Legal Authorities Available to the President to Respond to a Severe Energy Supply Interruption or Other Substantial Reduction in Available Petroleum Products

Decision Date15 November 1982
Docket Number82-71
Citation6 Op. O.L.C. 644
CourtOpinions of the Office of Legal Counsel of the Department of Justice
PartiesLegal Authorities Available to the President to Respond to a Severe Energy Supply Interruption or Other Substantial Reduction in Available Petroleum Products

Theodore B. Olson Assistant Attorney General Office of Legal Counsel.

Legal Authorities Available to the President to Respond to a Severe Energy Supply Interruption or Other Substantial Reduction in Available Petroleum Products

[The following memorandum, prepared for the President for transmission to Congress in accordance with the direction in § 3 of the Energy Emergency Preparedness Act of 1982 describes in comprehensive fashion the authorities available to the President under existing statutes to respond to a severe energy supply shortage or interruption. It sets forth the legal basis for certain specific emergency preparedness activities, discusses the scope of each available emergency authority, and analyzes the differing threshold standards for activation of the President's authority under each of the statutes involved.]

MEMORANDUM OF LAW

TABLE OF CONTENTS

TABLE OF CONTENTS GLOSSARY OF ABBREVIATIONS

INTRODUCTION
I. STATUTORY AUTHORITIES
A. Energy Policy and Conservation Act

1. § 103. Limitations on Exports

2. § 106. Accelerated Production Rates

3. §§ 151-161. Strategic Petroleum Reserve

a. Establishment of the SPR
b. Filling the SPR
c. Drawdown and Distribution of the SPR

4. §§ 201-202. Energy Conservation Contingency Plans

5. §§ 251, 252, 254. Authorities in Support of the Allocation and Information Provisions of the IEP

a. § 251. International Allocation

b. § 252. Antitrust Defense

c. § 254. Exchange of Information with the International Energy Agency [ 645]

B. Defense Production Act of 1950

1. § 101(a). Priority Performance of Contracts and Allocation of Materials

2. § 101(c). Maximizing Domestic Energy Supplies

3. § 708. Voluntary Agreements

4. § 710. Employment of Persons from the Private Sector

a. Circumstances Governing Use of Employees
b. Conflict-of-interest and Antitrust Restrictions

1) Conflict-of-interest Restrictions

2) Antitrust Exposure

C. Trade Expansion Act of 1962
E. Emergency Energy Conservation Act of 1979
F. Export Administration Act of 1979
G. Other Statutory Authorities
1. Fuel Switching Authorities
2. Miscellaneous Statutes
II. LEGAL BASES FOR SPECIFIED ENERGY PREPAREDNESS ACTIVITIES
A. Authority to Implement the IEP
1. Obligations Imposed by the IEP Agreement
a. Emergency Reserves (Chapter I)
b. Demand Restraint (Chapter II)
c. Oil Sharing (Chapter III)
d. Information Exchange (Chapter V)
2. Activation of the IEP Emergency System
3. Statutory Authority to Implement the IEP Agreement
a. Emergency Reserves
b. Demand Restraint Measures
c. Oil Sharing d. Information Exchange
4. December 10, 1981, Decision of the Governing Board with Respect to Subcrisis Activities
5. National Emergency Sharing Organization
6. Emergency Sharing System
7. Supply Rights Project
B. Authority to Fulfill NATO Obligations
C. Authority with Respect to Development and Use of the SPR
D. Authority for Government Incentives to Encourage Private Petroleum Product Stocks
E. Authority for Reactivation of the Executive Reserve
F. Authority for Coordination with State and Local Governments
1. Preemption of State Laws and Regulations
2. Burden on Interstate Commerce
G. Authority for Public Information Activities [ 646]
III. TRIGGERS FOR EXERCISE OF STATUTORY AUTHORITIES
A. Situations Involving War, International Tensions That Threaten National Security, and Other Presidentially Declared Emergencies
B. Events Resulting in Activation of the International Energy Program
C. Less Severe Events or Situations
IV. CONCLUSION [ 647]
GLOSSARY OF ABBREVIATIONS

