the crude 
oil violation amounts subject to this Decision, or $1,268,461 plus 
accrued interest, should be disbursed in equal shares to the states and 
federal government, for indirect restitution. Refunds to the states 
will be in proportion to the consumption of petroleum products in each 
state during the period of price controls. The share or ratio of the 
funds which each state will receive is contained in Exhibit H of the 
Stripper Well Settlement 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.
    Accordingly, we will direct the DOE's Office of the Controller to 
transfer one-half of that amount, or $634,230 plus interest, into an 
interest bearing subaccount for the states, and one-half or $634,230 
plus interest, into an interest bearing subaccount for the federal 
government.
    It is therefore ordered that: The payments remitted to the 
Department of Energy by BPM Ltd., Honeymon Drilling Co., 
Intercontinental Oil, Knox Oil, Pescar Trading, Shepherd Oil, Inc., 
Sierra Petroleum Co., Thriftway Co., and Western Refining Co. (Robert 
J. Martin) will be distributed in accordance with the forgoing 
Decision.

[FR Doc. 05-13231 Filed 7-5-05; 8:45 am]
BILLING CODE 6450-01-P