You may not believe this, but it is turning out to be awfully hard for the government to play petroleum Robin Hood -- taking money from the rich oil companies and giving it back to the poor people who were supposedly overcharged for their gasoline, heating oil or electricity from oil-fired power plants.
The Department of Energy's Office of the Special Counsel for Compliance has been auditing 34 major refiners to determine if they were obeying DOE regulations on petroleum prices and allocations between 1973 and 1980. It probably will come as no surprise, because the program has had a good deal of publicity, that the OSC auditors have said they found overcharges which ran to the billions of dollars.
Negotiations then ensued as to what was to be done about such findings. OSC's aim was to somehow get the refiners to admit their wrongdoing and arrange for the overcharges to be returned in some form to the people who paid them. Some of the big refiners, like Texaco, have fought OSC and now are in court. Last week there was a flurry when it was discovered that $4 million of a $100 million settlement with Standard Oil Co. (Indiana) was gallantly passed out in the closing days of the Carter administration by OSC's special counsel, Paul Bloom, to four charities which were to distribute the funds to what Bloom called "the most acutely needy."
Bloom also signed additional proposed settlements with nine smaller refiners on Jan. 19, the day before President Reagan's inauguration. The were carried in the Jan. 26 Federal Register (pages 8094-8104) as "proposed consent orders" that will be finalized only after a period in which the public has a right to comment.
The major irony of the Bloom approach is that almost each company was required to reduce the amounts of future price increases it could have under the federal oil price control program, in amounts that run into the hundreds of millions of dollars. This was by far the biggest single return program and one that would directly reach individual purchasers. However, the federal oil price control program was ended by President Reagan Jan. 28, making that particular provision in OSC's settlements meaningless.
Here are other ways OSC's Bloom wants to play Robin Hood in the cases of several of the nine companies:
The Charter Co. is to make refunds totaling $15 million to "certain purchasers of residual fuel oil," issue credits of $3.3 million each quarter for three quarters to "its current utility customers" and set up an escrow account of $3.2 million at the First National Bank of Boston that "shall be disbursed at the director of OCS."
Amerada Hess Corp. is to refund $32 million to public utility and state and local government purchasers of fuel oil products, and those institutions are to find a means of lowering costs to purchasers and users. Additionally, $3 million is to be paid to the Defense Fuel Supply Center, and before Dec. 31, 1982, the company is to invest $400 million for new production or recovery capacity. Some penalty.
Ashland Oil Inc. is to establish a $10 million interest-bearing escrow account and use it to repay "motor gasoline reseller customers" who file for that money and "assert a claim against Ashland for alleged violations" of the federal pricing regulations. Ashland also is to reduce by $15 million the price it charges certain public utility and other home heating oil customers.
Tenneco Oil Co. will send $4 million to OSC for distribution through a special fund to individual claimants who believe they were overcharged. Pennzoil will put $3 million with OSC in a similar program.
Koch Industries Inc., a Kansas refiner that operates its own service stations, will introduce a 3-cents-per-gallon price reduction until $2 million has been refunded. It will also refund $4 million to "certain utility customers," another $4 million to certain state or local government or transportation customers and $4 million for other customers whose claims are subject to OSC approval.
OSC employes say they have made a concerted effort to make certain that the payments to utilities, for example, result in lower costs to consumers. But other than making Koch lower its per-gallon price, they could figure out no way to be certain individual gas purchasers benefit from their program.