The Department of Energy, in a private report ordered by the White House in May, has basically exonerated the oil industry of charges that it deliberately hoarded gasoline supplies to create a shortage.
The report, which the White House has not made public, instead places considerable blame for the gasoline shortages on the Carter administration's allocation program.
The Justice Department, which was asked to investigate whether the oil companies have entered into a conspiracy or otherwise violated antitrust laws, has made no written report to the White House. But informed sources said Justice has turned up no evidence of violations so far.
President Carter requested both investigations after California began experiencing gasoline lines.
A copy of the Energy Department report was obtained by The Washington Post.White House press secretary Jody Powell said yesterday that, in keeping with a promise Carter made when he ordered the investigations, the DOE report will be made public soon.
"DOE has not found evidence of horading of oil by refiners, but some refiners have been conservative in their use of stocks," the report said. "This conservatism appears to be due in large part to their pessimistic views about future availability of oil imports."
Because the industry had drawn down inventories during 1978, keeping total available supplies at year-earlier levels from February to May, oil imports needed to be about 800,000 barrels a day higher than they actually were, it said.
U.S. companies were able to import about 200,000 fewer barrels a day during those months than if they had received their normal share of the oil moving in international trade. "This may have been due in part to requests by the U.S. government to exercise restraint in purchasing higher priced oil on the spot market in order to avoid bidding up world oil prices," the report acknowledged.
Meanwhile, domestic production of crude oil was running about 215,000 barrels a day lower than in 1978 for the same period, the report said.
Regarding last year's drawing down of inventories, which has been cited by some critics as evidence of a desire to create a shortage, the report continued, "it appears that this was done because they were abnormally high in late 1977 and early 1978."
A sharp drop in gasoline stocks by the end of last summer may have been the result of high gasoline demand which "surprised the refiners," it said, noting that refiners responded by increasing refinery runs "significantly" in the second half of the year.
Another factor cited by the report as contributing to the shortage of gasoline this spring was a reduction in refiners yields of gasoline and heating oil to meet demand for other "light" products, including jet fuel, kerosene and petrochemical feedstocks.
"If gasoline and distillate (heating oil) yields combined could have been increased by 2.5 percent, it would have resulted in an additional 358,000 barrels per day of those two products," the report said.
"Several of the larger refiners indicated that they were fulfilling their contractual commitments to supply petrochemical feedstock.... It also is possible that it is more profitable for refiners to maintain or increase the other light products at the expense of gasoline because of the federal price control regulations on gasoline," the report declared.
Price controls, and the related allocation program, contributed to the shortages, the report explained, because "an historical demand base period inherently cannot reflect the most recent changes in demand for gasoline.... Any allocation system is likely to be ineffective in responding quickly to continuing changes in demand."
Under the allocation system some middlemen were getting more gasoline than they needed, and it was eventually being resold to refiners who then distributed it under their own allocations to customers, the report said. Because of these unnecessary transfers required by the allocation system, the process itself "may have contributed to delays in moving gasoline from refiners to motorists."
The report also cited two other ways in which the allocation system reduced supplies available to motorists.
First, farmers, emergency-vehicle operators and other users were given priority access. "There are some indications that the priority status was abused by some priority users who received more fuel than their current needs warranted, and then resold the excess gasoline or stored it as a hedge against future shortages," it said.
Second, "The changes made in the gasoline allocation regulations, in an attempt to more accurately reflect current usage patterns, may have in themselves resulted in delays in distribution of gasoline," the report said.
President Carter had asked for a report on California's situation. The report said, "The actions by refiners in California and the remainder of the West Coast appear to be similar to the rest of the country." DOE explained that it had expanded the inquiry to the entire country since the oil industry is national in scope and it is impossible to treat a single state's situation separately.
DOE told Carter it intends to continue to investigate four specific questions:
Why crude oil stocks were higher at some refineries in May than in January. "The further investigation will explore potential reasons for the reluctance of particular refiners to reduce crude oil stocks to lower levels, to determine whether any federal actions are contributing to this, including tax laws or rulings or price guidelines."
Why the yields of gasoline and distillate declined.
Why quantities of gasoline have been available for sale to refiners and others outside the gasoline allocation system. "An intensive investigation of the allocation process is now under way by the DOE's general counsel's office, together with the Office of Enforcement and the Office of Special Counsel in the Economic Regulatory Administration."
Whether gasoline or other petroleum has been stockpiled by jobbers, distributors or dealers.
The report notes that DOE is separately conducting a 1979 compliance audit of the largest refiners under the allocation and pricing regulations. Since that audit is not complete, the report "does not contain any conclusion as to the lawfulness of any particular company's actions or inactions."