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fuels in a single notice of 'proposed rulemaking and issued a
single document containing its preliminary findings and
views related to the exemption.
However, as required by the
EPAA, FEA has determined separately for the No. 2 oils and
for the other middle distillate fuels that an exemption
should be adopted, and is today submitting separate exemption
amendments ("Energy Actions Nos. 3 and 4") for these product
categories for Congressional review of FEA's findings and
views supporting these exemptions.
The exemption amendment
contained in this document, to be submitted as Energy Action
No. 3, relates to No. 2 heating oil and No. 2-0 diesel fuel
a single product category ("No. 2 oils"). "No. 2 heating oil" means heating oil grade No. 2 as defined in American
Society for Testing and Materials (ASTM) D396-71.
diesel fuel" means diesel fuel grade no. 2 as defined in
American Society for Testing and Materials (ASTM) D975-71.
One hundred forty-seven written and oral comments were
received in response to the notice of proposed exemption.
Those offering comments included major integrated refining
companies, small and independent refining companies, marketers,
ultimate consumers, state governments and trade associations.
Almost all of the parties commenting agreed with FEA
that No. 2 oils should be exempted from FEA's allocation and
This support was based generally upon
agreement with FEA's conclusions as to supply and demand
projections, competition, and other findings and views set forth in the preliminary Findings. Parties opposing the exemption of No. 2 oils generally based their opposition on the belief that the current surplus supply situation might
not continue through the upcoming heating season, that spot
shortages might occur, and that if such shortages were to
occur, independent marketers and consumers of No. 2 oils
FEA has concluded that its initial view that No. 2 oils
should be exempted from regulations is correct.
No information or data were presented in this proceeding
which significantly alter FEA's preliminary findings and
FEA does not anticipate that supply shortages will
occur in the future as predicted by some comments and in any
event FEA has standby authority under section 12 (f) of the
Emergency Petroleum Allocation Act of 1973 (EPAA) to reimpose allocation and price controls (on a temporary or permanent
basis) if necessary
to attain the objectives set forth in
section 4 (b) (1) of the EPAA.
Therefore, FEA hereby adopts
the proposed amendments exempting No. 2 oils from the Mandatory Petroleum Allocation and Price Regulations. Unless disapproved
by either House of Congress under section 551 of the Energy
Policy and Conservation Act (EPCA), this exemption will be
effective either July 1, 1976 or the first day following the.
expiration of the 15 day period provided in section 551 for Congressional review, whichever is later.
Although FEA is adopting this exemption amendment based
on its firm conclusion that a supply shortage respecting No.
2 oils will not occur in the forseeable future, FEA recognizes
that unforseeable difficulties, unrelated to the exemption
amendment adopted today and confined to particular market
areas, could arise.
In order to further ensure that any such
possible supply problems following the removal of controls do not adversely affect independent marketers and their
similar to the state set-aside program currently in effect
and in a manner similar to that by which supplier/purchaser
assignments are currently effected.
Findings and Views
In addition to this amendment to exempt No. 2 oils from
the Mandatory Petroleum Allocation and Price Regulations,
FEA has prepared its findings and views supporting the
amendment as required by section 12 of the EPAA based upon
its consideration of the comments of those persons who
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participated in the rulemaking and other information available
to FEA. These findings and views are set forth in a document dated June 15, 1976 and entitled "Findings and Views Concerning the Exemption of Middle Distillates from the Mandatory
Petroleum Allocation and Price Regulations" ("Findings and
adverse impact on the supply of any other oil or refined
product subject to the EPAA.
Competition and market forces are adequate to protect
consumers, following an exemption of No. 2 oils from