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automatically, they think old Abe is making an additional 4 cents a gallon, and I wish they were right, but it's not right. I'm passing on what's it's been increased to me, and I did, on the 10th day of this month, I received an additional 6 cents a gallon increase from Phillips on gasoline, and the only thing I ever read in the paper, I think, was 2 cents that was authorized, but then maybe this is a bad misquote. I don't know.

Senator TUNNEY. Isn't the Internal Revenue Service supposed to be checking these price increases?

Mr. SEABOLT. Well, I read in the paper where they're checking us to make sure that we're not, you know-we're certainly not making more than we're supposed to be making, but now whether they're checking the oil companies or not, I don't know.

I read daily where some little station operator is being nailed, he's a penny off, he's a penny off.

Senator TUNNEY. It would be interesting to find out. I hope that during the course of these hearings we will be able to discover whether or not the Internal Revenue Service is checking the companies themselves that are supplying the fuel to the suppliers, and find out if they're living up to the price ceilings that have been established by the Energy Office.

Mr. SEABOLT. Right, because like I say, all we know is what we read in the paper, and they may be misquotes, but I know my increases have been far greater than what I read in the paper and I'm anticipating, and then it's the poor dealer that the farmer or the general public comes in and takes his hostility out on. He's read the same thing I've read in the paper, but I pass on a considerably larger amount to him, and

Senator TUNNEY. Mr. Seabolt, I appreciate the testimony that you've given. It helps us better understand the problems at the grass roots level; what is happening to the average person who suddenly is concerned with huge increases in the cost of fuel and does not have adequate fuel available even though the law, as prepared by the Federal Energy Office, states that there should be 100 percent of requirements supplied for the agricultural industry. It just isn't working that way, is it?

Mr. SEABOLT. No, no; it isn't.

Senator TUNNEY. Well, thank you very much.

Mr. SEABOLT. Thank you for the opportunity.

The testimony resumes on p. 42. Prepared statement by Mr. Seabolt follows.]



Brawley, Calif., January 17, 1974.

Chairman, U.S. Senate, Committee on the Judiciary Subcommittee on Representation of Citizen Interests, State Office Building, 1350 Front Street, San Diego, Calif.

I address the following testimony to the hearing entitled "Citizen Redress Under the Fuel Allocation Program."

I am a wholesale distributor of petroleum products to farm accounts. My parent company is Phillips Petroleum Company.

I did not have problems securing product until December, 1973. In December I received a telephone call stating I would be cut 15% on my gasoline quota

based on 1972 figures also I was informed I would be cut 30% on my diesel allocation for the same period. This resulted in a tremendous shortage to my farmers. In order to serve my farmers I was forced to borrow product against my January allocation. The total amount borrowed was 19,000 gallons of gasoline of which 16,000 gallons was used in December to keep the farmers going and 30,000 gallons of diesel of which the entire amount was used in December.

During the month of December there were eleven farmers who made additional requests for fuel through the following agency:

United States Department of Interior

Office of Oil & Gas

Petroleum Allocation Division

Application to State for Exceptional
Hardship Assistance

Out of eleven requests four were granted. What happened to the others I do not know.

Seven requests were made for gasoline to the same agency and we were told by them that they had no authority to grant this and consequently no relief was available to the farmer.

In the month of January we have made thirteen requests for diesel fuel to the same agency and two have been processed. We received confirmation on the two January 17, 1974. As you can tell, there is an extreme problem getting the forms processed and obtaining fuel. I present the following as a case in point: Dan Cameron Livestock

P.O. Box 1

Brawley, California

The above mentioned person has purchased farm ground in the Northern portion of Imperial Valley and does not have a 1972 allocation. He contacted me the early part of November to see if I could supply him at which time I advised him I could not. I explained to him the necessary forms he would have to fill out. These forms were submitted November 14, 1973. On January 10, 1974, the aforementioned agency telephoned me stating the fuel requested by Dan Cameron had been granted and the necessary papers were being sent to my supplier (Phillips Petroleum Company). I called my supplier to get the product released a total of three different times-each time they informed me they had never received word. January 17, 1974, the Interior Dept. telephoned again stating the forms had been sent to the wrong supplier (Sunland Refinery in Bakersfield, Calif.), they apologized and said they were re-submitting the forms to my supplier (Phillips Petroleum Company), but, to date, Mr. Cameron still does not have product.

