Union Oil Co. of Cal. v. US Dept. of Energy, 9-60 to 9-64.
| Decision Date | 01 September 1982 |
| Docket Number | No. 9-60 to 9-64.,9-60 to 9-64. |
| Citation | 688 F.2d 797 |
| Parties | UNION OIL COMPANY OF CALIFORNIA, Plaintiff-Appellee, v. UNITED STATES DEPARTMENT OF ENERGY, and James B. Edwards, Jr., Secretary of Energy, Defendants-Appellants. TOSCO CORPORATION, Plaintiff-Appellant, v. UNITED STATES DEPARTMENT OF ENERGY, and James B. Edwards, Jr., Secretary of Energy, Defendants-Appellees. TOSCO CORPORATION, Plaintiff-Appellee, v. UNITED STATES DEPARTMENT OF ENERGY, and James B. Edwards, Jr., Secretary of Energy, Defendants-Appellants. TOSCO CORPORATION, Plaintiff-Movant, v. UNITED STATES DEPARTMENT OF ENERGY, and James B. Edwards, Jr., Secretary of Energy, Defendants-Respondents. |
| Court | U.S. Temporary Emergency Court of Appeals Court of Appeals |
Thomas C. Newkirk, with whom Larry P. Ellsworth, Peter Aron, Robert C. Power, and Kathrine L. Henry, Dept. of Energy, Washington, D. C., were on the brief, for United States Dept. of Energy, and James B. Edwards, Jr., Secretary of Energy.
Paul J. Mode, Jr., with whom William J. Perlstein and Bruce E. Coolidge, Wilmer, Cutler & Pickering, Washington, D. C., and George C. Bond, Vice President and Gen. Counsel of Union Oil Co., Los Angeles, Cal. (of counsel), were on the brief for Union Oil Co.
Kenneth L. Bachman, Jr., with whom Eugene M. Goott and John G. Finneran, Jr., Cleary, Gottlieb, Steen & Hamilton, Washington, D. C., and C. Rex Boyd, Jeanette M. Thomas, Robert W. Cardwell, Jr., Tosco Corp., Los Angeles, Cal., were on the brief for Tosco Corp.
David L. Roll, Daryl A. Chamblee, Kathleen M. Flanagan, Steptoe & Johnson, Washington, D. C., and Arthur J. Wright (of counsel), Dallas, Tex., counsel for Atlantic Richfield Co.; Charles E. Cheek, Bradley F. Stuebing, and Robert F. Ochs (of counsel), Houston, Tex., counsel for Gulf Oil Corp.; and Robert B. Gex, Pillsbury, Madison & Sutro, San Francisco, Cal., counsel for Chevron U.S.A. Inc., were on the brief for amici curiae Atlantic Richfield Co., Gulf Oil Corp., and Chevron U.S.A. Inc.
Karen S. Bedell, Jamie Replogle, Shank, Irwin, Conant & Williams, Dallas, Tex., were on the brief for amicus curiae Hunt Oil Co.
Richard B. Herzog, J. Stephen Lawrence, Jr., Pepper, Hamilton & Scheetz, Washington, D. C., Paul W. Wommack, Sam S. Norvell, Mitchell Energy & Development Corp., The Woodlands, Tex.; Bill J. Zimmerman, Jay G. Martin, Superior Oil Co., Houston, Tex.; Henry W. Hooker, Ravenna Oil Co., Nashville, Tenn.; were on the brief for amici curiae Mitchell Energy & Development Corp., The Woodlands, Tex., Superior Oil Co., and Ravenna Oil Co.
