3.

STATE LEVEL RESPONSIBILITIES

A.

Federal-State Liaison Office In Each State

The FEO is responsible for the following, through the Federal-State Liaison Officer located in each state:

B.

Facilitating coordination between FEO headquarters,
regional offices, and state officials

Providing guidance on Federal Programs

Monitoring state activities conducted under these
regulations.

State Energy Office Responsibilities

The state offices are responsible for:

The allocation of the state set-aside in resolving emer-
gencies and hardships. The set-aside will be taken from
working stocks of refiners, importers, and prime sup-
pliers. It cannot be accummulated or deferred, i.e.,
any excess at the end of each month will be added to
the supplier's total available supplies for the following
month, and thus be "lost" by the State. Further, State
governments are not permitted to physically accummulate
inventories of fuels except such inventories as are cus-
tomary in operating state vehicles and facilities. State
set-asides are provided for propane, middle distillates,
motor gasoline, and residual fuel oil (except when used
by utilities or as bunker fuel).

Advising the FEO regional office and National Office of problems within the state, including problems associated with hardship allocations by the states.

13

Graphic illustrations of these allocation programs follow this chapter.

43-187 O 75 13

1. CRUDE OIL AND REFINERY YIELD

(1) Coverage

This allocation program provides for an equitable distribution of crude oil among refiners. It is also intended to ensure adequate supplies of essential petroleum products used in home heating, agricultural and industrial production, and aviation, by diverting some refining capacity from the production of motor gasoline when required. Those quantities of crude oil available to refiners or importers which are in excess of 1973 base period levels are exempted from the program.

(2) Method of Allocating Crude Oil

The crude oil supply of the United States is allocated within the refining industry on a quarterly basis. As a calendar quarter ends, each refiner reports to the FEO the capacity of his refineries, actual crude oil quantities processed in the Quarter just ending, and estimated crude oil quantities to be processed in the following quarter Using this data, the FEO calculates a supply/capacity ratio for each refiner and a national average of supply/capacity ratio. FEO than publishes a "Buy-Sell" list in the Federal Register which authorizes all refiners below the national supply/capacity average to purchase crude oil from those refiners above the national average. A 15-day period is allowed for refiners to buy and sell crude oil in response to the published FEO list, using normal business procedures. At the end of this period, each refiner reports all crude oil transactions which have been negotiated in response to the "Buy-Sell" list. Any refiner who has been unable to purchase sufficient quantities of crude oil to raise his supply/capacity ratio to the national average may then request that specific mandatory sales be reorded by the FEO.

After examining the circum

stances of these situations, FEO may direct specific crude oil sales among refiners.

(3) Refinery Yield Control

To ensure adequate supplies of aviation fuels, middle distil

lates, residual fuels, and petrochemical feedstocks, the total supply of gasoline produced in the United States may be limited to a portion of the 1972 production level. This percentage is subject to quarterly change by the FEO. Two or more refiners may request authorization to produce their combined allocations on a pooled basis. A refiner may request authorization for an exception to the mandatory refinery yield control program because of refinery equipment limitations, the quality of crude feedstocks available, or other similar problems.