My personal costs have increased tremendously over the past five months. Since the start of this program I have had to hire extra office help, the cost to me has risen tremendously on all petroleum products and to a small businessman such as me, the increased costs are staggering with no relief in sight. As you are well aware, our growth has been eliminated.

I have had communication with the following:

Senator Alan Cranston

Senator John Tunney

Congressman Victor Veysey

United States Dept. of Interior

Phillips Petroleum Company

without being able to obtain relief for said farmers. I appear before this hearing on the request of Senator John Tunney and I sincerely appreciate anything this committee might do to alleviate this problem.



Brawley, Calif., January 15, 1974.


c/o Senator John V. Tunney,

325 West "F" Street,

San Diego, Calif.

GENTLEMEN: In order to assist in the work of your Committee, I wish to state the following with regard to my problems with obtaining a diesel fuel allocation for my farming operation.

In 1972 I owned and farmed a small amount of land, however, I subsequently purchased more land and, in order to most efficiently farm this land, I also purchased a sprinkler irrigation system which is powered by a diesel pump. This pump requires approximately 192 gallons of diesel per day (24 hours).

Because of the limited nature of my farming operations in 1972, I had no diesel fuel allocation and on November 14, 1973, I filed Form PAP 20 with the State of California and Form PAP 17 with the Federal Office of Oil and Gas in San Francisco. Although I repeatedly tried to check on the status of my applications to these offices, it seemed impossible to get an answer from any source. On December 21, 1973 a man called from the Sacramento Office of Oil and Gas and said that he was processing my application for a hardship allocation but that it would be for the balance of December 1973 only. He asked how much I would need for the remainder of the month and I told him it would take approximately 2000 gallons. He said they would go ahead with my application for that amount. He also stated that beginning January 1, 1974, all allocation applications would be handled by the Federal office. I told him that I had filed for a long-range allocation on Form PAP 17 to the Federal government and his comment was "That's good-you'll be ahead of the game." The next day my application to the Federal office came back advising me that they were starting all over with a new program.

On December 31st I received approval of my hardship allocation application for December 1973 in the amount of 2,000 gallons. I went to my supplier, Union Oil Company in Calipatria, California, and he had no diesel fuel to sell.

If I can answer any specific questions, I will be happy to do so and will cooperate in any way possible to bring about a better situation for agricultural fuel supply.



Senator TUNNEY. Our next witness is Mr. Jerry Lewis, director of distribution, Phillips Petroleum Co., San Mateo.

Is Mr. Lewis here?

Would staff please state what they know about Mr. Lewis's whereabouts?

Mr. BURNS. I contacted the office of Mr. Lewis by telephone and was told that he would be here and that's all I know.

Senator TUNNEY. When?

Mr. BURNS. A week ago Monday.

Senator TUNNEY. On January 11, Mr. Lewis was sent a letter of invitation to appear before the committee at this time and this place. and you indicate that in a telephone conversation that you had with his assistant, in the past week, he indicated he'd be here. Mr. BURNS. That's right.

Senator TUNNEY. Well, I wonder where he is?

All right, in the meantime, our next witness is Mr. Clare McGhan, manager, Fresno County Farm Bureau.

Would you please call Mr. Lewis's office and find out where he is? Please proceed, sir.*


Mr. McGHAN. Senator Tunney, I'm glad to be here this morning. I'm Clare McGhan, secretary-manager of the Fresno County Farm Bureau.

We are an organization in Fresno County of about a little over 4,800 members, and I'm here primarily to talk about the problems

*See Appendix, page 55, for letter from Jerry Lewis explaining his absence.

of the small grower, or small farmer over the past couple of months with the problem of getting fuel.

