b'Legal Authorities Available to the President to Respond to a\nSevere Energy Supply Interruption or Other Substantial\nReduction in Available Petroleum Products\n[The follow ing m em orandum , prepared for the P resident for transm ission to Congress in accordance\nwith the direction in \xc2\xa7 3 of the E nergy Em ergency Preparedness Act of 1982, describes in\ncom prehensive fashion the authorities available to the President under existing statutes to respond\nto a severe energy supply shortage o r interruption. It sets forth the legal basis for certain specific\nem ergency preparedness activities, discusses the scope of each available em ergency authority, and\nanalyzes the differing threshold standards for activation o f the President\xe2\x80\x99s authority under each of\nthe statutes involved.]\n\nNovember 15, 1982\n\nTABLE OF CONTENTS\n\nTABLE OF CONTENTS\nGLOSSARY OF ABBREVIATIONS\nINTRODUCTION\nI. STATUTORY AUTHORITIES\nA. Energy Policy and Conservation Act\n1. \xc2\xa7 103. Limitations on Exports\n2. \xc2\xa7 106. Accelerated Production Rates\n3. \xc2\xa7\xc2\xa7 151-161. Strategic Petroleum Reserve\na. Establishment of the SPR\nb. Filling the SPR\nc. Drawdown and Distribution of the SPR\n4. \xc2\xa7\xc2\xa7 201-202. Energy Conservation Contingency Plans\n5. \xc2\xa7\xc2\xa7 251, 252, 254. Authorities in Support of the Allocation and\nInformation Provisions of the IEP\na. \xc2\xa7 251. International Allocation\nb. \xc2\xa7 252. Antitrust Defense\nc. \xc2\xa7 254. Exchange of Information with the International\nEnergy Agency\n644\n\n\x0cB. Defense Production Act of 1950\n1. \xc2\xa7 101(a). Priority Performance of Contracts and Allocation of\nMaterials\n2. \xc2\xa7 101(c). Maximizing Domestic Energy Supplies\n3. \xc2\xa7 708. Voluntary Agreements\n4. \xc2\xa7 710. Employment of Persons from the Private Sector\na. Circumstances Governing Use of Employees\nb. Conflict-of-interest and Antitrust Restrictions\n1) Conflict-of-interest Restrictions\n2) Antitrust Exposure\nC. Trade Expansion Act of 1962\nD. International Emergency Economic Powers Act\nE. Emergency Energy Conservation Act of 1979\nF. Export Administration Act of 1979\nG. Other Statutory Authorities\n1. Fuel Switching Authorities\n2. Miscellaneous Statutes\nII. LEGAL BASES FOR SPECIFIED ENERGY PREPAREDNESS\nACTIVITIES\nA. Authority to Implement the 1EP\n1. Obligations Imposed by the IEP Agreement\na. Emergency Reserves (Chapter I)\nb. Demand Restraint (Chapter II)\nc. Oil Sharing (Chapter III)\nd. Information Exchange (Chapter V)\n2. Activation of the IEP Emergency System\n3. Statutory Authority to Implement the IEP Agreement\na. Emergency Reserves\nb. Demand Restraint Measures\nc. Oil Sharing\nd. Information Exchange\n4. December 10, 1981, Decision of the Governing Board with\nRespect to Subcrisis Activities\n5. National Emergency Sharing Organization\n6. Emergency Sharing System\n7. Supply Rights Project\nB. Authority to Fulfill NATO Obligations\nC. Authority with Respect to Development and Use of the SPR\nD. Authority for Government Incentives to Encourage Private\nPetroleum Product Stocks\nE. Authority for Reactivation of the Executive Reserve\nF. Authority for Coordination with State and Local Governments\n1. Preemption of State Laws and Regulations\n2. Burden on Interstate Commerce\nG. Authority for Public Information Activities\n645\n\n\x0cUI. TRIGGERS FOR EXERCISE OF STATUTORY AUTHORITIES\nA. Situations Involving War, International Tensions That Threaten\nNational Security, and Other Presidentially Declared Emergencies\nB. Events Resulting in Activation of the International Energy Program\nC. Less Severe Events or Situations\nIV. CONCLUSION\n\n646\n\n\x0cGLOSSARY OF ABBREVIATIONS\nDPA\n\nDefense Production Act of 1950\n\nEAA\n\nExport Administration Act of 1979\n\nEECA\n\nEmergency Energy Conservation Act of 1979\n\nEEPA\n\nEnergy Emergency Preparedness Act of 1982\n\nEPAA\n\nEmergency Petroleum Allocation Act of 1975\n\nEPCA\n\nEnergy Policy and Conservation Act\n\nESA\n\nEnergy Security Act\n\nFEMA Federal Emergency Management Agency\nFERC\n\nFederal Energy Regulatory Commission\n\nFPA\n\nFederal Power Act\n\nFPM\n\nFederal Personnel Manual\n\nFTC\n\nFederal Trade Commission\n\nFUA\n\nPowerplant and Industrial Fuel Use Act of 1978\n\nIEA\n\nInternational Energy Agency\n\nIEEPA International Emergency Economic Powers Act\nIEP\n\nInternational Energy Program\n\nIPR\n\nIndustrial Petroleum Reserve\n\nMer\n\nMaximum efficient rate of production\n\nMLLA Mineral Lands Leasing Act\nNATO North Atlantic Treaty Organization\nNEA\n\nNational Emergencies Act\n\nNESO\n\nNational Emergency Sharing Organization\n\nNGA\n\nNatural Gas Act\n\nNGPA\n\nNatural Gas Policy Act\n\nNPRs\n\nNaval Petroleum Reserves\n\nOCS\n\nOuter Continental Shelf\n\nPURPA Public Utility Regulatory Policies Act of 1978\nSPR\n\nStrategic Petroleum Reserve\n\nTEA\n\nTrade Expansion Act of 1962\n\nTer\n\nTemporary emergency production rate\n\nTWEA Trading with the Enemy Act\nWOCs Without Compensation Employees\n\n647\n\n\x0cMEMORANDUM OF LAW\n\nIntroduction\nThis memorandum is submitted in response to \xc2\xa7 3 of the Energy Emergency\nPreparedness Act of 1982 (EEPA), Pub. L. No. 97-229, 96 Stat. 248 (1982).\nThat section amends Title II o f the Energy Policy and Conservation Act, 42\nU .S.C . \xc2\xa7\xc2\xa7 6201-6422 (1982), by adding, inter alia, a new \xc2\xa7 272(a). Section\n272(a) directs the Attorney General, in consultation with the Secretary of Energy,\nto prepare for transmission by the President to Congress a \xe2\x80\x9c Memorandum of\nLaw\xe2\x80\x9d describing the \xe2\x80\x9c nature and extent of the authorities available to the\nPresident under existing law to respond to a severe energy supply interruption or\nother substantial reduction in the amount of petroleum products available in the\nUnited States.\xe2\x80\x9d 1 Section 272(a) provides that the Memorandum of Law shall\naddress the legal bases for certain specific emergency preparedness activities to\ndeal with a petroleum shortage,2 and to distinguish among the threshold stand\xc2\xad\nards for activation of the President\xe2\x80\x99s statutory authorities.3\n1 This M emorandum was prepared by the O ffice of Legal Counsel of the Department of Justice, at the direction of\nand under the supervision o f the Attorney G eneral, in consultation with the Department of Energy Assistance was\nalso provided by the Antitrust Division and L and and Natural Resources Division of the Department of Justice, the\nDepartment o f Defense, the Department of State, and the Federal Emergency Management Agency\n2 Section 272(a)(3)(A) specifies that the M emorandum include the following subjects:\n(i) activities of the United States in support of the international energy program and the De\xc2\xad\ncem ber 10, 1981, International Energy Agency agreem ent entitled \xe2\x80\x98Decision on Preparation for\nRiture Supply Disruptions\xe2\x80\x99 including\xe2\x80\x94\n(I) the National Emergency Sharing Organization,\n(II) emergency sharing systems; and\n(III) the supply right project;\n(ii) activities of the United States pursuant to its energy emergency preparedness obligations to the\nNorth Atlantic Treaty Organization;\n(in) development and use of the Strategic Petroleum Reserve;\n(iv) Government incentives to encourage private petroleum product stocks,\n(v) reactivation of the following Executive M anpower Reserves.\n(I) the Emergency Electric Power Reserve,\n(II) the Emergency Petroleum an d Gas Reserve; and\n(III) the Emergency Solid Riels Reserve,\n(vi) energy emergency response management in coordination with State and local governments;\nand\n(vn) em ergency public information activities, . . .\n3 Section 272(a)(3)(B) provides that the M emorandum should distinguish among\xe2\x80\x94\n(i) situations involving limited o r general war, international tensions that threaten national\nsecurity, and other Presidentially declared emergencies,\n(ii) events resulting in activation o f the international energy program; and\n(iii) events or situations less severe than those described in clauses (i) and (ii).\n\n648\n\n\x0cIn order to implement fully the intent of the EEPA, we have prepared the\nfollowing analysis of the primary statutory authorities that would be available to\nthe President in the event of a severe energy supply interruption. In addition to\ndescribing the requirements, scope, and limitations of those statutory authorities,\nwe attempt to address each of the legal issues specifically raised by Congress\nduring consideration of the EEPA and the legal bases for the activities enumer\xc2\xad\nated in \xc2\xa7 272(a)(3).. Consistent with the scope and legislative intent of the EEPA,4\nthe analysis focuses on statutory authorities that could be used to respond to a\n\xe2\x80\x9c petroleum emergency\xe2\x80\x9d\xe2\x80\x94 i.e., standby authorities that could be exercised in the\nevent of a sudden substantial reduction in petroleum products available to the\nUnited States.5 We generally do not address the President\xe2\x80\x99s broad authority to\ntake actions to reduce the likelihood that any of these \xe2\x80\x9c emergency\xe2\x80\x9d authorities\nwill ever have to be exercised, or particular statutory authorities with respect to\nenergy emergencies resulting from a shortfall in energy sources other than\npetroleum.\nIt is important to recognize at the outset that any memorandum of law\ndiscussing the powers of the President in the context of nonexistent, necessarily\nincomplete, and hypothetical facts is of limited utility and should not be regarded\nas decisive or exhaustive of the President\xe2\x80\x99s legal authority to take any specific\naction based on a factual situation that may arise in the future. The exercise of the\nvarious broad powers of the President to deal with \xe2\x80\x9c emergencies\xe2\x80\x9d is so often tied\nto the particular facts and circumstances confronting the President at that time\nthat a general and hypothetical discussion of his authority should not and cannot\nbe viewed as dispositive of his authority in actual emergencies.6 See generally\nDames & M oore v. Regan, 453 U.S. 654, 660-62, 669 (1981).\nFinally, the purpose of this Memorandum is limited to outlining the nature and\nscope of the statutory authorities available to the President. The Memorandum\ndoes not address whether or how the President should exercise particular au\xc2\xad\nthorities. That question is primarily a policy rather than a legal matter, and\ntherefore outside the scope of this Memorandum. In that regard, it should be\nnoted that, as described more fully below, the available statutory authorities\ngenerally provide the President with broad discretion to determine if, when, and\nhow they should be exercised, taking into account the facts of any future energy\nemergency and the President\xe2\x80\x99s best judgment as to how to prevent or deal with the\nemergency situation.\nPart I of this Memorandum outlines the scope and applicability of existing\nstatutory authorities available to the President to deal with a petroleum emergen\xc2\xad\ncy. Part II describes how those statutory authorities may support or limit the\n4 S ee S Rep No. 393, 97th Cong . 2d Sess 4 -5 (1982); H.R. Rep. No 585, 97th Cong., 2d Sess 1-2(1982)\n\n5 We use the term \xe2\x80\x9c petroleum " or \xe2\x80\x9c petroleum products\xe2\x80\x9d in this Memorandum to include those energy sources\nthat are included in the definition of \xe2\x80\x9c petroleum products\xe2\x80\x9d in \xc2\xa7 3(3) of the Energy Policy and Conservation Acl, 42\nU .S.C . \xc2\xa7 6202(3), i e., \xe2\x80\x9c crude oil, residual fuel oil, or any refined petroleum product (including any natural [gas]\nliquid and any natural gas liquid product)."\n6 For that reason, we cannot attempt here to discuss whatever inherent constitutional powers the President may\nhave, in the absence o f specific statutory authority, to deal with a future petroleum emergency S ee g en e ra lly\nYoungstown Sheet & Tube C o. v Sawyer, 343 U .S 579, 637 (1952) (Jackson, J., concurring). The existence or scope\nof such inherent powers can only be addressed in the context of a particular emergency situation.\n\n649\n\n\x0cparticular energy preparedness activities enumerated in \xc2\xa7 272(a)(3)(A). Plart III\ngroups the statutory authorities according to the three triggering situations listed\nin \xc2\xa7 272(a)(3)(B), to the extent consistent with the specific provisions of those\nstatutes.\nI. Statutory Authorities\nA number of statutes currently provide the President with authority that may be\navailable in the event of a substantial domestic or international shortfall in\npetroleum supplies, ranging from direct authority to allocate and to restrict\nimports or exports of petroleum products, to authority to undertake or facilitate\nenergy emergency preparedness planning and programs. The scope of the\nPresident\xe2\x80\x99s authority under these statutes necessarily depends on the particular\nfacts presented by any future petroleum shortage, and therefore it is difficult, if\nnot impossible, to resolve in the abstract all of the legal issues concerning the\nnature and extent of that authority. In particular, to the extent that the President\xe2\x80\x99s\nauthority under certain statutes rests on a discretionary presidential finding, for\nexample, that an emergency situation exists or that actions are necessary and\nappropriate \xe2\x80\x9c in the national interest,\xe2\x80\x9d to promote the \xe2\x80\x9c national defense,\xe2\x80\x9d or to\nfulfill international obligations o f the United States, it is impossible to determine\nin the absence of specific facts when exercise of that authority would be consistent\nwith the terms of the statute. This Memorandum therefore can only attempt to\noutline the terms of the statutes and describe generally the authority and any\nlimitations on that authority contained in those statutes as written.\nAmong these authorities, the Energy Policy and Conservation Act,7 the\nDefense Production Act of 1950,8 and the Trade Expansion Act of 19629 provide\nthe President, in a petroleum emergency meeting the requirements of those\nstatutes, with some specific authority to affect or control the distribution of\npetroleum products, as well as other authority to mitigate or plan for such an\nemergency. Additional authority that may be available to the President, depend\xc2\xad\ning on the circumstances of any petroleum emergency, is contained in the\nInternational Emergency Economic Powers A ct,10 the Emergency Energy Con\xc2\xad\nservation Act of 1979," the Export Administration Act of 1979,12 and in numer\xc2\xad\nous miscellaneous statutes such as the Public Utility Regulatory Policies Act of\n1978,13 the Powerplant and Industrial Fuel Use Act of 1978,14the Federal Power\nA ct,15 the Natural Gas Act,16 the National Gas Policy Act,17 the Mineral Lands\n7 42 U .S .C . \xc2\xa7\xc2\xa7 6201-6422, a s am ended b y Pub. L. No. 97-229, 96 Stat 248 (1982).\n8 50 U S.C . app \xc2\xa7\xc2\xa7 2061-2169 (1982).\n9 19 U .S .C . \xc2\xa7\xc2\xa7 1801-1982 (1982).\n10 50 U .S .C . \xc2\xa7\xc2\xa7 1701-1706 (1982)\n11 42 U .S .C \xc2\xa7\xc2\xa7 8501-8541 (1982).\n12 50 U .S .C . app \xc2\xa7\xc2\xa7 2401-2420 (1982).\n15 Pub. L No. 95-617, 92 Stat. 3119(1978), codified in 1 6 U .S .C \xc2\xa7\xc2\xa7 2601-2645 (1982) & 15 U .S.C \xc2\xa7 717z\n(1982).\n14 42 U .S .C . \xc2\xa7\xc2\xa7 8301-8484 (1982)\n15 16 U .S .C . \xc2\xa7\xc2\xa7 791a-825r (1982).\n16 15 U .S C. \xc2\xa7\xc2\xa7 717-717Z (1982).\n17 15 U .S .C . \xc2\xa7\xc2\xa7 3301-3432 (1982)\n\n650\n\n\x0cLeasing A ct,18 the Outer Continental Shelf Lands A ct,19the Clean Air Act,20 the\nInterstate Commerce Act,21 the Disaster Relief Act of 1974,22 the Magnuson\nAct,23 and the Foreign Assistance Act of 1961.24\nA . Energy Policy and Conservation Act\n\nThe Energy Policy and Conservation Act (EPCA), 42 U.S.C. \xc2\xa7\xc2\xa7 6201-6422\n(1982), provides the President with discretionary authority to respond to an actual\nor potential shortfall in domestic or international petroleum supplies, including\nthe power to: restrict exports of energy supplies; require accelerated production of\ncrude oil or natural gas from designated fields; establish and use a Strategic\nPetroleum Reserve; direct the preparation and implementation of energy con\xc2\xad\nservation contingency plans; and take actions necessary to implement certain\ninternational obligations of the United States.25\nWith the exception of export restrictions promulgated under \xc2\xa7 103,26 the\nPresident\xe2\x80\x99s authority under the EPCA is generally contingent on a finding that the\nactions taken are necessary to meet a \xe2\x80\x9c severe energy supply interruption\xe2\x80\x9d or to\nfulfill \xe2\x80\x9c obligations of the United States under the international energy program\xe2\x80\x9d\n(IEP).27 A \xe2\x80\x9c severe energy supply interruption\xe2\x80\x9d is defined by \xc2\xa7 3(8) of the Act, 42\nU.S.C. \xc2\xa7 6202(8), as a national energy supply shortage which the President\ndetermines\xe2\x80\x94\n(A) is, or is likely to be, of significant scope and duration, and\nof an emergency nature;\n(B) may cause major adverse impact on national safety or the\nnational economy; and\n(C) results, or is likely to result, from an interruption in the\nsupply of imported petroleum products, or from sabotage or an\nact of God.