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<br />r-" ''"\ <br /> <br />2-9 <br /> <br /> <br />in December 1975, was the result of Congress- <br />EPCA actually amended EPAA and extended <br />regulatory authority to continue the imposition of EPAA pricing and alloca- <br />tion controls; however, the EPCA contained provisions for phasing out the <br />control programs entirely beginning 40 months after enactment, in April <br />1979. <br /> <br />programs. EPCA, enacted <br />lonal revision of EPAA.25 <br /> <br />2.2.5.1 Pricing Controls Under EPCA. Under EPCA, Congress statutorily <br />required the President to amend current regulations so that the "maximum <br />weighted first sale average price" of all domestic oil would be $7.66 per <br />barrel and would remain so for the succeeding 39 months except for specific <br />price adjustments defined in EPCA.26 <br />To achieve the composite price, FEA estimated that 60 per cent of all <br />production was old oil (renamed lower tier oil) while 40 per cent was new <br />and stripper oil (renamed upper tier oil). The monthly prices that actually <br />developed under the program were higher than $7.66 per barrel and oil <br />companies were therefore charging overages. FEA froze all petroleum <br />prices between June 1976 and September 1977 when it calculated that all <br />27 <br />overages had been properly refunded. <br />The statutory adjustments in EPCA allowed an annual 7 per cent <br />increase in prices to offset inflation and an additional 3 per cent increase <br />as an incentive to exploration and new production. For nearly 4 years, <br />FEA consistently disallowed many of the allowable increases claiming that <br />resultant inflationary impacts could not be offset by the benefits of increased <br />production. <br />Naval Petroleum Reserve and heavy oils were exempted from price <br />control s. Production from Alaskan reserves does fall under price controls, <br />but procedures used to determine this price are separate from that of <br />other oil classes. The wellhead price for Alaskan crude is its refinery <br />. . t t t' t 28 <br />price minus ranspor a Ion cos s. <br />FEA continued to administer the price and allocation programs through- <br />out 1976 and most of 1977. During this period, some modifications were <br />made which reflected the EPCA goals of increasing domestic production. <br />