B. Bruce McClean, Daniel Joseph, Harry R. Silver, Charles P. Warren, Akin, Gump, Strauss, Hauer & Feld, Washington, D. C., and Charles S. Lindberg, William F. Streets, and Gail F. Schultz, Mobil Oil Corp., Fairfax, Va. (of counsel), counsel for Fletcher Oil & Refining Co., Mobil Oil Corp., and Murphy Oil Corp.; W. Bayless Rowe, of El Dorado, Ark., counsel for Murphy Oil Corp.; David A. Nelson, Squire, Sanders & Dempsey, and D. Frank Frisina, of Cleveland, Ohio, counsel for The Standard Oil Co. (Ohio); Keith A. Jones, Warren Belmar, Fulbright & Jaworski, Washington, D. C., counsel for Diamond Shamrock Corp. Kerr-McGee Corp., Texaco, Inc. and Exxon Corp.; John V. Cottle and Jerry D. King, Amarillo, Tex., counsel for Diamond Shamrock Corp., Patrick J. Clarke, Oklahoma City, Okl., counsel for Kerr-McGee Corp., Stephen H. Bard and Elizabeth P. Smith, White Plains, N. Y., counsel for Texaco, Inc., and W. J. McAnelly, Jr. and Edward de la Garza, Houston, Tex., counsel for Exxon Corp., were on the brief for amici curiae Diamond Shamrock Corp., Exxon Corp., Fletcher Oil and Refining Co., Kerr-McGee Corp., Mobil Oil Corp., Murphy Oil Corp., The Standard Oil Co. (Ohio) and Texaco, Inc.
Fred W. Drogula, Patricia N. Blair, Ginsburg, Feldman, Weil & Bress, Washington, D. C., were on the brief for amici curiae Clark Oil and Refining Corp. and Commonwealth Oil Refining Co., Inc.
William H. Bode, John E. Varnum, Batzell, Nunn & Bode, Washington, D. C., were on the brief for amici curiae Hudson Oil Co., Texas American Petrochemicals, Inc., U.S. & Refining Co., Galdieux Refinery, Inc., Peerless Oil & Chemicals, Inc., and Vicksbury Refining Co.
Edwin Jason Dryer, Michael R. Bromwich, Foley, Lardner, Hollabaugh & Jacobs, Washington, D. C., were on the brief for amicus curiae Independent Refiners Ass'n of America.
Joseph A. Katarinic, Thomas A. Donovan, Wendy D. Smith, David J. Sponseller, Kirkpatrick, Lockhart, Johnson & Hutchison, Pittsburgh, Pa., and Robert H. Compton and Kathleen C. Gillmore (of counsel), Ashland Oil Co., Inc., Russell, Ky., were on the brief for amicus curiae, Ashland Oil, Inc.
Allen Tupper Brown, James A. Wilderotter, Thomas E. Fennell, Lisa M. Bell, Jones, Day, Reavis & Pogue, Washington, D. C., and Kent B. Hampton, J. Furman Lewis, and John A. Evans (of counsel), Findley, Ohio, were on the brief for amicus curiae Marathon Oil Co.
Stephen A. Herman, Stephen E. Story, Kirkland & Ellis, Washington, D. C., M. J. Keating, Matthew J. Gallo, Chicago, Ill., were on the brief for amicus curiae Amoco Production Co.
Before CHRISTENSEN, JAMESON and ZIRPOLI, Judges.
Rehearing and Rehearing En Banc Denied October 5, 1982.
On January 28, 1981, President Reagan issued Executive Order 12287, which immediately exempted all crude oil and refined petroleum products from price and allocation controls. On February 19, 1981, the DOE issued Ruling 1981-1, which allows producers to continue to recoup certain expenses incurred in connection with the development of enhanced oil recovery (tertiary) projects, as long as the expenses were incurred, paid and reported prior to February 28 and March 31, 1981 respectively, through the recertification of crude oil sold in December, 1980 and January, 1981. The validity of Ruling 1981-1 is the primary issue on these appeals. In Union Oil Company of California v. DOE, et al., the ruling was held invalid by the District Court for the Central District of California, 530 F.Supp. 717. (Appeal No. 9-60). Its validity was upheld in Tosco Corporation v. DOE, et al., by the District Court for the District of Nevada, 532 F.Supp. 686. (Appeal No. 9-61).
No. 9-63 involves the validity of a so-called "in house" expense amendment allowing producers to recoup expenses paid to affiliated entities for development of tertiary projects. In No. 9-64 Tosco has moved for injunctive relief requesting this court to order the DOE to determine the amount of excess payments each crude oil producer received and pro-rate distribution to the refiner-participants in the Entitlements Program.