\nThe IEP, established in 1974 by the Agreement on an International Energy\nProgram (Agreement), to which the United States is a signatory, provides for\ncoordinated action among the 21 members (Participating Countries) in order to\ndecrease their vulnerability to supply disruptions and dependence on imported\n18 30 U S C . \xc2\xa7\xc2\xa7 181-287 (1982).\n19 43 U .S C . \xc2\xa7\xc2\xa7 1331-1356 (1982).\n20 42 U .S.C \xc2\xa7\xc2\xa7 7401-7642 (1982).\n21 49 U .S.C . \xc2\xa7\xc2\xa7 10101 el seq (1982).\n22 42 U .S C. \xc2\xa7\xc2\xa7 5121-5202 (1982)\n23 50 U S C. \xc2\xa7\xc2\xa7 191 e t seq (1982).\n24 Pub. L No 87 -1 9 5 , 75 Slat 424 (1961), a s a m e n d e d , codified in scattered sections of 7, 22, a n d 42 U .S .C .\n23 The EPCA also extended the crude oil and petroleum product pricing authonty of the Emergency Petroleum\nAllocation Act of 1975 (EPAA), 15 U .S C \xc2\xa7\xc2\xa7 751-760h (1982), established pnce controls on previously exempt\ndomestic crude oil; established maximum weighted average first sale prices on all domestic crude oil, and directed\nthe President to develop a rationing contingency plan Those provisions of the EPCA expired with the EPAA on\nSeptember 30, 1981. In addition, \xc2\xa7 104 of the EPCA amended \xc2\xa7 101 o f the Defense Production Act of 1950, 50\nU S C app. \xc2\xa7 2 0 7 1, adding a new subsection (c) that authorizes the President to require the allocation of supplies of\nmaterials and equipment in order to maximize domestic energy supplies That provision is discussed infra\n26 42 U .S C. \xc2\xa7 6212 See discussion infra.\n27 S ee 42 U.S C \xc2\xa7\xc2\xa7 6214(a)(2)(B), 6214(b)(2), 6214(c), 6261(b), 6271(a), 6272(b)\n\n651\n\n\x0coil.28 The Agreement imposes four principal substantive obligations: (1) the\nmaintenance of emergency oil reserves (Chapter I); (2) a program of contingent\ndemand restraint measures (Chapter II); (3) a program of international sharing of\noil supplies during a supply emergency (Chapter III); and (4) the establishment\nof an information system on the international oil market (Chapter V). A critical\nfeature of the IEP is the agreement on a \xe2\x80\x9c trigger\xe2\x80\x9d level of shortage in petroleum\nsupplies that may activate certain emergency measures to ease disruption caused\nby the shortage. This emergency system may be activated only in the event of a 7\npercent or greater shortfall in oil supplies of one or all of the Participating\nCountries, as determined in accordance with procedures set out in Chapter IV of\nthe Agreement. Once the emergency system has been activated, all Participating\nCountries are obligated to share in the shortfall. This may include, depending on\nthe circumstances, the sharing of oil supplies among Participating Countries,\nbased on a calculation of \xe2\x80\x9c supply rights\xe2\x80\x9d that assumes a certain amount of the\nshortfall will be absorbed through demand restraint and use of emergency\nreserves.29\n1. Section 103. Limitations on Exports\nSection 103 of the EPCA, 42 U.S.C. \xc2\xa7 6212, grants the President certain\nauthority to limit exports of energy supplies, including petroleum products.\nSubsection (a), 42 U.S.C. \xc2\xa7 6212(a), provides the President with discretionary\nauthority to promulgate a rule restricting exports of coal, petroleum products,\nnatural gas, or petrochemical feedstocks, and related materials and equipment.\nTo facilitate implementation of any rule issued pursuant to subsection (a), the\nPresident may require the Secretary of Commerce to implement export restric\xc2\xad\ntions pursuant to procedures established by the Export Administration Act of\n1979 (EAA), 50 U .S.C . app. \xc2\xa7\xc2\xa7 2401-2420 (1982). See 42 U.S.C. \xc2\xa7 6212(c).\nThe Secretary of Commerce may implement those restrictions without regard to\nthe direction in the EAA that export controls be limited to those necessary, inter\nalia, \xe2\x80\x9c to reduce the serious inflationary impact of foreign demand.\xe2\x80\x9d 30Subsection\n(b), 42 U.S.C. \xc2\xa7 6212(b), requires the President to promulgate a rule prohibiting\nthe export of crude oil and natural gas produced in the United States. The\nPresident may exempt crude oil or natural gas exports from that prohibition only\n28 Section 3(7) of the EPCA, 42 U.S C. \xc2\xa7 6202(7), defines the IEP as follows\nThe term \xe2\x80\x9c international energy program \xe2\x80\x9d means the Agreement on an International Energy\nProgram, signed by the United States on November 18, 1974, including (A) the annex entitled\n\xe2\x80\x9c Emergency R eserves," (B) any amendment lo such Agreement which includes another nation as a\nparty to such Agreement, and (C) an y technical or clerical amendment to such Agreement\nThe effect of this definition is to limit the use o f the authonty provided by the EPCA to actions taken in support of the\nA greement as it was signed by the United States in 1974; the definition precludes use of the EPCA in support of\nactions taken to implement any future substantive amendments to the Agreement In addition, \xc2\xa7 255 of the EPCA,\n42 U S C \xc2\xa7 6275, contains a caveat that, \xe2\x80\x9c [w]hile the authorities contained in [subchapter II of the EPCA] may, to\nthe extent authonzed .\n, be used to carry out obligations incurred by the United States in connection with the\nInternational Energy Program, [subchapter 11] shall not be construed in any way as advice and consent, ratification,\nendorsem ent, o r other form of congressional approval of the specific terms of such program \xe2\x80\x9d\n29 The scope and operation of the IEP are discussed more fully infra at 687-89\n30 S e e 50 U .S C. app. \xc2\xa7 2402(2)(C) The EAA is discussed infra at 683-84\n\n652\n\n\x0cif he determines that an exemption would be consistent with the national interest\nand the purposes of the EPCA. Id.\nThe President\xe2\x80\x99s authority to restrict exports of energy supplies and materials\nunder \xc2\xa7 103(a) or to waive mandatory restrictions on the export of crude oil and\nnatural gas under \xc2\xa7 103(b) is subject to several limitations. First, he must find\nthat the restrictions or exemptions are \xe2\x80\x9c appropriate and necessary\xe2\x80\x9d to carry out\nthe purposes of the EPCA31 and consistent with the national interest. 42 U.S.C.\n\xc2\xa7 6212(a), (b)(1), (d). The President\xe2\x80\x99s determination of the \xe2\x80\x9c national interest\xe2\x80\x9d\n(or the parallel determination by the Secretary of Commerce in implementing\nexport restrictions under this section) must take into account the need to leave\nuninterrupted or unimpaired: (1) exchanges in similar quantity for convenience\nor increased efficiency of transportation with persons or the government of a\nforeign state; (2) temporary exports across parts of an adjacent foreign state; and\n(3) the historical trading relations of the United States with Canada and Mexico.\nId. \xc2\xa7 6212(d). Second, with respect to restrictions on supplies of materials or\nequipment other than primary energy sources, the President must determine that\nthe restrictions are necessary either to maintain or for further exploration,\nproduction, refining, or transportation of energy supplies, or for the construction\nor maintenance of energy facilities, within the United States. Id. \xc2\xa7 6212(a)(2).\nThird, exemptions from the mandatory export restrictions on crude oil and\nnatural gas required by subsection (b) must be based on a \xe2\x80\x9c reasonable classifica\xc2\xad\ntion or basis,\xe2\x80\x9d such as the purpose for export, class of seller or purchaser, or\ncountry of destination. Id. \xc2\xa7 6212(b)(2).\n2. Section 106. Accelerated Production Rates\nSection 106(a)(1) of the EPCA, 42 U.S.C. \xc2\xa7 6214(a)(1), requires the Secre\xc2\xad\ntary of the Interior to determine, by rule, a \xe2\x80\x9c maximum efficient rate of produc\xc2\xad\ntion\xe2\x80\x9d (Mer) and a \xe2\x80\x9c temporary emergency production rate\xe2\x80\x9d (Ter) for each field on\nfederal lands that produces or is capable of producing significant volumes of\ncrude oil and/or natural gas.32 Subsection (b) of \xc2\xa7 106, 42 U.S.C. \xc2\xa7 6214(b),\n31 The purposes of the EPCA are broadly defined in \xc2\xa7 2, 42 U .S.C \xc2\xa7 6201, to include the following.\n(1) to grant specific standby authority to the President, subject to congressional review, to impose\nrationing, to reduce demand for energy through the implementation of energy conservation plans,\nand to fulfill obligations of the United States under the international energy program;\n(2) to provide for the creation of a Strategic Petroleum Reserve capable of reducing the impact of\nsevere energy supply interruptions;\n(3) to increase the supply of fossil fuels in the United States, through price incentives and\nproduction requirements;\n(4) to conserve energy supplies through energy conservation programs, and, where necessary, the\nregulation of certain energy uses;\n(5) to provide for improved energy efficiency of motor vehicles, major appliances, and certain\nother consumer products;\n(6) to reduce the demand for petroleum products and natural gas through programs designed to\nprovide greater availability and use o f .this Nation\'s abundant coal resources; and\n(7) to provide a means for verification of energy data to assure the reliability of energy data\n32 The Mer is defined as the maximum rate o f production that \xe2\x80\x9c may be sustained without loss of ultimate recovery\nof crude oil or natural gas, or both, under sound engineering and economic principles.\xe2\x80\x9d 42 U .S.C. \xc2\xa7 6214(e)(1).\nThe Ter is the maximum rate of production, above the Mer, that \xe2\x80\x9c may be maintained for a temporary period of less\nthan 90 days without reservoir damage and without significant loss of ultimate recovery of crude oil or natural gas, or\nboth. .\nId. \xc2\xa7 6214(e)(2)\n\n653\n\n\x0cprovides that each state may establish a Mer and Ter for any field in the state,\nother than a field on federal lands, that produces or is capable of producing\nsignificant volumes of natural gas or crude oil, and subsection (c), 42 U.S.C.\n\xc2\xa7 6214(c), provides that the Secretary of the Interior may establish a Mer and Ter\nfor unitized fields on federal and non-federal lands for which no Mer or Ter has\notherwise been established.\nExcept with respect to the Naval Petroleum Reserves (NPRs),33 the President\nmay, at any time, require natural gas or crude oil to be produced from fields on\nfederal lands at the Mer. If the President determines that a severe energy supply\ninterruption exists, he may also authorize production from federal fields at the\nTer, or from non-federal or unitized fields on federal and non-federal lands at the\nMer or Ter, if such rates have been established by the states or the Secretary of the\nInterior pursuant to subsections (b) and (c). 42 U.S.C. \xc2\xa7 6214(a)(2), (b)(2), (c).\nThis authority could be used to increase domestic crude oil supplies generally by\nincreasing the rate of production from federal fields to the Mer, or, in response to\nan interruption in petroleum supplies that triggers a presidential finding of a\nsevere energy supply interruption, by increasing production from federal fields to\nthe Ter and from other fields to the Mer or Ter.\n3. Sections 151-161. Strategic Petroleum Reserve\nSections 151\xe2\x80\x94161 of the EPCA, 42 U.S.C. \xc2\xa7\xc2\xa7 6231-6241, amended by Pub.\nL. No. 97-229, \xc2\xa7 4, 96 Stat. 250 (1982), provide for creation of a Strategic\nPetroleum Reserve (SPR) to be available for the purposes of reducing the impact\nof future disruptions in supplies of petroleum products and fulfilling obligations\nof the United States under the IEP,34 and set forth the method and circumstances\nfor drawdown and distribution of the SPR.\na. Establishment of the SPR\nSection 154 of the EPCA directs the establishment of an SPR for storage of up\nto one billion barrels of petroleum products and preparation of a plan (SPR Plan)\noutlining proposals for designing, constructing, and filling the storage and\nrelated facilities of the Reserve. 42 U.S.C. \xc2\xa7 6234(a), (b). The SPR Plan must\n33 The N PRs, which are established pursuant to 10 U .S C \xc2\xa7\xc2\xa7 7420-7438 (1982), are exempt from \xc2\xa7 106 of the\nEPCA. S e e 42 U .S.C \xc2\xa7 6214(0- Section 7422(c) of title 10 authorized and directed production of the NPRs at the\nM er for a period ending not later than A pril 5, 1982, and permitted the President to extend such production for\nadditional periods not to exceed three years each M er production has been extended until April 1985. 17 Weekly\nComp. Pres. Doc. 1097 (Oct. 6, 1981). Section 7422(b) o f title 10 authorizes the Secretary of Energy to require\nproduction of petroleum from the NPRs at th e Ter, with the approval of the President, whenever such production is\nneeded for national defense and if such production is authorized by a joint resolution of Congress. 10 U.S C.\n\xc2\xa7 7422(b)(2)\n34 A sd iscu ssed m /ra, at the discretion o f th e President, the SPR may be used to fulfill the obligations of the United\nStates under the IEP to participate in an international oil sharing plan in the event of activation of the IEP emergency\nsystem. S e e infra at 656\n\n654\n\n\x0calso include a description of the method of drawdown and distribution of the\nSPR.35 Id. \xc2\xa7 6234(e)(12).\nIn addition, the SPR Plan must provide either for establishment and mainte\xc2\xad\nnance on a regional basis of a \xe2\x80\x9c Regional Petroleum Reserve\xe2\x80\x9d containing suffi\xc2\xad\ncient volumes of residual fuel oil or any refined petroleum product to \xe2\x80\x9c provide\nsubstantial protection against an interruption or reduction in imports of such oil\nor product,\xe2\x80\x9d or for storage in the SPR of \xe2\x80\x9c substitute\xe2\x80\x9d volumes of crude oil and\npetroleum products sufficient to meet regional needs. 42 U.S.C. \xc2\xa7 6237. Section\n154(d) of the EPCA, 42 U .S.C. \xc2\xa7 6234(d), further directs that the Plan \xe2\x80\x9c shall be\ndesigned to assure, to the maximum extent practicable, . . . that each noncon\xc2\xad\ntiguous area of the United States which does not have overland access to domestic\noil production has its component of the [SPR] within its respective territory.\xe2\x80\x9d\nAs part of the SPR, the Secretary of Energy36 may create an Industrial\nPetroleum Reserve (IPR). 42 U.S.C. \xc2\xa7 6236. An IPR would consist of private\ninventories of petroleum products required to be maintained in excess of normal\nrequirements. The Secretary of Energy has the discretionary authority to estab\xc2\xad\nlish such a reserve by requiring importers and refiners of petroleum products to\nacquire, store, and maintain supplies of petroleum products up to 3 percent of the\namount they imported or refined in the previous calendar year. In establishing and\nmaintaining an IPR, the Secretary is required to take steps to avoid inequitable\neconomic impacts on refiners and importers, and to maintain an economically\nsound and competitive petroleum industry. Id.\nb. Filling the SPR\nTo implement the SPR, the Secretary of Energy is authorized to acquire\npetroleum products by purchase, exchange, or other means; the Secretary may\nalso store or exchange crude oil produced from federal lands, including NPR oil\nand oil that the United States is entitled to receive as royalties. 42 U.S.C. \xc2\xa7 6240.\nAmendments to the EPCA added in 1982 by the EEPA require the President, to\nthe extent funds are appropriated by Congress, to increase the volume of\npetroleum products in the SPR at a \xe2\x80\x9c minimum fill rate\xe2\x80\x9d of 300,000 barrels per\n35 The SPR Plan and any amendments thereto must be transmitted to Congress pursuant to the procedures\nprovided in 42 U S C \xc2\xa7 6421 for approval of \xe2\x80\x9c major energy actions \xe2\x80\x9d See 42 U S.C. \xc2\xa7 6239. We believe that\nprocedures such as these, which contemplate either a one-House veto or a two-House approval mechanism, violate\nthe presentation requirement and, insofar as a one-House veto is involved, the bicameralism requirements of A rt. I,\n\xc2\xa7 7, els. 2 & 3 of the Constitution. These clauses requtrethat all congressional actions having the force and effect of\nlaw must be adopted by both Houses o f Congress and presented to the President for his approval or veto. In addition,\nlegislative veto provisions such as involved here, which purport to allow Congress to play a direct and significant\nrole in the execution of the law, are inconsistent with the pnnciple of separation of powers. See C onsum ers U n io n c f\nU .S ., Inc v Federal T rade C o m m \'n , 691 F.2d 575 (D.C. Cir 1982) (per curiam ) (en banc); C o n su m er E n e rg y\nC o u n cil o f A m erica v. F ederal E nergy Regulatory C om m n, 673 F.2d 425 (D C. Cir 1982), pending before the\nSupreme Court as Nos. 81-2 0 0 8 ,8 1 -2 0 2 0 , 8 1 -2 1 5 1 ,8 1 -2 1 7 1 ,8 2 -177, and 82-209; Im m igration a n d N a tu ra liza \xc2\xad\ntion S ervice v C hadha, 634 F.2d 408 (9th Cir. 1980), pending before the Supreme Court as Nos. 80-1832,\n81-2170, and 81-2171\n36 Responsibility for developing and implementing the SPR was originally given to the Administrator of the\nFederal Energy Administration Pursuant to the Department of Energy Organization Act, 42 U .S.C . \xc2\xa7\xc2\xa7 1701-7375\n(1982), the Secretary of Energy is responsible for all functions relating to the SPR. S ee 42 U.S C \xc2\xa7 7151\n\n655\n\n\x0cday, or 220,000 barrels per day if the President finds that the higher rate would not\nbe in the national interest, until the SPR reaches at least 500,000,000 barrels.