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<br />the US may issue supply orders to US firms engaged in producing, dis. <br />tributing, refining, or storing petroleum such that the nation's obligations <br />under the I EP are met.21 <br /> <br />2.2.3.4 Price Allocation Under EPAA. A cost allocation program known as <br />the entitlements progrClm was instituted to distribute the benefits of con- <br />trolled low cost domestic oil and the impacts of high cost imported petroleum <br />among all purchasers.22 Seller-purchaser relationships had been frozen, <br />and refiners with historical supplies of lower tier oil could gain a significant <br />competitive advantage because new business entries would only have access <br />to new oil supplies at the higher market values. <br />The program requires all purchasers of crude petroleum to report the <br />composition of their monthly runs and the price of each type crude. ERA <br />then calculates the difference between the weighted average price of imported <br />oil and the weighted average price of domestic oil. This cost difference is <br />the value of an entitlement which is then either paid or collected by indi- <br />vidual refiners. <br /> <br />2.2.4 Fed.eral Energy Administration Act <br />The PEO regulated crude petroleum and refinery product prices <br />through April 1974 under the combined authorities of ESA and EPAA. On <br />May 7, 1974 Congress enacted the Federal Energy Administration Act (F!::A <br />Act) establishing the FEA as a regulatory agency that was more independent <br />of the Office of the president.23 The FEA Act contained a broad Congres- <br />sional mandate directing FEA to plan, conduct, and direct "such programs <br />related to the production, conservation, use, control, distribution, rationing, <br />and allocation of all forms of energy as appropriate... .,,24 The F!::A Act <br />also resulted in the agency having to operate in compliance with administra- <br />tive procedu res, to carry-out data collection, and to seek annual budget <br />authorizations. <br /> <br /> <br />2.2.5 Energy Policy and Conservation Act (EPCA) <br />Authorities under EPAA were to expire in August 1975, and Congress <br />took the opportunity to substantially revise the pricing and allocation <br /> <br />2-8 <br />