DPA Defense Production Act of 1950

EAA Export Administration Act of 1979

EECA Emergency Energy Conservation Act of 1979

EEPA Energy Emergency Preparedness Act of 1982

EPAA Emergency Petroleum Allocation Act of 1975

EPCA Energy Policy and Conservation Act

ESA Energy Security Act

FEMA Federal Emergency Management Agency

FERC Federal Energy Regulatory Commission

FPA Federal Power Act

FPM Federal Personnel Manual

FTC Federal Trade Commission

FUA Powerplant and Industrial Fuel Use Act of 1978

IEA International Energy Agency

IEEPA International Emergency Economic Powers Act

IEP International Energy Program

IPR Industrial Petroleum Reserve

Mer Maximum efficient rate of production

MLLA Mineral Lands Leasing Act

NATO North Atlantic Treaty Organization

NEA National Emergencies Act

NESO National Emergency Sharing Organization

NGA Natural Gas Act

NGPA Natural Gas Policy Act

NPRs Naval Petroleum Reserves

OCS Outer Continental Shelf

PURPA Public Utility Regulatory Policies Act of 1978

SPR Strategic Petroleum Reserve

TEA Trade Expansion Act of 1962

Ter Temporary emergency production rate

TWEA Trading with the Enemy Act

WOCs Without Compensation Employees [ 648]

Introduction

This memorandum is submitted in response to § 3 of the Energy Emergency Preparedness Act of 1982 (EEPA), Pub. L. No 97-229, 96 Stat. 248 (1982). That section amends Title II of the Energy Policy and Conservation Act, 42 U.S.C. §§ 6201-6422 (1982), by adding, inter alia, a new § 272(a). Section 272(a) directs the Attorney General, in consultation with the Secretary of Energy, to prepare for transmission by the President to Congress a "Memorandum of Law" describing the "nature and extent of the authorities available to the President under existing law to respond to a severe energy supply interruption or other substantial reduction in the amount of petroleum products available in the United States."[1] Section 272(a) provides that the Memorandum of Law shall address the legal bases for certain specific emergency preparedness activities to deal with a petroleum shortage, [2] and to distinguish among the threshold standards for activation of the President's statutory authorities.[3] [ 649]

In to implement fully the intent of the EEPA, we have prepared the following analysis of the primary statutory authorities that would be available to the President in the event of a severe energy supply interruption. In addition to describing the requirements, scope, and limitations of those statutory authorities, we attempt to address each of the legal issues specifically raised by Congress during consideration of the EEPA and the legal bases for the activities enumerated in § 272(a)(3).. Consistent with the scope and legislative intent of the EEPA, [4]the analysis focuses on statutory authorities that could be used to respond to a "petroleum emergency"i.e., standby authorities that could be exercised in the event of a sudden substantial reduction in petroleum products available to the United States.[5] We generally do not address the President's broad authority to take actions to reduce the likelihood that any of these "emergency" authorities will ever have to be exercised, or particular statutory authorities with respect to energy emergencies resulting from a shortfall in energy sources other than petroleum.

It is important to recognize at the outset that any memorandum of law discussing the powers of the President in the context of nonexistent, necessarily incomplete, and hypothetical facts is of limited utility and should not be regarded as decisive or exhaustive of the President's legal authority to take any specific action based on a factual situation that may arise in the future. The exercise of the various broad powers of the President to deal with "emergencies" is so often tied to the particular facts and circumstances confronting the President at that time that a general and hypothetical discussion of his authority should not and cannot be viewed as dispositive of his authority in actual emergencies.[6] See generally Dames & Moore v Regan, 453 U.S. 654, 660-62, 669 (1981).

Finally, the purpose of this Memorandum is limited to outlining the nature and scope of the statutory authorities available to the President. The Memorandum does not address whether or how the President should exercise particular authorities. That question is primarily a policy rather than a legal matter, and therefore outside the scope of this Memorandum. In that regard, it should be noted that, as described more fully below, the available statutory authorities generally provide the President with broad discretion to determine if, when, and how they should be exercised, taking into account the facts of any future energy emergency and the President's best judgment as to how to prevent or deal with the emergency situation.

Part I of this Memorandum outlines the scope and applicability of existing statutory authorities available to the President to deal with a petroleum emergency. Part II describes how those statutory authorities may support or limit the [ 650] particular energy preparedness activities enumerated in § 272(a)(3)(A). Part III groups the statutory authorities according to the three triggering situations listed in § 272(a)(3)(B), to the extent consistent with the specific provisions of those statutes.

I. Statutory Authorities

A number of statutes currently provide the President with authority that may be available in the event of a substantial domestic or international shortfall in petroleum supplies ranging from direct authority to allocate and to restrict imports or exports of petroleum products, to authority to undertake or facilitate energy emergency preparedness planning and programs. The scope of the President's authority under these statutes necessarily depends on the...

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