\nPub. L. No. 97-229, \xc2\xa7 4(a), 96 Stat. 250 (1982).37 In order to facilitate achieve\xc2\xad\nment of this fill rate, the EEPA authorizes the leasing or other use of \xe2\x80\x9c interim\nstorage facilities.\xe2\x80\x9d Id. \xc2\xa7 4(b).\nc. Drawdown and Distribution of the SPR\nSection 161, 42 U.S.C. \xc2\xa7 6241, governs the drawdown and distribution of\npetroleum products in the SPR. Drawdown and distribution must be accom\xc2\xad\nplished in accordance with an effective Distribution Plan.38The Distribution Plan\ncan only be implemented upon a finding by the President that distribution of the\nReserve is required either by (1) a severe energy supply interruption or (2) obli\xc2\xad\ngations of the United States under the IEP. Id.\nThe President\xe2\x80\x99s authority to withdraw oil in the SPR includes the authority to\nimpose allocation and price controls on that oil. Under \xc2\xa7 161(e), 42 U.S.C.\n\xc2\xa7 6241(e), the Secretary of Energy is specifically authorized to provide by rule\n\xe2\x80\x9c for the allocation of any petroleum product withdrawn from the [SPR] in\namounts specified in (or determined in a manner prescribed by) and at prices\nspecified in (or determined in a manner prescribed by) such rules. Such price\nlevels and allocation procedures shall be consistent with the attainment, to the\nmaximum extent practicable, of the objectives specified in [the EPAA].\xe2\x80\x9d The\nDepartment of Energy has adopted regulations that would govern the allocation\nand pricing of SPR crude oil, in the event that such oil were allocated rather than\nsold through price competition, after a breakdown of the reserve had been\ntriggered by one of the enumerated circumstances. See 10C.F.R. Pt. 220(1984).\n4. Sections 201-202. Energy Conservation Contingency Plans\nUnder \xc2\xa7 201 of the EPCA, 42 U.S.C. \xc2\xa7 6261, the President is required to\ndevelop one or more \xe2\x80\x9c energy conservation contingency plans,\xe2\x80\x9d which are\ndefined by \xc2\xa7 202, 42 U.S.C. \xc2\xa7 6262, as plans \xe2\x80\x9c which impose reasonable\nrestrictions on the public or private use of energy that are necessary to reduce\nenergy consumption.\xe2\x80\x9d 39 The President is required to submit any energy con\xc2\xad\nservation contingency plan or amendments thereto to Congress accompanied by a\nstatement explaining the need for, rationale of, and operation of the plan. The plan\n37 If funds are available to achieve a fill rate higher than the required \xe2\x80\x9c minimum fill rate,\xe2\x80\x9d the EEPA provides that\nthe fill rate be the "highest practicable fill rate achievable.\xe2\x80\x9d Pub. L No. 97-229, \xc2\xa7 4(a)(1)(D), 96 Stat. 251 (1982).\nA fter the SPR reaches 500,000,000 barrels, the President\xe2\x80\x99s obligation is to \xe2\x80\x9c seek to undertake and\ncontinue\xe2\x80\x9d a\nfill rate o f 300,000 barrels per day until the SPR reaches 750,000,000 barrels. Id \xc2\xa7 4(a)(2).\n38 The currently effective SPR Distribution Plan was submitted to Congress on October 31, 1979. The EEPA\nrequires the Secretary o f Energy to transmit a new drawdown plan to Congress by December 1, 1982, as an\namendment to the existing SPR Plan The EEPA specifies that this amendment shall take effect on the date of\ntransmittal to Congress and shall not be subject to provisions in \xc2\xa7 159(e) ofthe EPCA, 42 U.S C \xc2\xa7 6239(e), relating\nto congressional review of SPR Plan amendments. Pub. L. No 97-229, \xc2\xa7 4(c), 96 Stat. 252 (1982).\n39 As enacted, \xc2\xa7\xc2\xa7 201 and 203 also required the President to develop a \xe2\x80\x9c rationing contingency plan\xe2\x80\x9d as part of\nregulations promulgated under \xc2\xa7 4(a) of the EPAA, 15 U .S.C \xc2\xa7 753(a). S e e 42 U .S.C . \xc2\xa7\xc2\xa7 6261, 6263. This\nauthonty expired on September 30, 1981 S e e id \xc2\xa7 6263(f) (1976)\n\n656\n\n\x0cmust take into account its potential economic impacts, including its effects on\nvital industrial sectors of the economy, employment, the economic vitality of\nstates and regional areas, the availability and price of consumer goods and\nservices, the gross national product, and any possible anticompetitive effects. Id.\n\xc2\xa7 6261(b), (c), (e). Section 201(b)(2) further requires that the contingency plan\nbe approved by a resolution by each House of Congress.40 Id. \xc2\xa7 6261(b)(2). In\norder to implement an effective emergency contingency plan, the President must\nfind that implementation is required by a severe energy supply interruption or by\nthe need to fulfill the obligations of the United States under the IEP. Id.\n\xc2\xa7 6261(b)(3).\nThe President\xe2\x80\x99s authority to prescribe particular demand restraint or energy\nconservation measures pursuant to \xc2\xa7 201 is limited by \xc2\xa7 202(a)(2), 42 U.S.C.\n\xc2\xa7 6262(a)(2), which prohibits any energy conservation contingency plan from\nimposing any rationing, tax, tariff, or user fee, from providing for any credit or\ndeduction in computing any tax, and from containing any provision respecting\nthe price of petroleum products. A plan may provide for exemption of individual\nstates or political subdivisions if the President determines a comparable program\nis in effect in such state or subdivision or that \xe2\x80\x9c special circumstances\xe2\x80\x9d exist. See\nid. \xc2\xa7 6262(b).\n5. Sections 251, 252, 254. Authorities in Support of the Allocation and\nInformation Provisions of the IEP\nSections 251, 252, and 254 of the EPCA, 42 U.S.C. \xc2\xa7\xc2\xa7 6271,6272, 6274, as\namended by Pub. L. No. 97-229, \xc2\xa7 2, 96 Stat. 248 (1982), provide authority for\nthe President and cooperating U.S. oil companies to take action to implement\nobligations of the United States under the allocation and information provisions\ncontained in Chapters III, IV, and V of the IEP.\nAs described more fully in f t r t II below, under the allocation provisions of the\nIEP, when a reduction in oil supplies reaches the \xe2\x80\x9c trigger\xe2\x80\x9d level, the United\nStates may have an obligation to allocate oil to another Participating Country, or\nmay have the right to receive allocations of oil from another Participating\nCountry, depending on calculation of the United States\xe2\x80\x99 \xe2\x80\x9c supply rights.\xe2\x80\x9d Chapter\nIII of the IEP Agreement provides that \xe2\x80\x9c when the sum of normal domestic\nproduction and actual net imports available during an emergency exceeds its\nsupply right [the country] shall have an allocation obligation which requires it to\nsupply, directly or indirectly, the quantity of oil equal to that excess to other\nParticipating Countries.\xe2\x80\x9d Chapter III obligates the United States and the IEP\ncountries to take \xe2\x80\x9c necessary measures\xe2\x80\x9d to ensure that such allocation will be\ncarried out. As provided in Chapter IV of the Agreement, there are two types of\nemergencies that \xe2\x80\x9c trigger\xe2\x80\x9d or activate a nation\xe2\x80\x99s allocation obligations under the\nIEP Agreement: (1) a selective trigger, which occurs when one or more Par\xc2\xad\n40 For the reasons set forth supra at n 35, we believe that this two-House approval provision is within the class of\nso-called legislative veto mechanisms that violate the requirements of Art I, \xc2\xa7 7 of the Constitution and the\nprinciple of separation of powers.\n\n657\n\n\x0cticipating Countries suffer a 7 percent or greater shortfall of available supplies\nmeasured against final oil consumption during a specified base period; and (2) a\ngeneral trigger, which occurs when the Participating Countries as a whole suffer a\n7 percent or greater shortfall.4\'\nThe IEP Agreement also provides for the furnishing of information to the\nInternational Energy Agency (IEA)42 during normal and emergency situations.\nPursuant to Chapter V, Participating Countries are required to supply to the IEA\ncertain information concerning the international oil market and activities of oil\ncompanies, and the possible development of oil shortages, and are responsible\nfor assuring that oil companies subject to their jurisdiction provide them with the\nrequired information.43\na. Section 251. International Allocation\nSection 251 of the EPCA, 42 U.S.C. \xc2\xa7 6271, provides the exclusive statutory\nauthority for the President to require U.S. oil companies to allocate petroleum\nproducts to Participating Countries, if such allocation is necessary for the\npurpose of implementing obligations of the United States under the IEP.44 That\nsection authorizes the President to promulgate rules requiring that producers,\ntransporters, refiners, distributors, or storers of petroleum products \xe2\x80\x9c take such\naction as [the President] determines to be necessary for implementation of the\nobligations of the United States under Chapters III and IV of the [IEP] insofar as\nsuch obligations relate to the international allocation of petroleum products.\xe2\x80\x9d The\nPresident\xe2\x80\x99s authority under that section specifically includes the authority to\nregulate the allocation and price of petroleum products owned or controlled by oil\ncompanies subject to the jurisdiction of the United States.45 No rule promulgated\nunder \xc2\xa7 251 may be made effective unless (1) it has been transmitted to Con\xc2\xad\ngress, accompanied by a finding that implementation of the rule is required in\norder to fulfill the obligations o f the United States under the IEP; (2) an \xe2\x80\x9c interna\xc2\xad\ntional energy supply emergency\xe2\x80\x9d has been declared by the President;46 and\n(3) the IEP emergency system has been activated in accordance with the pro\xc2\xad\n41 S e e infra at 688-87.\n42 The IEA is the international body set up by the IEP A greement The supreme decisionmaking body of the IEA\nis the Governing Board, which includes a representative o f each member government. A permanent staff is provided\nby the establishm ent o f a Secretariat. Much o f the work o f the IEA is done by several \xe2\x80\x9c standing groups,\xe2\x80\x9d consisting\no f senior personnel from the Participating Countries.\n43 The IEP information system is discussed infra at 688.\n44 Subsection (c)(2) o f \xc2\xa7 251, 42 U.S.C \xc2\xa7 6271(c)(2), makes clear that the authority is exclusive:\nNo officer o r agency o f the United States shall have any authority, other than authonty under this\nsection, to require that petroleum products be allocated to other countries for the purpose of\nim plementation o f the obligations o f the United States under the [IEP]\n45 Section 251(a), 42 U S.C . \xc2\xa7 6271(a), provides that \xe2\x80\x9c [a]llocation under such aile should be in such amounts\nand at such prices as are specified in (or determined in a manner prescribed by) such rule.\xe2\x80\x9d\n46 An \xe2\x80\x9c international energy supply em ergency\xe2\x80\x9d is defined by \xc2\xa7 252(1)(1), 42 U .S.C . \xc2\xa7 6272(1)(1), as.\nany penod (A) beginning on any date which the President determines allocation of petroleum\nproducts to nations participating in the international energy program is required by chapters III and\nIV of such program , and (B) ending on a date on which he determines that such allocation is no\nlonger required. Such a penod may not exceed 90 days, but the President may establish one or more\nadditional 90-day periods by making anew the determination under subparagraph (A) of the\npreceding sentence.\n\n658\n\n\x0ccedures and standards of Chapter IV.47 No rule may remain in effect longer than\ntwelve months after its transmittal to Congress. Id. \xc2\xa7 6271(b).\nUnder \xc2\xa7 251, the President has clear authority to require oil companies subject\nto the jurisdiction of the United States to divert their oil supplies to other\nParticipating Countries, and to determine prices at which such supplies should be\nsold, if a \xe2\x80\x9c trigger\xe2\x80\x9d situation has been declared in accordance with Chapter IV of\nthe Agreement and if the President determines that such allocation is necessary to\nmeet the United States\xe2\x80\x99 allocation obligations. A related question is whether\n\xc2\xa7 251 provides the President with authority to allocate oil supplies among\ncooperating oil companies if those oil companies are disadvantaged by diversion\nof their projected supplies to other countries, when such diversion is necessary to\nenable the United States to meet its obligations under Chapters III and IV of the\nIEP Agreement. Although the IEP Agreement does not require that the United\nStates have authority to control the allocation or price of oil domestically in order\nto ensure that those oil companies that assist the United States in meeting its\nobligations under the Agreement do not suffer competitively, the Agreement\ncould arguably be interpreted to support the development of such a \xe2\x80\x9c fair share\xe2\x80\x9d\ndomestic allocation program. Articles 6(1), 9(3), and 9(4) of the Agreement, for\nexample, appear to contemplate that Participating Countries may implement such\nprograms in order to fulfill their international allocation obligations.\nArt. 6(1). Each participating country shall take the necessary\nmeasures in order that allocation of oil will be carried out pursuant\nto [Chapter III] and Chapter IV.\n*\n\n*\n\n*\n\nif!\n\n*\n\nArt. 9(3). Insofar as possible, normal channels of supply will be\nmaintained as well as the normal supply proportions between\ncrude oil and products and among different categories of crude oil\nand products.\nArt. 9(4).-When allocation takes place, an objective of the Pro\xc2\xad\ngram shall be that available crude oil and products shall, insofar as\npossible, be shared within the refining and distributing industries\nas well as between refining and distributing companies in accord\xc2\xad\nance with historical supply patterns.\nSection 251 specifically authorizes the President to direct oil companies \xe2\x80\x9c to\ntake such action as he determines to be necessary\xe2\x80\x9d to meet the international\nallocation obligations of the United States under the IEP. 42 U.S.C. \xc2\xa7 6271(a).\nConsistent with this language and the arguable breadth of the IEP Agreement, the\nPresident could find that a limited domestic \xe2\x80\x9c fair sharing\xe2\x80\x9d allocation program\n47 The second and third requirements were recently added by the EEPA to clarify Congress\xe2\x80\x99 intent that \xc2\xa7 251 not\nprovide authonty for the President to implement allocation or price control requirements prior to activation of the\nIEP emergency system in accordance with Chapter IV o f the Agreement. Pub. L. No 97-229, \xc2\xa7 2, 96 Slat. 248\n(1982); see 128 Cong Rec. S 6065 (daily ed. May 26. 1982) (remarks of Sen. McClure) This requirement would,\nfor example, preclude use of \xc2\xa7 251 to direct oil companies to allocate oil in \xe2\x80\x9c subcnsis" situations. A fuller\ndiscussion of this limitation is provided m ftirt II infra.\n\n659\n\n\x0cwould be necessary in order for the United States to meet its IEP allocation\nobligations through the voluntary cooperation of U.S. oil companies, because\nsuch cooperation could well depend on assurances to the participating companies\nthat they would not suffer competitive losses. A presidential determination that\nsuch a system is \xe2\x80\x9c necessary\xe2\x80\x9d to meet those obligations would be accorded\nsubstantial deference by the courts. See generally, e .g ., Chicago & Southern\nA irlines v. Western S.S. Corp., 333 U.S. 103 (1948); United States v. CurtissWright Export Corp., 299 U.S. 304 (1936); 42 Op. A tt\xe2\x80\x99y Gen. 363, 370 (1968).\nSimilarly, the President\xe2\x80\x99s determination with regard to the nature of the United\nStates\xe2\x80\x99 international allocation obligations under the IEP and the measures to be\nused to meet those obligations would be accorded substantial deference. See\ngenerally, e .g .. Federal Energy Administration v. Algonquin SNG, Inc., 426\nU.S. 548, 561 (1976). It is clear, however, that neither the IEP nor \xc2\xa7 251 requires\nthe President to develop or implement a domestic \xe2\x80\x9c fair sharing\xe2\x80\x9d allocation plan.\nIt is less clear that \xc2\xa7 251 could be used to establish comprehensive nationwide\nallocation and price controls, for example, such as those provided under the\nEPAA, on the basis that such controls are \xe2\x80\x9c necessary\xe2\x80\x9d for implementation of the\nUnited States\xe2\x80\x99 international allocation obligations under the IEP. An allocation\nand pricing regulation of the breadth available under the EPAA would not, at least\nin the absence of particular facts, appear to be linked with sufficient directness to\nfulfillment of the United States\xe2\x80\x99 international allocation obligations to justify a\npresidential finding of necessity. However, any exercise of presidential discretion\nunder \xc2\xa7 251 will depend on the particular facts presented. See generally Federal\nEnergy Administration v. Algonquin SNG, Inc., supra, 426 U.S. at 571.