95,000 barrels of crude oil per day.
16. Exxon sought administrative relief from the FEO from the provisions of the December 1 Regulation. The request for administrative relief from the FEA eventually took the form of a request for an exception from the December 1 Regulation.
17. Exxon's request for an exception described in paragraph 15 above was denied by the FEA on June 14, 1974. Exxon appealed the decision of the FEA and such appeal was denied on June 26, 1974, by the FEA.
18. Section 4(a) of the Petroleum Act directed the FEO to issue regulations to provide for the mandatory allocation of, among others, crude oil.
19. Sections 4(b)(1)(A) through (I) of the Petroleum Act set forth broad objectives which the regulations, mentioned in paragraph 17 above, were to provide for the maximum extent practicable.
20. Section 4(c) of the Petroleum Act provides in pertinent part, that the regulations mentioned in paragraph 17 above, to the extent practicable and consistent with the objectives of Sections 4(b) and 4(d) of the Petroleum Act, should result in the allocation of crude oil to each small and independent refiner in an amount not less than the amount sold or otherwise supplied to such refiners during the corresponding period of 1972, adjusted to take into account any existing overall shortages. The terms "small refiners" and "independent refiner" are specifically defined in Section 3 of the Petroleum Act.
21. Exxon, by its motion for a preliminary injunction, requests an injunction against its obligation to sell approximately 130,000 barrels of crude oil per day under the December 1 Regulation. In the alternative, Exxon requests an injunction against its obligation to sell 95,000 barrels of crude oil per day under the Buy/Sell Regulation.
22. The December 1 Regulation and the Buy/Sell Regulation were implemented by the FEA to accomplish different objectives. The December 1 Regulation was implemented to continue supplier/purchaser relationships existing on December 1, 1974, within the whole petroleum industry and prevent a disruption in the existing distribution system for domestic crude oil. The December 1 Regulation, furthermore, was implemented to assure small and independent refiners continued access to lower-cost domestic crude oil. The December 1 Regulation, furthermore, was implemented to provide a foundation upon which a mandatory allocation program could be implemented by the FEA.
23. The Buy/Sell Regulation provides for allocation of crude oil solely among refiners. The Buy/Sell Regulation in existence for the first allocation quarter (February 1 to April 30, 1974) and then extended through May 31, 1974) was implemented to assure adequate supplies of crude oil for all refiners who were experiencing deficiencies of crude oil during that period of time. The Buy/Sell Regulation in existence for the current allocation quarter is designed to continue supplying crude oil only to small and independent refiners in accordance with Section 4(c)(1) of the Petroleum Act. The refiners who are eligible to purchase crude oil under the current Buy/Sell Regulation are only those refiners who fall within the definition of a small or independent refiner under Section 3 of the Petroleum Act.
24. Exxon has not made a sufficient showing that it incurs an actual monetary loss for the oil it is required to sell under the December 1 Regulation, nor that such loss, if any, would be irreparable.
25. Exxon has not made a sufficient showing that it incurs an actual monetary loss for the oil it is required to sell under the Buy/Sell Regulation, nor that such loss, if any would be irreparable.
26. Exxon also alleges a monetary loss based upon their claim that foreign crude oil which Exxon purchases for its own refinery runs to replace crude oil sold under either the December 1 Regulation or the Buy/Sell Regulation is more expensive than the crude oil which it is required to sell to small and independent refiners under either the December 1 Regulation or the Buy/Sell Regulation. Exxon's claim of monetary loss, however, is problematical and is not sufficient to establish a finding of irreparable harm, because FEA's pricing regulations permit Exxon to recover all such increased product costs, on a dollar-for-dollar pass-through basis, in the prices Exxon charges for its refined petroleum products. Major refiners as a whole have lower weighted average crude oil costs than small and independent refineries. Exxon, furthermore, has one of the lowest weighted average crude oil costs of all major refiners.
CONCLUSIONS OF LAW
1. This Court has jurisdiction over this action under Section 5(a) of the Petroleum Act.
2. Exxon has not demonstrated a substantial likelihood of success upon the merits of this action.
3. Exxon has not demonstrated that it is suffering irreparable injury.
4. Exxon has not demonstrated that its injury, if any, outweighs the injury which defendants, interveners and the public interest would incur should a preliminary injunction be issued.
5. Defendants and interveners have demonstrated that they, and the public interest, would be irreparably harmed if a preliminary injunction is granted to Exxon.
6. Exxon's motion for a preliminary injunction against either the December 1 Regulation or the Buy/Sell Regulation should be denied.
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