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<br />The Federal government's involvement in petroleum markets began in <br />the iate 1950's when security reports warned of potential problems due to <br />US dependence on foreign oil sources. The following subsection describes <br />the federal legislation and problems enacted since that time. <br /> <br />2.2.1 Mandatory Oil Import Program (MOIP) <br />The Mandatory Oil Import Program, enacted by proclamation in 1959 <br />under authority granted by the Trade Agreements Extension Act of 1955,1 <br />established allocation controls* in order to curtail US purchases of cheaper <br />foreign oil which were threatening the US petroleum industry. 2 Petroleum <br />allocation districts were defined for the entire US, and refiner quotas were <br />set based on historical purchases from both domestic and foreign sources. <br />Both imported petroleum and imported refinery products were covered <br />by the MOIP. The MOIP allowed refiners to buy and sell shares of their <br />respective quotas; however, as domestic production declined during the <br />1960's, demand could not be met by the established quotas and these were <br />modified.3 The MOl P quota system continued until March of 1973. <br />MOIP was modified in April 1973 to utilize a system of import fees.4 <br />Initially, only volumes above the old MOIP quotas were subject to the fees. <br />The fee amount was adjusted several times between 1973 and 1979.**5 The <br />June 23, 1980, revision6 extended through December 31, 1980, the suspension <br />of import fees in effect since April 1979. <br /> <br />2.2.2 Economic Stabilization Act of 1970 (ESA) <br />This statute granted the President discretionary authority to impose <br />price controls (as opposed to allocation controls) on all domestic commodi- <br />ties, including crude oil, natural gas, and natural gas liquids. 7 Admin- <br />istered by the Cost of Living Council (CLC), Phase I placed a freeze on <br /> <br />*Allocation controls aim to lessen the detrimental effects of resource <br />shortages by distributing limited supplies among all users. <br /> <br />**The original 1959 Presidential Proclamation has been amended 32 times. <br /> <br />2-3 <br /> <br />