THE MOBIL CORPORATION thinks that the process of news selection is tilted against the oil companies. It published ads recently to protest the omission, from this newspaper and most others, of any notice of one particular legal decision that it had won. The accusations of overcharging regularly get published, Mobil objected, but hardly anybody took notice when, in this instance, the oil company turned out to be right. Our enduring critic Reed Irvine -- whose letter appears elsewhere on this page -- asks for an explanation. We are happy to oblige.
The allocation of oil supplies, and the oil price controls, have generated an enormous volume of federal regulation that, in its depth and complexity, now approaches the income tax law. As in tax law, many of the regulations are far from clear in their application to specific cases. As in tax law, there are large amounts of money at stake over even minor points. As in tax law, frequently a company or the government will go to court to obtain a definitive interpretation. That's what courts are for. But most of this vast flow of litigation will interest only the lawyers who specialize in the field.
Mobil's present example, we think, illustrates that obscurity. Price controls require the controllers to compute a cost of production for each of a refinery's products. That means allocating the cost of running the refinery among the various products -- gasoline, heating oil and so on. This allocation of costs is necessarily, in some degree, arbitrary. Mobil's case involved the share of refining cost that the government assigned to petroleum coke.
Too much of the cost was assigned to coke, Mobil claimed. This rule, it said, cost the company more than $200 million over the past five years. That's hardly a large proportion of Mobil's business; the company's sales last year were $35 billion. But it's a lot of money even for a big company, and Mobil asked the government for an exemption. It was denied. Mobil went to court and, last month, an appellate court held that Mobil was right and the rule was flawed.
Should The Post have printed this story as news? The criteria here are similar to those for, once again, tax court cases. Do people beyond the specialists need to know about the decision? Does it have any deep general meaning for the law, or for the equities that lie behind the law? Will the decision significantly affect the industry, or its customers? We leave the answer to our readers' judgment.
But beyond this particular instance, there is one issue on which Mobil and the oil industry are quite right. The Department of Energy has publicly brought claims of oil price violations that, cumulatively, come to more than $10 billion. Some of these claims are very significant indeed and have been widely reported. When newspapers report that the government has brought a claim against a company, it follows that those newspapers, including this one, have an obligation to report the final outcome regardless of which side wins.