\nb. Section 252. Antitrust Defense\nSection 252 of the EPCA, 42 U.S.C. \xc2\xa7 6272, authorizes persons engaged in\nthe business of producing, transporting, refining, distributing, or storing pe\xc2\xad\ntroleum products to develop voluntary agreements and plans of action to facilitate\nor implement the United States\xe2\x80\x99 allocation and information obligations under the\nIEP, and establishes procedures for development of such agreements and plans\nand for approval and monitoring by federal officials.48 That section provides a\nlimited antitrust defense with respect to actions taken by participating companies\nin developing or implementing agreements that meet the requirements of the\nsection. The antitrust defense is available only if the actions are taken in the\n48 Section 252 calls upon the Secretary o f Energy to prescribe rules governing, and provides detailed procedural\nrequirements with respect to. meetings held to develop or carry out a voluntary agreement or plan of action 42\nU S.C . \xc2\xa7 6272(b), (c) S e e 10 C .FR Pt. 2 0 9 (1984) The Attorney General and the Federal Trade Commission\n(FTC) are to participate in the development and execution of voluntary agreements and plans of action and the\nAttorney General must approve any voluntary agreement or plan of action prior to its implementation. 42 U S C\n\xc2\xa7 6272(d). The Attorney General and the FTC are also to monitor the development and execution of voluntary\nagreem ents and plans of action in order to \xe2\x80\x9c promote competition and to prevent anticompetitive practices and\neffects.\xe2\x80\x9d Id . \xc2\xa7 6272(e). A \xe2\x80\x9c Voluntary Agreement and Plan o f Action to Implement the International Energy\nP r o g r a m , \xe2\x80\x9d administered by the Secretary o f Energy, was approved in 1 9 7 6 .5 ^ 4 1 Fed Reg. 13998(Apr. 1, 1976).\nTwenty U S oil companies are now participating in that Agreement On May 8, 1981, the Department of Energy\npublished a revised draft Plan of Action in the Federal Register. 46 Fed Reg 26026 (May 8, 1981).\n\n660\n\n\x0ccourse of developing or carrying out a voluntary agreement or plan of action, are\nin compliance with the requirements of the section and any rules promulgated\nthereunder, and are not taken for the purpose of injuring competition. Section\n252(f)(2), 42 U.S.C. \xc2\xa7 6272(f)(2), provides that actions taken to implement a\nvoluntary agreement or plan of action must be \xe2\x80\x9c specified in, or within the\nreasonable contemplation of, an approved plan of action\xe2\x80\x9d in order to qualify for\nthe antitrust defense. A separate breach of contract defense is also provided if the\nalleged breach \xe2\x80\x9c was caused predominantly by action taken during an interna\xc2\xad\ntional energy supply emergency or to carry out a voluntary agreement or plan of\naction authorized and approved in accordance with [\xc2\xa7 252].\xe2\x80\x9d Id. \xc2\xa7 6272(k).\nThe authority in \xc2\xa7 252 to develop and implement voluntary agreements or\nplans of action and the parallel antitrust and breach-of-contract defenses may be\nrelied upon only in support of the United States\xe2\x80\x99 allocation and information\nobligations under Chapters III, IV, and V of the IEP Agreement. Any doubt\nwhether \xc2\xa7 252 would authorize actions taken by oil companies that are not\nprovided for by the allocation and information provisions of Chapters III, IV, or\nV of the IEP was dispelled by the EEPA, which amended \xc2\xa7 252 to provide that:\nThe authority granted by this section shall apply only to the\ndevelopment or carrying out of voluntary agreements and plans of\naction to implement chapters III, IV, and V of the international\nenergy program.\nPub. L. No. 97-229, \xc2\xa7 2(b), 96 Stat. 248 (1982). See discussion infra at 694\xe2\x80\x9495.\nThe legislative history of \xc2\xa7 252 makes clear that the antitrust defense was not\nintended to authorize voluntary agreements among the oil companies for the\ndomestic allocation or pricing of oil supplies, even if the purpose of such\nallocation were to ease disruptions caused by international allocations necessary\nto meet the United States\xe2\x80\x99 IEP obligations. The report issued by the Senate\nCommittee on the Judiciary states that, at the request of the Ford Administration\nand of Chairman Hart of the Subcommittee on Antitrust and Monopoly, the\nrequirements of \xc2\xa7 121 (the predecessor to \xc2\xa7 252) were tailored and limited to\nspecific actions with respect to the international allocation of petroleum and the\ninformation system of the IEP. The Report indicates that the defense was\nintentionally not extended to domestic activities of companies participating in\nvoluntary agreements or plans under \xc2\xa7 252. See S. Rep. No. 26, 94th Cong., 1st\nSess. 43 (1975).\nc.\nAgency\n\nSection 254. Exchange of Information with the International Energy\n\nSection 254, 42 U.S.C. \xc2\xa7 6274, contains procedures for the transmittal of\ninformation to the IEA by the United States government. That section provides\nthat the Secretary of State may transmit to the IEA information and data related to\nthe energy industry that is required to be submitted under the terms of the IEP\nAgreement. 42 U.S.C. \xc2\xa7 6274(a). To the extent feasible, trade secrets and\n\n661\n\n\x0ccommercial or financial information must be aggregated to avoid identification of\nsources before being reported to the IEA by the United States government. Id.\nHowever, such information may be transmitted directly by the government\nwithout aggregation during an international energy supply emergency,49 or if the\nPresident certifies that the IEA has adopted and is implementing security meas\xc2\xad\nures to protect against disclosure of the information to any person or foreign\nnation. Id. The President may withhold transmittal of any data or information if\nhe determines that transmittal would prejudice competition, violate the antitrust\nlaws, or be inconsistent with national security. Id. \xc2\xa7 6274(b). If the con\xc2\xad\nfidentiality of information to be transmitted to the IEA is otherwise protected by\nstatute, the Secretary of Energy, prior to giving the information to the State\nDepartment, must obtain concurrence in its release from the head of the depart\xc2\xad\nment or agency authorized to collect or obtain the information. Id. \xc2\xa7 6274(c).\nB. Defense Production Act c f 1950\n\nThe Defense Production Act of 1950 (DPA), 50 U.S.C. app. \xc2\xa7\xc2\xa7 2061-2169,\nprovides the President with additional discretionary authority that may be avail\xc2\xad\nable in the event of a substantial shortfall in petroleum supplies. The DPA is not\nan \xe2\x80\x9c emergency\xe2\x80\x9d statute, in the sense that the authority provided in the statute\nmay be used only if certain specified \xe2\x80\x9c emergency\xe2\x80\x9d conditions occur.50 Rather,\nthe President may use that authority to meet a variety of national defense and\nnational defense preparedness needs, whether or not an \xe2\x80\x9c emergency\xe2\x80\x9d situation\nexists. As discussed above, however, our focus in this Memorandum is on\nstatutory authorities that may be available to the President in the event of a future\n\xe2\x80\x9c petroleum emergency.\xe2\x80\x9d Consequently, our discussion of the scope of the DPA is\ngenerally limited to how that statute could be used by the President to respond to\nsuch an emergency. Nothing in this discussion is intended to suggest that, subject\nof course to the requirements of each relevant provision,51 the DPA may not be\nused in other contexts or in non-emergency situations.\nThe purpose of the DPA is to provide for the promotion of the national defense\nby assuring that adequate productive capacity and supply exist to meet national\ndefense needs. With one exception,52 exercise of authority provided by the DPA\nmust be linked to the needs o f the national defense or of national defense\npreparedness programs.53 The President has broad discretion to determine what\nthose needs are and how the DPA authorities may be used, consistent with the\n49 This exception is limited, however, to information or data relating to the international allocation of petroleum\nproducts. 42 U .S .C . \xc2\xa7 6274(a)(2)(B)(i).\n50 O ne exception is \xc2\xa7 710(e), 50 U.S C. app. \xc2\xa7 2160(e), w hich, as we discuss infra, authorizes employment of\nmembers of the Executive Reserve only \xe2\x80\x9c during penods of emergency.\xe2\x80\x9d S e e infra at 672-73.\n51 S e e id.\ni2 S e e discussion o f \xc2\xa7 101(c), 50 U S.C. app. \xc2\xa7 2071(c), in fra at 668-70.\n53 The term \xe2\x80\x9c national defense\xe2\x80\x9d is defined by the Act to include \xe2\x80\x9c programs for military and atomic energy\nproduction o r construction, military assistance to any foreign nation, stockpiling, space and directly related\nactivity.\xe2\x80\x9d 50 U S C . app. \xc2\xa7 2152(d).\n\n662\n\n\x0cspecific requirements of each provision of the statute.54 See generally H.R. Rep.\nNo. 2759, 81st Cong., 2d Sess. 4 (1950); S. Rep. No. 470, 82d Cong., 1st Sess.\n12 (1951). In particular, in his determination of what the national defense\nrequires, it is clear that the President may consider, inter alia, the potential\nimpact of severe shortages in petroleum supplies available to the United States. In\nthe Energy Security Act (ESA), Pub. L. No. 96-294, \xc2\xa7 102,94 Stat. 617 (1980),\nCongress specifically designated energy as a \xe2\x80\x9c strategic and critical material\xe2\x80\x9d\nwithin the meaning of the DPA\xe2\x80\x99s Declaration of Policy,55 and added language to\nthat Declaration to emphasize that preparedness programs, as well as actions to\nexpand productive capacity and supply in order to assure the availability of\nenergy supplies, are linked to the national defense:\nIn view of the present international situation and in order to\nprovide for the national defense and national security, our mobi\xc2\xad\nlization effort continues to require some diversion of certain\nmaterials and facilities from civilian use to military and related\npurposes. It also requires the development of preparedness pro\xc2\xad\ngrams and the expansion of productive capacity and supply\nbeyond the levels needed to meet the civilian demand, in order to\nreduce the time required for full mobilization in the event of an\nattack on the United States or to respond to actions occurring\noutside of the United States which could result in the termination\nor reduction c f the availability c f strategic and critical materials,\nincluding energy, and which would adversely affect the national\ndefense preparedness c f the United States. In order to insure the\nnational defense preparedness which is essential to national\nsecurity, it is also necessary and appropriate to assure domestic\nenergy supplies fo r national defense needs.\n\n50 U .S.C . app. \xc2\xa7 2062 (amendment emphasized). The Conference Report\nexplained:\nThe \xe2\x80\x9c Declaration of Policy\xe2\x80\x9d is amended to make it clear that it is\nnecessary and appropriate, indeed essential, \xe2\x80\x9c to assure domestic\nenergy supplies for national defense needs.\xe2\x80\x9d\n54 As described below, the particular basis for exercise of authority under each of the relevant provisions of the\nDPA differs somewhat, although, with the exception of \xc2\xa7 101(c), 5 0U .S C .app. \xc2\xa7 2071(c)(je*n.52), that exercise\nmust be related to the national defense or national defense preparedness programs. Thus, the President has authority\nunder \xc2\xa7 101(a), 50 U S.C. app. \xc2\xa7 2071(a), to order the priority performance of contracts or allocate materials \xe2\x80\x9c to\npromote the national defense,\xe2\x80\x9d under \xc2\xa7 708, 50 U .S.C. app. \xc2\xa7 2158(c)(1), the President may authonze voluntary\nagreements among private individuals and companies \xe2\x80\x9d upon finding that conditions exist which may pose a direct\nthreat to the national defense or its preparedness programs;\xe2\x80\x9d the President may employ persons from the private\nsector without compensation under \xc2\xa7 710(b), 5 0 U S.C app. \xc2\xa7 2160(b), \xe2\x80\x98\xe2\x80\x98in order to carry out the provisions of [the\nDPA];\xe2\x80\x9d and he may establish and train an Executive Reserve pursuant to \xc2\xa7 710(e), 50 U .S.C app \xc2\xa7 2160(e), for\nemployment \xe2\x80\x9c in executive positions in Government during periods of emergency.\xe2\x80\x9d\ni5 S e e 50 U.S C app \xc2\xa7 2076.\n\n663\n\n\x0cH.R. Rep. No. 1104, 96th Cong., 2d Sess. 187 (1980).56\nThree provisions of the DPA provide the President with authority to respond to\na substantial petroleum shortage: \xc2\xa7 101, 50 U.S.C. app. \xc2\xa7 2071, which author\xc2\xad\nizes the President to require the priority performance of contracts or orders and to\ndirect allocation of materials, including petroleum products, in certain circum\xc2\xad\nstances; \xc2\xa7 708, 50 U.S.C. app. \xc2\xa7 2158, which authorizes the President to\napprove certain voluntary agreements relating to preparedness for national\nemergencies and thereby to trigger an antitrust defense for persons or companies\nparticipating in such agreements; and \xc2\xa7 710, 50 U.S.C. app. \xc2\xa7 2160, which\nauthorizes the President to employ \xe2\x80\x9c persons of outstanding experience and\nability\xe2\x80\x9d to serve without compensation in advisory positions for purposes of\nassisting in carrying out the DPA and to establish an Executive Reserve to train\nprivate and governmental personnel for employment in executive positions in the\ngovernment during periods of emergency.\n1. Section 101(a). Priority Performance of Contracts and Allocation of\nMaterials\nSection 101(a) of the DPA, 50 U.S.C. app. \xc2\xa7 2071(a), authorizes the President\nto require performance on a priority basis of contracts or orders that he deems\n\xe2\x80\x9c necessary or appropriate to promote the national defense,\xe2\x80\x9d and to allocate\nmaterials and facilities \xe2\x80\x9c in such manner, upon such conditions and to such extent\nas he shall deem necessary or appropriate to promote the national defense.\xe2\x80\x9d 57The\nauthority provided to the President under this section has been characterized by\nCongress as \xe2\x80\x9c broad and flexible.\xe2\x80\x9d H.R. Rep. No. 2759, 81st Cong., 2d Sess. 4\n(1950). Indeed, the House Report on the original version of the DPA noted that\n\xc2\xa7 101(a) would authorize a wide range of actions to meet the national defense\nneeds of the United States:\n[The powers granted under \xc2\xa7 101(a)] would include the power to\nissue orders stopping o r reducing the production of any item;\norders to prohibit the use of a material for a particular purpose or\nfor anything except a particular purpose; and orders to prohibit the\naccumulation of excessive inventories. [Section 101(a)] would\nauthorize the President to require filling certain orders in prefer\xc2\xad\n56 Congress intended that this amendment to the DPA make explicit the link between domestic energy supplies\nand the national defense, but it did not intend to grant a n y new allocation or pricing authority or new authority to\nengage in the production o f energy (except as authorized by the ESA with respect to synthetic fuel production) See\n50 U.S C. app. {f 2076\n57 The full text of \xc2\xa7 101(a) reads as follows.\nThe President is hereby authonzed ( I ) to require that performance under contracts or orders (other\nthan contracts of employment) which he deems necessary or appropriate to promote the national\ndefense shall take pnority over performance under any other contract or order, and, for the purpose of\nassuring such pnority, to require acceptance and performance of such contracts or orders in\npreference to other contracts or orders by any person he finds to be capable of their performance, and\n(2) to allocate matenals and facilities in such manner, upon such conditions, and to such extent as he\nshall deem necessary or appropnate to promote the national defense.\n50 U S C . app. \xc2\xa7 2071(a).\n\n664\n\n\x0cence to other orders, or requiring the acceptance and performance\nof particular orders.\nId.; see also H.R. Rep. No. 639, 82d Cong., 1st Sess. 21-22 (1951). The report\n\nof the Senate committee on amendments added to the DPA in 1952 cautions,\nhowever, that the section should be used \xe2\x80\x9c only where necessary or appropriate to\npromote the national defense. [It] should not be used to accomplish purposes,\nhowever meritorious, which bear no relation to national defense.\xe2\x80\x9d S. Rep. No.\n1599, 82d Cong., 2d Sess. 7 (1952).\nIn a petroleum emergency, \xc2\xa7 101(a) could give the President authority, inter\nalia, to require acceptance of and priority performance under contracts relating to\nthe production, delivery, or refining of petroleum products or to allocate supplies\nof petroleum products, depending on the circumstances of the emergency.58\nSection 101(a) might also be used to facilitate petroleum transportation during an\nemergency, for example, by requiring pipelines, marine terminals, and other\nfacilities to perform oil transport contracts necessary or appropriate to promote\nthe national defense.