I don't have a prepared statement, Senator Tunney, due to the fact that I didn't know until about 5 o'clock Friday night that I was coming down, and so I do have an outline and I'll briefly state some of these points that I mentioned to you last week in Fresno, and then perhaps, if you have some questions we can amplify on these. It was perculiar that as of-seemingly as of November 1, we had a fuel shortage. Up until that time, everyone was getting fuel generally speaking, maybe not getting their tanks completely filled, but, in most cases, were getting enough to continue to operate.

Then, as soon as the notice came out that there was to be quotas and allocations in regards to 1972 useage, we had a shortage, almost immediately.

In trying to solve the problem, then, of course, we heard that we were supposed to get the allocation forms, which I have copies of here, and I'm sure you've seen-we were to get these forms from the ASCS office.

In calling the ASCS office, they didn't have the forms. They had heard the news report also, that they were supposed to have had them, but they didn't have them.

In doing some calling, then we found out that there was an energy office in Sacramento, which had to do with the immediate needs, or, if you were out right now, you were supposed to go through that office, and then an office in San Francisco, if you had a long-term need, and so the forms were received and those who needed fuel filled out the forms and sent them in, and then they proceeded to wait.

I might just give you the history of one case, which specifically I am aware of, in which there was a grower in our area who had bought additional land and had sold his cotton on futures for next year.

This was alfalfa land, and he needed to get on it as soon as possible to start working it up so he'd be ready to plant this coming spring.

He didn't have the fuel. He needed 500 gallons of diesel, which isn't a great deal, but he had to have it in order to work this ground.

He sent the forms through to the Sacramento office. About a week later, he received a letter from the Sacramento office that he had been granted 500 gallons of diesel.

He went to his local dealer and distributor, and said that, "Here is the letter that I have saying that I can get the 500 gallons of fuel."

The local dealer says, "I'm sorry, I don't have the 500 gallons. I haven't heard anything, and I can't give it to you," so he waited another week or so and then proceeded to call me again and asked what happened, so then we started calling.

Well, in calling the State office they said at the fuel energy office in Sacramento,

We made a mistake. This letter should have gone to the supplier and not to you. We will correct the mistake,

so we waited a few more days and then proceeded to call the headquarters of the company in California, who then, after much problem of getting to the right person said,

All of these requests were sent to our national offices and we don't have them here.

We then put a call through to the national offices and they said, Yes, we received all of these from the State office. We don't know why they sent them to us. We have packaged them up and sent them all back to the State office.

Well, he filled out these forms almost immediately in November, as quick as he could get the forms.

It was after Christmas in December, between Christmas and New Year's he finally received his 500 gallons of fuel.

This is the concern, I think, that we in agriculture have. When they have said that, prior to this, we could get 100 percent of our 1972 usage, and now they come up and say "yes, you can get 100 percent of your needs," but when you go to get the fuel, the distributor says, "I don't have it. I can't furnish you with it," this is of real concern to agriculture.

Those people that have had problems in getting fuel up to nowand I don't know why or how this is going to work as of the announcement last week. Following are problems: Those who started. farming in 1973 that didn't have any previous usage can not get a dealer, in most cases, to even talk to them, and so they can't even indicate a dealer when they send in the forms, because some of the dealers were very apprehensive about saying, "Yes, use my name and I'll get you the fuel," because their experience has been they don't get the fuel even though the allocation has been made.

We've had some dealers who have quit delivering, and I believe the law says the're not supposed to just quit like this, but, on the other hand, they have quit. They're not out of business, they've just quit delivering.

In one case that I know of specifically, this happens to do with Watts Valley, which is probably not familiar to you folks, but it's about 30 miles northeast of Fresno. It's up in the foothill area. It does take a run. There are no dealers up in that area, but these people were just told by the dealer that he would no longer service them.

Those who have new acreage can not get additional allocations. Another problem that was very peculiar was a person who had in the past paid cash for his fuel and the dealers then said when he came to them for an allocation, "I don't know you. You're not on the books, and I don't have any record of servicing you before."

We've had the other case where a person or persons who were leasing their property and then they decided to farm it themselves found that the fuel allocation went with the person and not with the land, and although it was their land, they could not get an allocation, and were without fuel, and although diesel was the allocated fuel, they were without gasoline also.

Another problem that occurred this last year-we'll say that agriculture in our area had a good year, they made some money, and

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