Regulations administered by the DOE and its predecessor agencies governed the allocation and price of crude oil from August 19, 1973 until January 28, 1981. See 10 C.F.R. Parts 210-212. For purposes of the price controls, crude oil was divided into three categories. "Old" domestic crude oil was generally that portion of production which did not exceed the base production control level and was subject to a "lowertier" maximum price. "New" or "uppertier" domestic crude oil, where production was in excess of the base period level, could be sold at significantly higher but controlled prices. The third category, "exempt oil," including foreign oil, and domestic oil, newly discovered or produced from a stripper well or pursuant to tertiary recovery techniques, could be sold at uncontrolled or market prices.1 See 10 C.F.R. Part 212, subpart D.
The regulations required each producer to certify the category of crude oil sold to a purchaser. 10 C.F.R. § 212.131. This was necessary to ensure that a purchaser not pay a price in excess of the maximum allowable for the category of crude oil purchased. The regulations did not initially specify when the certifications had to be made. As a result of complaints of long delays in making the required certifications, the DOE amended its regulations in 1975 to impose a two month limit on the issuance of certifications by producers.2 The two-month limitation period provided greater predictability and stability to refiners' crude oil costs while still allowing producers adequate time to determine the correct classification for which a given volume of crude oil had qualified. 40 Fed.Reg. 13522, 13523 (March 27, 1975).
Tertiary enhanced recovery techniques are higher cost production methods which maximize oil production from a depleting field.3 In 1976 Congress directed the DOE to amend its price regulations to provide "additional price incentives for bona fide tertiary enhanced recovery techniques." Energy Conservation and Production Act (ECPA) § 122, 15 U.S.C. § 757(j)(1)(A). Pursuant to that directive, on July 26, 1978, the DOE adopted an amendment to its price regulations, 10 C.F.R. § 212.78 (1979), which provided that increased production of crude oil resulting from a qualified and certified enhanced recovery project would be exempt from price controls. 43 Fed.Reg. 33678 (Aug. 1, 1978). This regulation created a new category of exempt crude oil known as "tertiary incremental crude oil." Effective September 1, 1978, crude oil produced by using tertiary techniques could be sold at market prices.
Concluding that further production incentives were needed, the DOE amended 10 C.F.R. § 212.78 to add the so-called Tertiary Incentive Program (not to be confused with the Tertiary Incremental Program previously adopted). This program was intended "to provide front-end money to producers engaged in the initiation or expansion of tertiary enhanced crude oil projects ..." up to a limit of 20 million dollars per project. 44 Fed.Reg. 18677 (March 29, 1979).
Effective January 1, 1980, the Tertiary Incentive Program permitted a producer to recoup up to 75% of the "allowed expenses" it had "incurred" and "paid" in connection with a "qualified tertiary...
To continue reading
Request your trial
-
United States v. Exxon Corp.
...the Citronelle litigation.50 We have previously reviewed the consequences of the Entitlements Program. In Union Oil Co. of Cal. v. U.S. Dept. of Energy, 688 F.2d 797, 802 (TECA 1982), cert. den., 459 U.S. 1202, 103 S.Ct. 1186, 75 L.Ed.2d 433 (1983), we noted "Certifications of price-control......
-
Texaco, Inc. v. Department of Energy
...to sales of the product occurring prior to its exemption." Reply Brief of DOE at 10, in Union Oil Company of California v. United States Department of Energy, 688 F.2d 797 (Temp.Emer.Ct.App.1982). The Decontrol Order used the same language that was used in the preceding decontrol regulation......
-
United States v. Exxon Corp.
...the entitlements transfers, therefore, was to equalize the average weighted crude oil costs of all refiners. Union Oil Co. of California v. DOE, 688 F.2d 797, 801-02 (Em. App.1982); Pasco, Inc. v. FEA, supra, 525 F.2d at As a result of Exxon's misclassification, less old oil was reported to......
-
Texaco, Inc. v. Department of Energy
...methods, was known as "exempt" oil and was free of price regulation. See 10 C.F.R. § 212(D) (1981); Union Oil Co. of Cal. v. Department of Energy, 688 F.2d 797, 800 (Temp.Emer.Ct. App.1982), cert. denied, 459 U.S. 1202, 103 S.Ct. 1186, 75 L.Ed.2d 433 (1983); Exxon Corp. v. Department of Ene......