\nThe President\xe2\x80\x99s authority would be subject to certain limitations or would have\nto rest on certain findings required by the DPA. First, the requisite \xe2\x80\x9c national\ndefense\xe2\x80\x9d nexus must exist. Use of the authority provided by \xc2\xa7 101(a) specifically\nto respond to a petroleum emergency would have to be based on a presidential\ndetermination that the emergency threatens or adversely affects the national\ndefense, as that term is defined in the Act.59 However, as noted above, Congress\nhas specifically recognized that national defense concerns may be implicated by a\nshortfall in energy supplies, particularly a shortfall resulting from actions occur\xc2\xad\nring outside the United States. See supra at 663. Especially in light of this clear\ncongressional intent, a presidential determination that a substantial reduction in\npetroleum supplies affects the national defense and security of the United States\nwould be given considerable deference by the courts. See generally Federal\nEnergy Administration v. Algonquin SNG, Inc., supra, 426 U.S. at 561.\nSecond, the President\xe2\x80\x99s authority is limited by \xc2\xa7 101(b), 50 U.S.C. app.\n\xc2\xa7 2071(b), which directs that the powers granted in \xc2\xa7 101(a) can be used to\n58 It is clear that Congress contemplated use of \xc2\xa7 101(a), as well as other DPA provisions, to control the\nperformance of petroleum-related contracts and to allocate petroleum products, if the President were to find such\naction necessary and appropriate to promote the national defense The 1950 House Report noted that increased\ndemand for certain metals for the military and other programs or for stockpiling \xe2\x80\x9c will inevitably cut down on the\nsupply available to industry generally, with consequent dislocations The same situation is present, to a greater or\nlesser extent, in the case of many other materials, such as many chemicals, petroleum , and in the case of many kinds\nof equipment \xe2\x80\x9d H R. Rep. No. 2759, 81st Cong . 2d Sess 7 (1950) (emphasis added). Moreover, the definition of\n\xe2\x80\x9c materials\xe2\x80\x9d subject to the President\xe2\x80\x99s allocation authority (\xe2\x80\x9c raw materials, articles, commodities, products,\nsupplies, components, technical information, and processes") is clearly broad enough to include petroleum\nproducts, especially in light of that legislative history. 5**501) S.C app \xc2\xa7 2152(b), H R Rep No 2759, supra, at\n7 That interpretation is confirmed by the language and legislative history of the provision of the ESA that clarified\nthat \xe2\x80\x9c energy\xe2\x80\x9d is a \xe2\x80\x9c strategic and critical material\xe2\x80\x9d within the meaning of the DPA\xe2\x80\x99s Declaration of Policy. S ee su p ra\nat 21\n59 As we noted above, the President s authority under \xc2\xa7 101(a) to direct pnority performance of contracts or to\nallocate materials, including petroleum, is not necessarily dependent on the existence of a petroleum emergency\nThat authority could be used, for example, to require performance of petroleum supply, production, or transporta\xc2\xad\ntion contracts or to allocate petroleum supplies on a timely basis, if necessary to meet the needs of a particular\ndefense program, even if no \xe2\x80\x9c emergency\xe2\x80\x9d situation exists.\n\n665\n\n\x0ccontrol the general distribution of material in civilian markets only if the\nPresident finds that the material is a \xe2\x80\x9c scarce and critical material essential to the\nnational defense\xe2\x80\x9d and that defense needs cannot be met without causing disloca\xc2\xad\ntions in that market that will create \xe2\x80\x9c appreciable hardship.\xe2\x80\x9d This section, which\nwas added to the DPA in 1953, was intended to address situations in which\ndefense needs cause a hardship in civilian markets by making large demands on a\nlimited resource or limited production capacity. The House report discussing the\n1953 amendment described the need and scope of this restriction:\nIn the proposed extension of the priorities and allocation au\xc2\xad\nthority the committee has taken cognizance of the conditions\nwhich exist today and has proposed that the powers not be used to\ncontrol the general distribution of any material in the civilian\nmarket except in special cases where otherwise, because of de\xc2\xad\nmands for national defense of a scarce and critical material, there\nwould be a significant dislocation in the civilian market resulting\nin appreciable hardship. Nickel at present provides an excellent\nillustration of the need for authority to provide for equitable\ndistribution of available civilian supplies. It is estimated that dur\xc2\xad\ning 1953 the military, AEC, and stockpile will take more than\none-half of the total supply. These requirements are so heavy as to\nmake it necessary to apportion, as equitably as possible, the\nresidual supply among civilian uses.\nH.R. Rep. No. 516, 83d Cong., 1st Sess. 5 (1953).60\nThus, \xc2\xa7 101(a) provides broader authority for the President to allocate scarce\nmaterials among defense agencies, contractors, or suppliers than to allocate\nsupplies of materials among refiners or importers, wholesalers, retailers, and\nend-users in the civilian market. If there were a direct defense requirement for the\nmaterial, the material could be allocated to defense agencies or programs or to\ntheir contractors upon a finding that such allocation is \xe2\x80\x9c necessary or appropriate\xe2\x80\x9d\nto meet those defense needs. A direct defense need could occur, for example, if\nthe material were required by defense preparedness programs of the Department\nof Defense, the atomic energy programs of the Department of Energy, certain\nprograms of the National Aeronautics and Space Administration, or by a con\xc2\xad\ntractor of those agencies. Use of \xc2\xa7 101(a) would be justified, inter alia, if\ndemand for the material exceeded available supply, if suppliers of a defenserelated material were unwilling or unable to supply that material to the govern\xc2\xad\n60 Another provision of the DPA, \xc2\xa7 701(c), 50 U .S C app. \xc2\xa7 2151(c), further limits the President\xe2\x80\x99s authority to\ncontrol the distribution of material in the civilian market Section 701(c) provides:\nW henever the President invokes th e powers given him in this Act to allocate any material in the\ncivilian market, he shall do so in such a manner as to make available, so far as practicable, for\nbusiness and various segments thereof in the normal channel of distribution of such material, a fair\nshare of the available civilian supply based, so far as practicable, on the share received by such\nbusiness under normal conditions during a representative period preceding any future allocation of\nmaterials: Provided, That the President shall, in the allocation of materials in the civilian market,\ngive due consideration to the needs o f new concerns and newly acquired operations, undue hardships\nof individual businesses, and the needs of smaller concerns in an industry.\n\n666\n\n\x0cment or to defense contractors, or if such a material were otherwise unavailable in\na timely fashion through ordinary commercial channels. To take one example, if,\nas a result of a national petroleum shortage, defense agencies or contractors could\nnot obtain sufficient petroleum products in time to meet the needs of defense\npreparedness programs, \xc2\xa7 101(a) could be used to require suppliers to provide\nadequate petroleum supplies without regard to their existing contractual commit\xc2\xad\nments. The DPA would relieve the seller of any liability for breach of contract\nresulting from compliance with such an order. 50 U.S.C. app. \xc2\xa7 2157.\nOn the other hand, the President\xe2\x80\x99s authority could not be used to control\ngeneral distribution in the civilian market unless he were to make the further\nfindings required by \xc2\xa7 101(b). Thus, in order to implement a general domestic\nallocation of petroleum products under \xc2\xa7 101(a) in response to a shortage of\npetroleum supplies, the President would have to find that defense needs for\npetroleum will reduce supplies of petroleum available to the civilian markets to\nthe point of causing \xe2\x80\x9c significant dislocation\xe2\x80\x9d and \xe2\x80\x9c appreciable hardship.\xe2\x80\x9d See 50\nU.S.C. app. \xc2\xa7 2071(b).\nThird, it is not entirely clear whether the allocation authority contained in\n\xc2\xa7 101(a) gives the President authority to impose price controls. The language of\nthat section, which allows the President to allocate materials and facilities \xe2\x80\x9c upon\nsuch conditions, and to such extent as he shall deem necessary or appropriate,\xe2\x80\x9d\nappears broad enough to authorize price controls.61 As a practical matter, the\nPresident could find that the allocation of materials, particularly from unwilling\nsuppliers, could not be accomplished without some form of price controls. As we\nhave noted before, that is the sort of presidential determination to which the\ncourts will ordinarily defer. See supra at 660. We note, however, that there is\nlegislative history that suggests Congress did not intend the authority contained\nin \xc2\xa7 101(a) to include authority to impose mandatory price controls. As enacted\nin 1950, the DPA empowered the President to impose general wage and price\ncontrols. See Act of 1950, ch. 932, Title IV, 64 Stat. 803. However, those\nprovisions were allowed to expire in 1953. In renewing other provisions of the\nDPA \'at that time, Congress specifically stated that the wage and price control\nprovisions were no longer necessary. See H.R. Rep. No. 516, 83d Cong., 1st\nSess. 2-3, 10-13 (1953). Therefore, in the absence of specific authorization, it is\npossible that a court may conclude that the DPA does not empower the President\nto impose mandatory price controls on materials, including petroleum, allocated\nunder \xc2\xa7 101(a).62 Cf. American Federation c f Labor v. Kahn, 618 F.2d 784,\n794\xe2\x80\x9496 (D.C. Cir.), cert, denied, 443 U.S. 915 (1979). Absent a specific factual\nsetting, it would be inappropriate to speculate further as to how this issue might\nbe resolved in the courts.\n61 That language is included only in clause (2) of \xc2\xa7 101(a), with respect to allocation of materials and facilities; it\ndoes not appear in the language of clause (1) authonzing the President to require acceptance of and pnonty\nperformance under contracts and orders C om pare 50 U S C app. \xc2\xa7 2071(a)(1) w ith id \xc2\xa7 2071(a)(2).\n62 This legislative history would not necessanly preclude some limited regulation respecting pnce, for example, a\nrequirement o f non-discriminatory pricing\n\n667\n\n\x0cFourth, the President cannot use the allocation authority in \xc2\xa7 101(a) to require\nrationing of gasoline among end-users. 50 U.S.C. app. \xc2\xa7 2075.63\n2. Section 101(c). Maximizing Domestic Energy Supplies\nSection 101(c) of the DPA, 50 U.S.C. app. \xc2\xa7 2071(c), provides that the\nPresident may require the allocation of, or the priority performance under,\ncontracts or orders relating to \xe2\x80\x9c supplies of materials and equipment in order to\nmaximize domestic energy supplies,\xe2\x80\x9d if he makes certain findings with respect\nto the need for the materials for either the exploration, production, refining,\ntransportation, or conservation of energy supplies, or for the construction and\nmaintenance of energy facilities.64 The President\xe2\x80\x99s authority under \xc2\xa7 101(c) may\nbe exercised \xe2\x80\x9c [notwithstanding any other provision of this A ct,\xe2\x80\x9d and therefore\nis not subject to the \xe2\x80\x9c national defense\xe2\x80\x9d requirement of \xc2\xa7 101(a) or the constraints\nimposed by \xc2\xa7 101(b), 50 U.S.C. app. \xc2\xa7 2071(a), (b). This section thus provides\nsome authority for the President to allocate materials in the civilian market, or to\nrequire priority performance of contracts, that is not dependent on a national\ndefense nexus or the findings required by \xc2\xa7 101(b).\nThe legislative history of \xc2\xa7 101(c) indicates that Congress\xe2\x80\x99 specific concern\nwas with bottlenecks in the production and transportation of energy caused by\nshortages in critical equipment needed for the production and transportation of\nenergy. Section 101(c) was added to the DPA in 1975by\xc2\xa7 104 of the EPCA. The\nReport of the Senate Committee on Interior and Insular Affairs on the Senate\nversion of the bill discussed the purpose of that provision as follows:\nSection 105 [of the Senate bill] authorizes the President to\nallocate supplies of materials and equipment associated with the\nproduction of energy supplies to the extent necessary to maintain\nand increase the production and transport of fuels. . . . This\nprovision was included in the title in an attempt to remedy critical\nshortages and misallocations of pipe, pumps, drilling rigs and\nroofbolts, which are currently plaguing energy producers.\nThe committee received the following testimony at a hearing\non February 27, 1974, from the Deputy Director at FEO:\nMr. Sawhill. Well, I think that we have impediments to our\ndomestic production. We have impediments because of the\nlack of tubular steel that we talked about before. We have\nimpediments because of the lack of drilling rigs in this\n63 This restriction was added by \xc2\xa7 103of the E SA , codi/teda* 5011.S C app \xc2\xa7 2075, and provides \xe2\x80\x9c [njolhingir\n[the DPA] shall be construed to authorize the President to institute, without the approval of the Congress, a progran\nfor the rationing o f gasoline among classes of end-users.\xe2\x80\x9d Because the \xe2\x80\x9c approval\xe2\x80\x9d of Congress would, of necessity\ntake the form o f plenary legislation, such authority would be derived from lhat legislation and not from \xc2\xa7 101(a)\n64 The President must find (1) that such supplies are \xe2\x80\x9c scarce, critical, and essential to maintain or furthei\n(i) exploration, production, refining, transportation, or (n) the conservation of energy supplies, or (iii) for thi\nconstruction and maintenance o f energy facilities;\xe2\x80\x9d and (2) that \xe2\x80\x9c maintenance or furtherance of exploration\nproduction, refining, transportation, or conservation of energy supplies or the construction and maintenance o\nenergy facilities cannot reasonably be accomplished without exercising the authority specified in paragraph (1) o\nthis subsection.\xe2\x80\x9d 50 U S C. app. \xc2\xa7 2071(c)(3).\n\n668\n\n\x0ccountry. In other words, no matter what the price is, there are\nonly so many wells we can drill, because there are only so\nmany rigs available and so much tubular steel available.\nS. Rep. No. 26, 94th Cong., 1st Sess. 34 (1975). This legislative history clearly\ncontemplates that \xc2\xa7 101 (c) could be used, in the event of a petroleum emergency,\nto maximize available energy supplies through reducing bottlenecks in the\nproduction and transportation of energy, for example, to facilitate delivery of\nequipment necessary for increased energy production.65\nIt is somewhat less clear whether Congress intended that \xc2\xa7 101(c) be used to\nallocate supplies of energy sources, such as petroleum products. Section 101(c)\nuses the term \xe2\x80\x9c materials and equipment.\xe2\x80\x9d As we have noted, the definition of\n\xe2\x80\x9c materials\xe2\x80\x9d contained in the DPA, 50 U.S.C. app. \xc2\xa7 2152(b), includes pe\xc2\xad\ntroleum products. See supra n.58. However, the language of the Senate Report\nquoted above seems to indicate that the Senate intended the section to encompass\nonly supplies of hardware such as parts and equipment, as distinguished from\nenergy sources such as crude oil, petroleum, coal, natural gas, or petrochemical\nfeedstocks. The authority has been used to date only for that purpose\xe2\x80\x94 i.e ., to\nprovide assistance to energy production or transportation projects in obtaining\nscarce equipment and supplies. See, e.g., 10 C.F.R. Pt. 216.\nThere is legislative history, however, that supports the contrary conclusion that\n\xc2\xa7 101(c) was intended to give the President some authority to allocate energy\nsupplies, including petroleum products, if the requisite findings are made.\nSenator Randolph, one of the conference bill\xe2\x80\x99s floor managers, stated in his\nremarks introducing the bill on the floor of the Senate:\nMr. President, the Energy Policy and Conservation Act deals with\nseveral matters affecting domestic energy supply availability in\ngeneral. Some provisions of S. 622 address leasing practices on\nthe Outer Continental Shelf and other Federal lands, as well as the\navailability of energy supplies and equipment fo r the production\nc f domestic energy supplies. For example, authority is provided to\n\nassure that roof bolts are available for use in the underground\nproduction of coal\xe2\x80\x94 a significant restraint on coal production\nduring the oil embargo in the winter of 1973.\n121 Cong. Rec. 41022 (Dec. 16, 1975) (emphasis added). Moreover, neither the\nlanguage of the section nor the legislative history suggests that \xe2\x80\x9c materials\xe2\x80\x9d as\nused in \xc2\xa7 101(c) should be defined more narrowly than \xe2\x80\x9c materials\xe2\x80\x9d as used in\n\xc2\xa7 101(a) which, as noted above, include energy sources such as crude oil and\npetroleum products. In fact, Congress\xe2\x80\x99 intent in placing this authority in the DPA\nrather than in the EPCA was to prevent the creation of two overlapping and\n65 Because the authonty under \xc2\xa7 101(c) to require performance of contracts is limited to contracts or orders\n\xe2\x80\x9c relating to supplies of materials and equipm ent,\xe2\x80\x9d 50 U.S C. app \xc2\xa7 2071(c), it is questionable whether \xc2\xa7 101(c)\nprovides authority to require performance of service contracts. Thus, there is some doubt, for example, whether\n\xc2\xa7 101(c) would support a requirement that a pipeline, manne terminal, or other facility provide transportation\nservices\n\n669\n\n\x0cpossibly inconsistent statutory schemes. Senator Proxmire, the sponsor of the\namendment to place the authority in \xc2\xa7 101 of the DPA, explained its effect as\nfollows:\n[The amendment] is offered to avoid a duplicate allocation mech\xc2\xad\nanism, which could very well conflict with the priorities and\nallocations program provided for defense programs under [the\nDPA]. . . .