Petrochemical feedstocks are defined as crude oil,

residual fuel oils, and refined petroleum products which are processed in a petrochemical plant, and are the starting ingredients in a variety of industrial production processes in the petrochemical industry. The production of thousands of everyday products as diversified as shoe soles and vitamins are dependent upon the availability of petrochemical feedstocks. The program is expected to afford significant relief to those users of petrochemicals who may currently be experiencing shortages, and/or may be unable to obtain sufficient feedstocks within current ceiling prices.

(2) Allocation Levels

To the maximum extent practicable, the allocation to a
petrochemical producer shall be 100% of his current requirement,
allowing for nonallocated supplies which may be used to meet
part of these requirements.

propane and

The Petrochemical Feedstocks Allocation Program will be administered nationally by the Federal Energy Office, and will cover the basic refined petroleum product feedstocks naphtha, gas oil, kerosene, and heavy aromatic gas oil used for the production of carbon black. Two other major feedstocks crude oil itself The will be allocated under separate programs. intent of the program is to maintain normal economic patterns, thus, where no extreme or inequitable shortages occur, normal supplier-user relationships will prevail and controls will not be imposed. When a petrochemical producer is unable to obtain sufficient feedstocks at or below ceiling prices, an application to FEO may be made to

(a) request approval of an over-ceiling price at up to 115% of
the otherwise-applicable base price, (b) request assignment of a
supplier from those to which the petrochemical producer has sub-
mitted a bid, or (c) both.

These applications should be directed to the Federal Energy
Office, Petrochemical Feedstocks Fuel Manager, P.O. Box 2885,
Washington, D. C. 20013 (on Form FEO-600, available from the
same address).

(4) Method of Allocation

Priority in assigning suppliers will be given to producers whose traditional suppliers cannot meet their contractual obligations and to producers attempting to restore production to the 1972 level. Lower priority will be assigned to producers seeking to expand beyond these levels.

The allocation program does not cover either intermediate products (e.g., ethylene, propylene, and butylene) or the chemicals derived from the petroleum feedstocks. However, the regulatory

distribution system is directed toward maintaining a steady flow of necessary feedstocks which will ultimately ensure the continued availability to the consumer of such final products as drugs, aspirin, pharmaceuticals, synthetic rubber, antifreeze, films, latex paints, paint thinners, shoe soles, paper coating, adhesives, insecticides, varnishes, resins, perfumes, flavoring, synthetic detergents, solvents, explosives (TNT), herbicides, foam padding, cushions, insulation, clothing, vitamins, hydraulic fluids, plastic bottles, plastic bags, plastic pipes, and gasoline additives, as well as many others. (5)

State Set-Aside

There is no State set-aside for petrochemical feedstocks.

The residual fuel oil program provides for the mandatory allocation of all residual fuel oil produced in or imported into the United States. This includes all #4, #5, and #6 fuel oils, Bunker C, Navy Special Fuel Oil, crude oil when burned directly as a fuel and all other fuel oils which have a 50% boiling point over 700°F in the ASTM D-86 standard distillation test. Bonded residual fuel oil is specifically excluded.

(2) Allocation Levels and Priorities

Allocation levels for non-utility uses are as follows (priority is without regard to order of listing):

Agricultural production

Emergency services

Energy production

Manufacture of ethical drugs and related research

Nonmilitary marine shipping, foreign and domestic
(except cruise ships carrying passengers for recrea-
tional purposes). Sales to vessels engaged in the
foreign trade of the United States shall be made on a
non-discriminatory basis in regard to flag of regis-
tration. Such policy shall be subject to modification
by the FEO following consultation with appropriate
Federal agencies on a case-by-case basis if required
to encourage reciprocal non-discriminatory allocation
of bunker fuels in foreign ports to vessels engaged
primarily in the foreign trade of the United States.

Sanitation services

Telecommunications

Passenger transportation services

1.

Industrial and All Other Users 100% of base period
volume. This includes all other non-utility users of
residual fuel oil not covered elsewhere in the program.
"Base Period" for residual fuel oil means the corres-
ponding month of 1973 for all non-utility users.

Allocation for electric utilities will be specified monthly
by FEO and may fluctuate depending upon total shortfall. The
FEO, with the assistance of the Federal Power Commission, will
determine the extent of reduction in electricity generation if
if required. To the extent practicable, each utility within ap-
propriate groupings shall absorb an equal percentage cutback in
electicity generation.

(3) Supplier/Purchaser Relationships

All suppliers of residual fuel oil must supply all of their non-utility wholesale purchasers of record as of the corresponding month of 1973.

The FEO may order suppliers of residual fuel oil to sell to other suppliers or end-users in order to alleviate imbalances. FEO may also order the transfer of residual fuel oil from one area to another, reassign purchasers, or make other adjustments as necessary to achieve a more equitable distribution of residual fuel oil.

Each user must reduce his ambient indoor temperature by the appropriate amount, or take other actions which shall result in a fuel savings that should be achieved by the specified reduction.