\nThe effect, then, of the amendment which I have proposed is\nessentially to take our existing and working allocation system and\nto broaden it to include domestic energy supplies, while at the\nsame time to provide the authority to reconcile different claims on\na basis that will best serve the total national interest. . . .\n121 Cong. Rec. 9162 (Apr. 7, 1975) (remarks of Sen. Proxmire).\nThus, although the issue is not free from doubt because of the somewhat\nconflicting legislative history, \xc2\xa7 101(c) could possibly also be used by the\nPresident to allocate an energy source such as petroleum products. As a practical\nmatter, however, the usefulness of that authority may be significantly limited by\nthe requirement of \xc2\xa7 101(c) that the allocation be necessary to \xe2\x80\x9c maximize\ndomestic energy supplies.\xe2\x80\x9d 66 The legislative history of the section suggests\nstrongly that Congress\xe2\x80\x99 intent was to enable the President to take action to\nincrease supplies of energy, not to distribute existing energy supplies. See supra\nat 668-69. While it is conceivable that in limited situations the allocation of\npetroleum products might serve to increase energy production,67 it is unlikely\nthat in the event of a severe petroleum shortage \xc2\xa7 101(c) could be relied upon to\ninstitute a general allocation o f scarce supplies of petroleum among oil com\xc2\xad\npanies, regions, or end-users.\n3. Section 708. Voluntary Agreements\nSection 708 of the DPA, 50 U .S.C . app. \xc2\xa7 2158, provides a limited antitrust\ndefense for persons who carry out voluntary agreements \xe2\x80\x9c to help provide for the\ndefense of the United States through the development of preparedness programs\nand the expansion of productive capacity and supply beyond levels needed to\nmeet essential civilian demand in the United States.\xe2\x80\x9d The section empowers the\nPresident to authorize the making of such voluntary agreements when he finds\nthat \xe2\x80\x9c conditions exist which may pose a direct threat to the national defense or its\n66 The authority to allocate materials under \xc2\xa7 101(c) is also dependent on a finding that the materials are \xe2\x80\x9c scarce\nand critical.*1 S e e 50 U .S .C . app. \xc2\xa7 2071(c)(3). Absent a finding of scarcity, \xc2\xa7 101(c) would nol be available to\nallocate energy sources In a petroleum interruption, it is likely that this finding could be made, but the availability of\nthe authonty would obviously depend on the facts of any particular situation.\n67 There may be some circumstances that would justify a presidential finding that allocation of petroleum products\nis necessary to \xe2\x80\x9c maximize energy supplies.\xe2\x80\x9d For example, the allocation of petroleum supplies to utilities could be\nnecessary to maximize production of electricity. Arguably, the allocation of petroleum products for use in energy\nexploration, production, or transportation, such as building or maintaining oil ngs and refinenes, might serve to\nincrease total energy production in times o f a petroleum shortfall. Allocation to end-users who adopt stnngent\nconservation measures could also arguably provide for the most efficient use of available supplies and therefore\nincrease total supplies.\n\n670\n\n\x0cpreparedness programs.\xe2\x80\x9d 50 U.S.C. app. \xc2\xa7 2158(c)(1).68 Persons or companies\nparticipating in approved voluntary agreements may claim an antitrust defense\nwith respect to any act or omission taken in good faith in the course of developing\nor carrying out such an agreement. Id. \xc2\xa7 2158(j). No voluntary agreement may\nbe approved unless the Attorney General finds that its purpose \xe2\x80\x9c may not reason\xc2\xad\nably be achieved through a voluntary agreement having less anticompetitive\neffects or without any voluntary agreement.\xe2\x80\x9d Id. \xc2\xa7 2158(f)(1).69\nThe purpose of voluntary agreements authorized by \xc2\xa7 708 is specifically \xe2\x80\x9c to\nhelp provide for the defense of the United States through the development of\npreparedness programs and the expansion of productive capacity and supply\nbeyond levels needed to meet essential civilian demand in the United States.\xe2\x80\x9d 50\nU .S.C. app. \xc2\xa7 2158(c). Because of the scope of the President\xe2\x80\x99s authority under\nthe DPA to determine the reach of the term \xe2\x80\x9c national defense\xe2\x80\x9d and the explicit\ncongressional recognition of the importance of energy preparedness to the\nnational defense (see supra at 663), \xc2\xa7 708 could be used to authorize a broad\nrange of voluntary agreements among oil companies or with others to plan for or\ndeal with a substantial petroleum shortage that may impair the national defense or\nnational defense preparedness,70 and would make available an antitrust defense\nfor actions taken to formulate or implement such agreements.\nWith respect to energy-related activities, however, the \xc2\xa7 708(j) antitrust de\xc2\xad\nfense is available only for domestic activities taken to develop or carry out a\nvoluntary agreement. Section 708A(o), 50 U.S.C. app. \xc2\xa7 2158a(o), makes the\nantitrust defense unavailable for voluntary agreements to carry out the IEP71 or to\n68 The original DPA \xc2\xa7 708, enacted in 1950 and patterned after the 1942 Small Business Mobilization Act, gave\nthe President broad authority to convey antitrust immunity:\n(b) No act or omission to act pursuant to this Act, . . if requested by the President pursuant to a\nvoluntary agreement or program approved . . (by him] and found by the President to be in the\npublic interest as contributing to the national defense shall be within the prohibitions of the antitrust\nJaws. . . .\nThere were few procedural restrictions on the exercise of this authority Section 708 was substantially revised in\n1975 in conjunction with legislative enactment of \xc2\xa7 252 of the EPCA, 42 U .S.C . \xc2\xa7 2172. The 1975 DPA\namendments reduced the antitrust immunity to a defense, adopted the \xe2\x80\x9c good faith" requirement, and imposed\nprocedural safeguards comparable to those contained in \xc2\xa7 252 of the EPCA. See Pub. L. No. 94-152, \xc2\xa7 3 ,8 9 Stat.\n810 (1975).\n69 The DPA requires the Attorney General, afterconsultation with the FTC, to approve rules for the development\nof voluntary agreements and any voluntary agreement itself 50 U.S C . app. \xc2\xa7 2158(e), (0 An agreement may be\ndeveloped only at meetings in which the Attorney General and an FTC representative participate, and the Attorney\nGeneral and the FTC are required to monitor the implementation of any voluntary agreement. Id \xc2\xa7 2 158(e)(3), (g).\nThe Attorney General is granted the authonty to terminate an agreement at any time. Id . \xc2\xa7 2158(h) The Attorney\nGeneral and the FTC are given access to all relevant information, and have rulemaking authonty to carry out their\nresponsibilities. Id . \xc2\xa7 2158(h), (i) Finally, both the Attorney General and the FTC are required to conduct surveys of\nthe competitive effects of voluntary agreements, and the Attorney General must submit reports to Congress on the\nadministration of any operative agreements. Id \xc2\xa7 2158(k).\n70 The authonty contained in \xc2\xa7 708 has been used in the past to authorize cooperation and exchange of\ninformation relating to the impact of petroleum shortages on the national defense A \xe2\x80\x9c Voluntary Agreement Related\nto the Supply o f Petroleum to Friendly Foreign Nations\xe2\x80\x9d was approved by the Attorney General and entered into on\nJune 26, 1951. It was superseded by the \xe2\x80\x9c Voluntary Agreement on Foreign Petroleum Supply\xe2\x80\x9d approved June 1,\n1953. This Agreement, formed under the sponsorship of the Department of the Intenor, remained in effect until\n1976. The Agreement was activated in response to international events, including the nationalization of the Suez\nCanal, the 1967 Six Days War, and the 1973 Yom Kippur War.\n71 As discussed above, \xc2\xa7 252 of the EPCA, 42 U.S C. \xc2\xa7 6272, provides the only statutory antitrust defense for\nindustry activities pursuant to authonzed voluntary agreements or plans of action in support of the IEP. S ee su p ra at\n660-61. Section 708A(o) was added to the DPA at the time the EPCA was enacted, apparently with the intent of\nlimiting duplication in the scope of \xc2\xa7 252 of the EPCA and the existing antitrust defense in the DPA. See 121 Cong\nC o ntinued\n\n671\n\n\x0cvoluntary agreements which \xe2\x80\x9c in whole or in part\xe2\x80\x9d are in furtherance of a \xe2\x80\x9c treaty\nor executive agreement to which the United States is a party or to implement a\nprogram of international cooperation between the United States and one or more\nforeign countries.\xe2\x80\x9d This precludes use of \xc2\xa7 708 to implement any voluntary \xe2\x80\x9c fair\nsharing\xe2\x80\x9d program to meet IEP obligations,72 or to fulfill international obligations\nsuch as NATO oil supply commitments and the United States-Israel oil supply\nagreement.\nIn order to qualify for the defense, the conduct in question must have been\nundertaken in good faith, and the persons claiming the defense must have acted in\naccordance with the statute, applicable regulations, and the applicable voluntary\nagreement. 50 U.S.C. app. \xc2\xa7 2158(j). The procedures imposed on meetings to\ndevelop and carry out voluntary agreements under \xc2\xa7 708 of the DPA are quite\nsimilar to those imposed by \xc2\xa7 2 5 2 o f the EPCA, 42 U.S.C. \xc2\xa7 6272. Public notice\nmust be given, and the public must be afforded an opportunity to participate\n(unless the meeting concerns classified matters, matters specifically exempted by\nstatute from disclosure, or matters related to trade secrets and proprietary data);\nthe meeting must be attended by a federal employee (and chaired by the\nPresident\xe2\x80\x99s delegate if the meeting is to develop a voluntary agreement) and must\nbe monitored by representatives of the Attorney General and the FTC; if the\nmeeting is to develop a voluntary agreement, records and verbatim transcripts\nmust be kept. The President\xe2\x80\x99s delegate or the Attorney General (after consultation\nwith the FTC) may terminate o r modify an agreement. Id. \xc2\xa7 2158(e). Unlike\n\xc2\xa7 252, however, \xc2\xa7 708 does not contain any specific provision for adoption of\nplans of action.\nSection 708(d), 50 U.S.C. app. \xc2\xa7 2158(d), provides for establishment of\nadvisory committees to aid the President or his delegated officers in carrying out\nthe purposes of the section. Such committees would be subject to the provisions\nof the Federal Advisory Committee Act, 5 U.S.C. app. \xc2\xa7\xc2\xa7 1-15 (1982) and\nprovisions of the Federal Energy Administration Act of 1974, 15 U.S.C. \xc2\xa7 776.\nSection 708(d) further provides that \xe2\x80\x9c in all cases such advisory committees . . .\nshall include representatives of the public, and the meetings of such committees\nshall be open to the public.\xe2\x80\x9d 50 U.S.C. app. \xc2\xa7 2158(d)(1).\n4. Section 710. Employment of Persons from the Private Sector\nPursuant to \xc2\xa7 710 of the DPA, 50 U.S.C. app. \xc2\xa7 2160, the President may,\nsubject to certain restrictions, authorize the training and employment of persons\nfrom the private sector in order to facilitate planning for and responding to energy\nemergencies. Two methods of facilitating such training and employment are\nauthorized by this section. Subsection (b) permits the President to employ\n\xe2\x80\x9c persons of outstanding experience and ability\xe2\x80\x9d to serve without compensation\nRec. 36619(N ov 14, 1975) (remarks of Reps. Dingell and Ashley). The amendment also had the effect, however, of\nnarrowing the scope o f the existing DPA provision and of the original House bill, which had provided antitrust\nprotection for international voluntary agreements beyond the IEP.\n12 S e e su p ra at 659-60\n\n672\n\n\x0cin advisory positions for purposes of assisting in carrying out the purposes and\nprovisions of the DPA. Id. \xc2\xa7 2160(b). Subsection (e) authorizes the establish\xc2\xad\nment and training of a \xe2\x80\x9c nucleus executive reserve\xe2\x80\x9d (Executive Reserve) for\nemployment during \xe2\x80\x9c periods of emergency.\xe2\x80\x9d Id. \xc2\xa7 2160(e). Use of these au\xc2\xad\nthorities to obtain advice and assistance from the private sector in planning for or\nresponding to an emergency caused by a petroleum shortage raises two legal\nissues: (1) the circumstances under which these authorities can be used; and\n(2) the applicability of conflict-of-interest and antitrust laws and regulations.\na. Circumstances Governing Use of Employees\nPersons serving without compensation (WOCs), under \xc2\xa7 710(b), 50 U.S.C.\napp. \xc2\xa7 2160(b) may be used as necessary and appropriate to carry out the\nprovisions of the DPA. Their service is not limited to times of emergency, and\nWOCs can therefore be employed for a variety of preparedness tasks, such as\nassisting in planning, providing counsel and assistance in conducting exercises\nor seminars, or assisting state and local officials to develop emergency prepared\xc2\xad\nness plans and programs. WOCs may be employed, however, only if the employ\xc2\xad\ning department or agency head certifies that he or she has been \xe2\x80\x9c unable to obtain\na person with the qualifications necessary for the position on a full-time, salaried\nbasis,\xe2\x80\x9d and that the appointment is necessary and appropriate to carry out\nprovisions of the DPA. 50 U.S.C. app. \xc2\xa7 2160(b)(1), (5). WOCs may be\nappointed only to advisory or consultative positions, except that they may be\nappointed to decisionmaking (but not policymaking) positions if they are found\nto possess outstanding experience and ability not obtainable on a full-time,\nsalaried basis. Id. \xc2\xa7 2160(b)(2).\nUnder subsection (e), 50 U.S.C. app. \xc2\xa7 2160(e), persons from either the\nprivate sector or from within the federal government may be appointed to an\nExecutive Reserve.73 During \xe2\x80\x9c periods of emergency\xe2\x80\x9d those individuals may be\nemployed by the government either as regular federal employees or as WOCs.\nSee S. Rep. No. 696, 84th C ong., 1st Sess. 9 (1955). Employment of a Reservist\nas a WOC would, of course, be subject to the limitations imposed by subsection\n(b). However, employment of a Reservist as a regular full- or part-time federal\nemployee would not be subject to the limitations contained in subsection (b) with\nrespect to use of the individual in decisionmaking or policymaking positions or\nwith respect to compensation,74 and would not require the employing federal\n73 By executive order, the President has established a \xe2\x80\x9c National Defense Executive Reserve," which is composed\nof \xe2\x80\x9c persons selected from various segments of the civilian economy and from government for training for\nemployment in executive positions in the Federal Government in the event of the occurrence of an emergency that\nrequires such employment.\xe2\x80\x9d Exec O rder No 11,179, 3 C F R . 246 (1964-65), a s a m en d ed b y Exec. O rder No.\n12,148, 3 C F.R. 412 (1979). In addition, the President has delegated authonty to employ WOCs to heads of\ndepartments or agencies that exercise DPA functions. Exec Order No 10,647, 3 C F.R. 282 (1954-58), as\na m e n d e d b y Exec Order No. 11,355, 3 C.F.R. 653 (1966-70), W E x e c O rderN o 12,107, 3 C .F R . 264 (1978).\n74 The only provision respecting compensation of Reservists is that members who are not full-time government\nemployees may be allowed transportation and per diem payments for the purpose of participating in the Executive\nReserve training program In the absence o f any further restriction, it appears that Reservists could be employed as\nfull-time, part-time, temporary, or unsalaried government employees in times of emergency. The legislative history\nof subsection (e) supports this conclusion. S ee S Rep. No. 696, 84th Cong., 1st Sess. 9 (1955).\n\n673\n\n\x0cagency to find that no full-time federal employee is available and qualified to\nperform functions to be performed by the Reservist.\nThe major limitation on the President\xe2\x80\x99s authority to use the Executive Reserve\nis that Reservists can be employed by the government only \xe2\x80\x9c during periods of\nemergency.\xe2\x80\x9d See 50 U.S.C. app. \xc2\xa7 2160(e).75 The DPA does not define what\nconstitutes an \xe2\x80\x9c emergency\xe2\x80\x9d for purposes of activation of the Reserve.76 Section\n710(e), however, must be read in light of the purpose of the DPA to protect and\npromote the national defense, as expressed in the Declaration of Policy. Subsec\xc2\xad\ntion (e), authorizing the Executive Reserve, was added to the DPA in 1955. At the\nsame time, the Declaration o f Policy was amended to include a specific con\xc2\xad\ngressional finding that the Nation\xe2\x80\x99s mobilization program requires the develop\xc2\xad\nment of preparedness programs and the expansion of productive capacity and\nsupply \xe2\x80\x9c in order to reduce the time required for full mobilization in the event of\nan attack on the United States.\xe2\x80\x9d See S. Rep. No. 696, 84th Cong., 1st Sess. 9\n(1955). The Senate Rejxtrt draws a direct link between authorization of the\nExecutive Reserve and the Declaration of Policy:\nThis provision [now section 710(e)] supports the added emphasis\nplaced on preparedness for a period of full mobilization in the\nDeclaration of Policy.\nId. at 8. The legislative history o f subsection (e) thus makes clear that establish\xc2\xad\n\nment and training of the Reserve and employment of Reservists is specifically\nintended to further the national defense preparedness aims of the DPA.77\nTherefore, activation of the Reserve would depend on the existence of an\nemergency that, in the language of the Declaration of Policy, \xe2\x80\x9c would adversely\naffect the national defense preparedness of the United States.\xe2\x80\x9d 50 U.S.C. app.\n\xc2\xa7 2062.78 Likewise, although \xc2\xa7 710 does not limit in haec verba the functions\n73 This limitation does not preclude participation by Reservists in orientation and training, it does, however,\npreclude participation in the type of pre-emergency preparedness tasks that may be performed by WOCs\n76 No other provision of DPA specifically limits the President\'s authority to \xe2\x80\x9c periods of emergency.\xe2\x80\x9d\n77 W hen Congress intended to eliminate the requirement of a \xe2\x80\x9c national defense\xe2\x80\x9d nexus, as in \xc2\xa7 101(c), 50 U .S.C.\napp. \xc2\xa7 2071(c), it did so in express terms S ee s u p r a a t6 6 $ . The absence of any such limitation in \xc2\xa7 710(e) is further\nevidence that Congress did not intend that th e Executive Reserve be used for purposes unrelated to the national\ndefense. S e e g en e ra lly U nited States v. R u th erfo rd , 442 U .S. 544, 552 (1979), K S K Jew elry Co. v. C hicago\nS h era to n C orp., 283 F.2d 8, 11 (7th Cir. 1960).\n78 Section 710(e) does not, however, expressly require the President to declare a national emergency in order to\nactivate the Reserve. S e e 50 U .S.C . app. \xc2\xa7 2160(e). Therefore, we believe use of the Reserve is not subject to the\nprovisions o f the National Emergencies Act (NEA), 50 U .S .C . \xc2\xa7\xc2\xa7 1601-1651 (1982). The legislative history of the\nNEA makes clear that use of authorities under the DPA, such as the Executive Reserve, is not subject to that Act In\ntestimony before the House Subcommittee on Administrative Law and Governmental Relations, Assistant Attorney\nGeneral Scalia o f the Office o f Legal Counsel noted that:\n[L]aws like the Defense Production A ct of 1950, which do not require a Presidential declaration of\nem ergency for their use, are not affected by this title [i.e .. Title I]\xe2\x80\x94 even though they may be referred\nto in a lay sense as \xe2\x80\x9c emergency\xe2\x80\x9d statutes.\nH ea rin g s before th e S u b c o m m itte e on Adm inistrative L aw a n d G overnm ental R elations c f the C o m m ittee o n the\nJudiciary, H o u se c f R epresentatives, 94th C ong., 1st Sess. 91 (1975). That comment is repeated in both the House\n\nand Senate reports. See H .R . Rep. No 238,94th Cong., 1st Sess. 5 (1975), S. Rep. No. 1168, 94th Cong., 2d Sess.\n4 (1976). Although this language refers only to Title 1 of the NEA, which terminated existing emergencies, there is\nnothing in the legislative history to suggest that the DPA is subject to the procedural requirements imposed by Title II\nof the NEA with respect to the future use of emergency authorities Rather, the Senate Report states that \xe2\x80\x9c (t]he\nprovisions o f Title II . . . are designed to insure congressional oversight of Presidential actions p u rsu a n t to\nd ec la ra tio n s c f a n a tio n a l e m erg en cy a u th o n z e d by an a c t c f C ongress. . . . The legislation is directed solely to\nPresidential d e c la ra tio n s c f em ergency \xe2\x80\x9d S. R ep No 1168, supra at 4 (emphasis added).\n\n674\n\n\x0cthat can be performed by Executive Reservists in the event of activation, the\ninclusion of authority for the Executive Reserve in the DPA and the legislative\nhistory of that section make clear that those functions are limited to achievement\nof the national defense preparedness and response purposes of the DPA.\nAs discussed above, however, the DPA\xe2\x80\x99s Declaration of Policy expressly\ncontemplates that disruptions in energy supplies may affect the national defense\ninterests of the United States. See supra at 663. Therefore, the President has\nbroad discretion, in the event of a disruption in petroleum supplies, to determine\nthat an energy emergency exists that could threaten national security or national\ndefense preparedness and that would therefore justify activation and use of the\nExecutive Reserve to assist in meeting the emergency.\nb. Conflict-of-interest and Antitrust Restrictions\nA second question is whether individuals who serve as WOCs or Executive\nReservists would be subject to conflict-of-interest restrictions imposed by federal\nlaws and regulations or to liability under the antitrust laws. We believe that\nWOCs and Executive Reservists would be subject to conflict-of-interest and\nantitrust restraints, but the nature of these restraints could differ depending on the\ncircumstances of their government employment and the nature of their ties to\nprivate employers.\n1)\nConflict-qf-lnterest Restrictions: Applicability of federal conflict-of-interest\nrestrictions to WOCs and Executive Reservists would depend on whether those\nindividuals would be considered to be federal officers or employees within the\nmeaning of applicable statutes and regulations. The Federal Personnel Manual\n(FPM), App. C ., sets forth the principles for determining whether persons\nserving the federal government on a temporary or intermittent basis are subject to\nthe conflict-of-interest laws. Briefly, the FPM distinguishes between (1) persons\n\xe2\x80\x9c whose advice is obtained by an agency . . . because of [their] individual\nqualifications and who serve . . . in an independent capacity\xe2\x80\x9d and (2) persons\nwho are asked \xe2\x80\x9c to present the views o f . . . nongovernmental organization^] or\ngroup[s] which [they] represent, or for which [they are] in a position to speak.\xe2\x80\x9d\nFPM, App. C at C -6. The former category of independent experts are deemed to\nbe subject to the conflict-of-interest laws because their service to the government\nis expected to be impartial and free from outside influence or control. The latter\ncategory of private representatives, on the other hand, are not subject to the\nconflict-of-interest laws because it is expected that such persons would be\ninfluenced by the private groups that they have been chosen to represent.79\nWe believe that the language and legislative history of \xc2\xa7 710 are clear that the\npurpose of employment of WOCs and Executive Reservists is to obtain independ79 We have found that these FPM criteria are ordinarily the most useful standards to apply in determining whether\nparticular persons are federal employees for purposes of the conflict-of-interest laws. There are, however, other\nfactors that may be relevant to such a determination For example, if a person performs a government function,\nreceives a government salary, or is supervised directly by government employees, it is likely that he or she will be\ndeemed a federal employee for other personnel purposes. S ee 5 U S C \xc2\xa7 2105(a)(1982),and L o d g e 1858, A F G E \\.\nN A SA , 424 F Supp. 186 (D .D .C . 1976)\n\n675\n\n\x0cent assistance and advice from uniquely qualified individuals,80 and that there\xc2\xad\nfore those individuals would be considered to be federal employees subject to\nconflict-of-interest restrictions, when they are actually employed to provide such\nassistance and advice.81 The scope of the conflict-of-interest restrictions applica\xc2\xad\nble to a particular individual would depend, inter alia, on whether the individual\nis a \xe2\x80\x9c special government employee\xe2\x80\x9d 82 and whether he or she receives compensa\xc2\xad\ntion for his or her services.\nSince WOCs or Reservists could be employed by any of several federal\nagencies, consistent with the scope of the DPA, it is impossible to summarize\nhere all of the applicable conflict-of-interest statutes and agency conduct stand\xc2\xad\nards. We note, however, that 18 U.S.C. \xc2\xa7\xc2\xa7 208 and 209 would be of particular\nconcern to an individual who comes from private employment to serve the federal\ngovernment on a temporary or intermittent basis as a WOC or Executive Reserv\xc2\xad\nist. Section 208 imposes criminal penalties on any government employee,\nincluding a special government employee, who participates personally and\nsubstantially for the government in a matter in which he, his spouse or minor\nchild, or a partner or an organization by which he is employed, has an arrange\xc2\xad\nment for future employment, or is negotiating concerning employment, or has a\nfinancial interest. Under appropriate circumstances, government agencies may\ngrant waivers of this prohibition. See 18 U.S.C. \xc2\xa7 208(b). Section 209 imposes\ncriminal penalties on any regular government employee who receives any salary,\nor contribution to or supplementation of a salary, from a private source as\ncompensation for services as a government employee. Id. \xc2\xa7 209.83 Special\ngovernment employees and employees serving without compensation are not\nprohibited by \xc2\xa7 209 from accepting a salary from an outside source for perform\xc2\xad\nance of their government duties. Id. Apart from \xc2\xa7 209, the standards of conduct\nof the employing agency may limit the receipt of gifts or certain things of value by\nindividuals subject to the standards, if the source of the compensation has a\nbusiness relationship with the agency. Those limitations may differ depending on\nwhether the individual is a regular or special government employee.84\n80 In fact, \xc2\xa7 710 originally provided for an exemption from the federal conflict-of-interest laws for WOCs and\nReservists, which demonstrates that Congress certainly contemplated that such individuals would be considered to\nbe federal employees for purposes of the conflict-of-interest laws. When the federal conflict-of-interest laws were\nrecodified in 1962, the recodification act made that exemption inapplicable Pub. L No 87-849, \xc2\xa7 2 ,7 6 Stat 1126\n(1962)\n81 We do not believe that Executive Reservists would generally be considered officers or employees of the federal\ngovernment during orientation o r training for mobilization assignments, because they would not normally act or\nadvise on any mailers pending before a federal department or agency during such periods. If, however, the\nresponsibiJities o f a Reservist dunng training o r onentation included assistance or advice to a federal department or\nagency, the conflict-of-interest restriciions w ould probably apply, depending on the facts of the particular situation.\n82 A \xe2\x80\x9c special government employee\xe2\x80\x9d is a federal employee o r officer who serves for no more than 130 days\nduring any period of 365 days, on a full-time o r intermittent basis. S e e generally 18 U S C \xc2\xa7 202(a). Under federal\npersonnel rules, an agency may not appoint an individual to serve as a special government employee unless \xe2\x80\x9c at the\ntime of his original appointm ent\xe2\x80\x9d the agency\xe2\x80\x99s \xe2\x80\x9c best estimate\xe2\x80\x9d is that dunng the following 365-day period the\nservices o f the appointee will be needed for 130 days or less. S e e FPM, App C\n83 Section 209 also imposes criminal penalties on any organization or individual that makes any such contnbution\nor supplem entation 18 U S.C . \xc2\xa7 209(a)\n84 For exam ple, regulations o f the Department o f Energy prohibit regular employees from accepting fees,\ncom pensation, gifts, payment of expenses, or any other thing of monetary value if the circumstances \xe2\x80\x9c may result in,\no r create the appearance of, a conflict of in te re st\xe2\x80\x9d 10 C .F R . \xc2\xa7 1010 204(a) See also \xc2\xa7 1010 604 (special\nC o n tin u e d\n\n676\n\n\x0cOther provisions of the federal criminal code impose restrictions on the ability\nof government employees to assist private parties in matters involving the\ngovernment,85 and on former government employees representing others in\nmatters that they worked on or were responsible for, while in the government.86\nAdditional restrictions may be imposed by statutes that are specific to the\nemploying agency. The Department of Energy Organization Act, for example,\nimposes requirements or restrictions on certain Department employees with\nrespect to divestiture and disclosure of financial interests, reporting of pre- and\npost-govemment employment, and appearances before the Department after\nemployment. See 42 U.S.C. \xc2\xa7\xc2\xa7 7211-7216.\n2 ) Antitrust Exposure: Individuals who serve as WOCs or Executive Reserv\xc2\xad\nists and their private employers would also be subject to the antitrust laws. It is\nlikely that any individual called to government service as a WOC or as a regular\nfederal employee would retain some ties with his or her former private employer,\nand would probably return to private employment upon completion of govern\xc2\xad\nment service. In light of these dual public and private roles, actions taken by the\nindividual while employed by the government might raise questions of antitrust\nliability for the individual and the employer.87 Actions that may raise some\nquestion under the antitrust laws could include, for example:\n(1) advice to government policymakers with respect to govern\xc2\xad\nmental actions to be taken in markets in which the individual\xe2\x80\x99s\ncompany is involved;\n(2) decisions that affect particular energy markets;\n(3) agreements as to what actions are to be taken by their private\nfirms, particularly if those individuals implement such actions in\ntheir private capacities; or\n(4) exchange between private industry executives of confidential\nindustry information, gained pursuant to training activities or\ngovernmental responsibilities.\nIn general, antitrust liability attaches only to private conduct that has anticom\xc2\xad\npetitive conseqences. See Parker v. Brown, 317 U.S. 341 (1943); Sea-Land\ngovernment employees). Regulations issued by the Office of Personnel Management require that agency standards\nof conduct contain a provision that prohibits regular employees from soliciting or accepting any compensation or\nother thing of value, subject to certain exceptions, from a person who:\n(1) Has, o r is seeking to obtain, contractual or other business or financial relations with his agency;\n(2) Conducts operations or activities that are regulated by his agency, or\n(3) Has interests that may be substantially affected by the performance or nonperformance of his\nofficial duty.\n5 C .F R \xc2\xa7 735.202.\n85 See, e g , 18 U .S.C . \xc2\xa7\xc2\xa7 203, 205\n86 See, e.g . 18 U .S.C \xc2\xa7 207\n87 In general, antitrust exposure would probably be greatest when individuals are actually employed by the\ngovernment in policymaking or decisionmaking positions, because they would then be in a position to make or\naffect governmental decisions that may have an impact on a particular industry or employer. However, it is possible,\nthough less likely, that antitrust liability could attach for particular actions taken in the course of training and\norientation, for example, for an exchange with other industry personnel of confidential information gained during\nthe training program.\n\n677\n\n\x0cService, Inc. v. The Alaska Railroad, 659 F.2d 243 (D.C. Cir. 1981), cert,\ndenied, 455 U.S. 919 (1982). Thus, actions taken by a governmental official\n\nwithin the scope of his authority do not ordinarily give rise to antitrust concerns.\nOn the other hand, actions of WOCs or Reservists that cause competitive harm\ncould result in antitrust liability if such individuals are acting outside the scope of\ntheir governmental activity.88\nC . Trade Expansion A ct cf 1962\n\nThe Trade Expansion Act of 1962 (TEA), 19 U.S.C. \xc2\xa7\xc2\xa7 1801-1991, provides\nthe President with certain authority with respect to imports of crude oil and\npetroleum products, which may be available in.the event of a severe shortage of\npetroleum supplies. Section 232(b), 19 U.S.C. \xc2\xa7 1862(b), provides that, upon an\ninvestigation and finding that a commodity is entering the country \xe2\x80\x9c in such\nquantities or under such circumstances as to threaten to impair the national\nsecurity,\xe2\x80\x9d the President \xe2\x80\x9c shall take such action, and for such time, as he deems\nnecessary to adjust the imports of [the] article and its derivatives so that . . .\nimports [of the article] will not threaten to impair the national security.\xe2\x80\x9d\nPresidents have often exercised this authority to respond to emergencies of\ndifferent types and their actions have usually been sustained by the courts. In\nrecent decades, Presidents have invoked national security successfully to estab\xc2\xad\nlish quotas on volumes of imports, including oil,89 to establish license-fee\nsystems,90 to limit imports from certain countries,91 and to allocate oil imports\nexempt from import fees to certain refineries.92\nThe President\xe2\x80\x99s powers under \xc2\xa7 232(b) have received a broad interpretation.\nThe authority of the President to take \xe2\x80\x9c such action as he deems necessary\xe2\x80\x9d was\nbroadly construed by the Supreme Court in Federal Energy Administration v.\nAlgonquin SNG, Inc., 426U.S. 548 (1976), which upheld the President\xe2\x80\x99s power\nto impose license fees. Throughout its decision, the Court cited with approval\nthose portions of the legislative history that support the widest reasonable\ninterpretation of the President\xe2\x80\x99s authority, such as the statement that it included\nthe power \xe2\x80\x9c to take whatever action he deems necessary to adopt imports\n[including the use of] tariffs, quotas, import taxes or other methods of import\nrestrictions.\xe2\x80\x9d 426 U.S. at 564; see also id. at 558, 561-69.\nIn Algonquin, however, the Supreme Court also expressed the caveat that its\nopinion applied only to measures with an \xe2\x80\x9c initial and direct\xe2\x80\x9d effect on petroleum\nimports and not necessarily to presidential action with a \xe2\x80\x9c remote\xe2\x80\x9d effect on\n88 Cf. H arlow v F itzg era ld , 102 S. Ct 2727 (1982); Butz v. E conom ou, 438 U S 478 (1978); C o n tin en ta l Ore\nC o . v. U nion C a rb id e & C a rb o n Corp., 3 7 0 U.S. 690 (1962); A la b a m a Power C o. v. A la b a m a E lectric\nC o operative. I n c ., 394 F 2 d 672 (5th C ir), c e r t denied, 393 U .S. 1000 (1968)\n89 Proclamation 3279, 24 Fed. Reg. 1781 (Mar. 12, 1959) This proclamation was issued pursuant to a\npredecessor statute\n90 Proclamation 4210, 9 Weekly Comp. P res. Docs. 406 (A pr 18, 1973).\n91 President C arter utilized this authoniy to prohibit imports from Iran. Proclamation 4 7 0 2 ,4 4 Fed. Reg. 65581\n(Nov. 14, 1979).\n92 See , e g .. F E A v. A lg o n q u in SNG , In c., 4 2 6 U.S 548, 570-71 (1976); Pancoastal Petroleum L td. v. U dall,\n348 F 2 d 805, 807 (D .C . C ir 1965).\n\n678\n\n\x0cimports. 426 U.S. at 571.93 This caution suggests that a court might limit the\nPresident\xe2\x80\x99s broad flexibility under the TEA to regulate imports of crude oil or\npetroleum products to measures whose primary purpose and impact is confined\nto imported, rather than domestic, supplies of those products. It is possible,\ntherefore, that an attempt to control directly the price of, or to allocate, petroleum\nproducts refined in the United States would be ruled invalid by the courts, at least\nif the impact of such controls on oil imports would be remote and indirect and if\nthe impact on domestic supplies would be direct. In the absence of a particular\nfactual situation, however, we cannot predict whether the courts would strike\ndown such allocation or pricing regulation.\nExercise of authority under \xc2\xa7 232(b) must be based on a finding that the\nimports \xe2\x80\x9c threaten to impair the national security.\xe2\x80\x9d The statute provides some\nguidance with respect to that finding by listing a number of illustrative factors that\nmay be taken into account, as follows:\n(1) domestic production needed for projected national defense\nrequirements;\n(2) capacity of domestic industries to meet defense requirements;\n(3) existing and anticipated availabilities of the human resources,\nproducts, raw materials, and other supplies and services essential\nto the national defense;\n(4) requirements of growth of such industries and such supplies\nand services; and\n(5) the quantities, availabilities, character and use of imported\narticles as those affect such industries and the capacity of the\nUnited States to meet national security requirements.\n19 U.S.C. \xc2\xa7 1862(c).94\nThe legislative history of \xc2\xa7 232(b) firmly establishes that increasing the\ndomestic production of oil is a legitimate national security aim. See, e.g., 104\nCong. Rec. 10542-43 (June 9, 1958) (remarks of Rep. Mills). Recent practice,\ntacitly approved by the Supreme Court in Federal Energy Administration v.\nAlgonquin SNG, Inc., supra, suggests that reducing the consumption of oil may\nsimilarly be a legitimate national security aim. Thus, it seems likely that a court\nwould sustain a presidential finding that imports of crude oil and petroleum\nproducts \xe2\x80\x9c threaten to impair the national security,\xe2\x80\x9d see 19 U.S.C. \xc2\xa7 1862(b),\nand thereby uphold the use of \xc2\xa7 232(b).\n93 This dictum later was relied upon by a federal district court to strike down the Gasoline Conservation Fee\nimposed by President C arter on the ground that the fee was beyond ihe scope of the authority conferred by \xc2\xa7 232(b)\nIn d ependent G asoline M a rketers C ouncil v D uncan, 492 F Supp 6 1 4 ,616-18 (D.D C 1980). The court ruled that\nthe measure was principally a conservation measure and only indirectly a restriction on imports, and thus not\nauthorized by the TEA. The district court\xe2\x80\x99s decision has little, if any, precedential effect, because the appeal was\ndismissed as moot and the opinion vacated after the fee was repealed by Congress.\n94 The text and the legislative history o f this provision state that these considerations are illustrative but not\nexclusive. See S Rep. No. 1838, 85th Cong., 2d Sess 11-12 (1958)\n\n679\n\n\x0cD . International Emergency Economic Powers Act\n\nThe International Emergency Economic Powers Act (IEEPA), 50 U.S.C.\n\xc2\xa7\xc2\xa7 1701-1706(1982), provides the President, in the event of a national emergen\xc2\xad\ncy, with plenary control over property that is subject to U.S. jurisdiction and in\nwhich any foreign country or national thereof has an \xe2\x80\x9c interest.\xe2\x80\x9d See generally\nDam es & M oore v. Regan, 453 U.S. 654, 675 (1981). If a petroleum shortage is\nsufficiently severe to invoke a presidentially declared national emergency, the\nIEEPA could be used to control supplies of petroleum products in which foreign\ncountries or foreign nationals have an \xe2\x80\x9c interest.\xe2\x80\x9d\nThe key provision of the IEEPA is \xc2\xa7 203,50 U.S.C. \xc2\xa7 1702(a)(1), which states\nthat the President may:\n(A) investigate, regulate, or prohibit\xe2\x80\x94\n(i) any transactions in foreign exchange,\n(ii) transfer of credit or payments between, by, through, or\nto any banking institution, to the extent that such trans\xc2\xad\nfers or payments involve any interest of any foreign\ncountry or a national thereof,\n(iii) the importing o r exporting of currency or securities; and\n(B) investigate, regulate, direct and compel, nullify, void, pre\xc2\xad\nvent or prohibit, any acquisition, holding, withholding, use,\ntransfer, withdrawal, transportation, importation or exporta\xc2\xad\ntion of, or dealing in, or exercising any right, power, or\nprivilege with respect to, or transactions involving, any\nproperty in which any foreign country or a national thereof\nhas any interest;\nby any person, or with respect to any property, subject to the\njurisdiction of the United States.95\nThe reach of\xc2\xa7 203 is limited by \xc2\xa7 2 0 2 ,50U .S.C . \xc2\xa7 1701, which provides that\nthe President may use these authorities only to deal with an \xe2\x80\x9c unusual and\nextraordinary threat, which has its source in whole or substantial part outside the\nUnited States, to the national security, foreign policy, or economy of the United\nStates, if the President declares a national emergency with respect to such\nthreat.\xe2\x80\x9d Section 202 also requires that the President declare a new national\nemergency for each new threat before he may exercise the emergency powers. Id.\n95 This provision was taken almost verbatim from \xc2\xa7 5(b) of the Trading with the Enemy Acl (TWEA), 50 U.S C.\napp \xc2\xa7 I\xe2\x80\x9444 (1982), which gave the President certain authorities \xe2\x80\x9c [djuring time of war or during any other penod of\nnational em ergency declared by the President.\xe2\x80\x9d The IEEPA removed from the TWEA the President\xe2\x80\x99s authorities\n\xe2\x80\x9c during any other period of national emergency*\xe2\x80\x99 and placed those authorities in \xc2\xa7 203(a)(1) of the IEEPA, 50\nU S.C . \xc2\xa7 1702(a)(1). The TW EA currently provides the President with authonty \xe2\x80\x9c during time of war\xe2\x80\x9d that is\nidentical in most respects to that available under the IEEPA, but also permits the President to exercise some\nadditional powers not encom passed in the IEEPA, such as seizing and vesting of enemy property and control over\nwholly domestic economic transactions S ? e 5 0 U S.C. app. \xc2\xa7 5 (b )(l);H .R Rep No. 4 5 9 ,95th Cong , IstSess. 15\n& n.23 (1977).\n\n680\n\n\x0cSection 204(a) of the IEEPA, 50 U.S.C. \xc2\xa7 1703(a), provides that the President\n\xe2\x80\x9c in every possible instance, shall consult with the Congress before exercising\nany of the authorities granted by this chapter, and shall consult regularly with the\nCongress so long as such authorities are exercised.\xe2\x80\x9d Section 204(b), 50 U.S.C.\n\xc2\xa7 1703(b), requires that \xe2\x80\x9c [w]henever the President exercises any of the au\xc2\xad\nthorities granted by this chapter, he shall immediately transmit to the Congress a 1\nreport specifying\xe2\x80\x9d the circumstances necessitating the exercise of his authority;\nthe reasons that the circumstances constitute an unusual and extraordinary threat;\nthe authorities to be exercised and the actions to be taken; the reasons that such\nactions are necessary; a list of foreign countries with respect to which such\nactions are to be taken; and the reasons for such decisions.96\nThe scope of the authority available under the IEEPA to respond to an energy\nemergency, assuming the requisite findings have been made, depends on the\nbreadth the courts are willing to accord to the term \xe2\x80\x9c interest\xe2\x80\x9d as used in \xc2\xa7 203,\n50 U.S.C. \xc2\xa7 1702, in the context of a future petroleum shortage. The IEEPA does\nnot define the term \xe2\x80\x9c interest,\xe2\x80\x9d but the legislative history of the statute notes that\nthe authorities available to the President \xe2\x80\x9c should be sufficiently broad and\nflexible to enable the President to respond as appropriate and necessary to\nunforeseen contingencies.\xe2\x80\x9d H.R. Rep. No. 4 5 9 ,95th Cong., IstSess. 10(1977).\nIn addition, in cases decided under the TWEA (see supra at n.95) the courts have\ninterpreted the same language in \xc2\xa7 5(b)(1) of that statute, 50 U.S.C. app.\n\xc2\xa7 5(b)(1), broadly.97 The primary substantive limitation on the President\xe2\x80\x99s emer\xc2\xad\ngency authority is that \xc2\xa7 203 of the IEEPA may not be used to regulate wholly\ndomestic transactions. The House Report states that:\n\'\n\\\nthe scope of the authorities should be clearly limited to the\nregulation of international economic transactions. Therefore the\nbill does not include authorities more appropriately lodged in\nother legislation, such as authority to regulate purely domestic\ntransactions or to respond to purely domestic circumstances. . . .\nH.R. Rep. No. 459, supra at 10-11; see also S. Rep. No. 466, 95th Cong., 1st\nSess. 5 (1977).98\nIn light of this legislative history, we believe that the President would have\nbroad discretion under the IEEPA to determine whether a foreign nation or\nnational has an \xe2\x80\x9c interest\xe2\x80\x9d in property subject to U.S. jurisdiction, and, if so,\nwhether any of the authority granted in \xc2\xa7 203 should be exercised over that\n96 There is no provision in the IEEPA fo ra legislative veto o f the President\xe2\x80\x99s actions. However, the declaration erf\nan emergency under the IEEPA would be subject to the NEA (see supra n 78), which provides, inter a lia , that\nCongress has the authority to terminate by concurrent resolution any national emergencies declared after September\n14,1976. S e e 5 0 U.S C \xc2\xa7 1622(c) For the reasons set forth in n 35 supra, we believe this legislative veto provision\nof the NEA is unconstitutional.\n97 See. e g., H ea to n v U nited States, 353 F.2d 288, 291-92 (9th Cir. 1965), cert, denied. 384 U S. 990 (1966);\nU nited Stales v B roverm an. 180 F. Supp. 631, 636 (S D N .Y 1959).\n98 The House Report specifically notes that the IEEPA would not grant the President the same authority to regulate\npurely domestic transactions as would be available in time of war under the TW EA, for example, regulation of the\nhoarding of gold by U .S. citizens o r the extension of consumer credit by U S businesses. S ee H .R Rep No. 459,\n95th Cong , 1st Sess. 15 & n.23 (1977).\n\n681\n\n\x0cproperty, provided the President does not attempt to regulate transactions that are\npurely domestic in nature.\nFor example, the term \xe2\x80\x9c interest\xe2\x80\x9d would include, but not be limited to, contract\nrights of foreign countries or their nationals to acquire or control the disposition\nof property, such as contingent rights or royalty interests in petroleum products\nowned or controlled by a company subject to U .S . jurisdiction. In the event of an\nemergency meeting the requirements of \xc2\xa7 202, 50 U.S.C. \xc2\xa7 1701, the President\nwould therefore have authority to regulate the use, transportation, and disposi\xc2\xad\ntion of those petroleum products. The authority contained in \xc2\xa7 203 of the IEEPA\ncould also be used to regulate imports of petroleum products acquired from\nforeign nations or nationals. For example, in time of a national emergency, the\nIEEPA would give the President authority to require American companies and\nforeign entities they control" to ship petroleum products they acquire abroad to\nother nations.\nOn the other hand, the authority would probably not extend to property within\nthe United States that is wholly owned by a U.S. company or individual, because\nthe effect of regulation of such property would most probably be considered to be\n\xe2\x80\x9c wholly domestic.\xe2\x80\x9d For example, the authority granted the President in times of a\nnational emergency under the IEEPA probably would not extend to authorization\nof domestic pricing or allocation regulation.\nE. Emergency Energy Conservation Act of 1979\n\nTitle II of the Emergency Energy Conservation Act of 1979 (EECA), 42\nU .S.C . \xc2\xa7\xc2\xa7 8501-8541 (1982), provides the President with discretionary au\xc2\xad\nthority to impose energy demand restraint measures in certain emergency cir\xc2\xad\ncumstances as defined in that Act or to meet IEP obligations. Section 211(a) of\nthe EECA, 42 U .S.C . \xc2\xa7 8511(a), authorizes the President to establish energy\nconservation targets for any energy source on a nationwide and state-by-state\nbasis if the President determines that a \xe2\x80\x9c severe energy supply interruption\xe2\x80\x9d\nexists or is im minent,100 or that such action is required in order to fulfill\nobligations of the United States under the IEP.101 If such targets are set, the states\nare required to develop and submit to the Department of Energy plans to provide\n99 A merican corporations are clearly subject to the jurisdiction of the United States. See Restatem ent (S ec o n d ) c f\nForeign R e la tio n s L a w c f the U nited States, \xc2\xa7\xc2\xa7 27, 30 (1965). Foreign entities they control may also be, although\nthey may be subject to the competing jurisdiction o f the foreign country In addition, \xc2\xa7 203(a)(1)(B) permits the\nPresident to \xe2\x80\x9c regulate [or] direct and com pel. . [the] exercising [of] any right, power, or privilege with respect to\n. . .any [foreign] property . . \xe2\x80\x9d 50 U S C . \xc2\xa7 1702(a)(1)(B) This authorizes the President to require a U.S.\ncompany to exercise its control over foreign entities in the way the President directs, at least when the direction\nfurthers the purposes of other regulations imposed under the IEEPA.\n100 The definition o f the term \xe2\x80\x9c severe energy supply interruption\xe2\x80\x9d for the purposes of the EECA differs from the\ndefinition for purposes of the EPCA (see s u p ra 651). Section 202(1) of the EECA provides that a \xe2\x80\x9c severe energy\nsupply interruption\xe2\x80\x9d includes a national supply shortage of motor fuel or c f a n y other energy source caused by an\n\xe2\x80\x9c interruption\xe2\x80\x9d in energy, including, but not limited to, imported petroleum products, or by sabotage or an act of\nGod. S e e 42 U .S .C . \xc2\xa7 8502(1) (emphasis added). Section 3(8) of the EPCA limits the term to energy shortages\nresulting from an interruption in the supply o f imported petroleum products, or from sabotage or an act of God. 42\nU .S.C . \xc2\xa7 6202(8)\n101 Section 202(2) of the EECA, 42 U .S .C . \xc2\xa7 8502(2), incorporates by reference the definition of the term\n\xe2\x80\x9c international energy program " established by \xc2\xa7 3(7) of the EPCA, 42 U S.C . \xc2\xa7 6202(7).\n\n682\n\n\x0c\xe2\x80\x9c for emergency reduction in the public and private use of each energy source\xe2\x80\x9d\nfor which any emergency conservation target is in effect. Id. \xc2\xa7 8512(a), (b). The\nPresident may find inadequate compliance with a target in a state and substitute a\nfederal plan in that state. Id. \xc2\xa7 8513(b).\'02\nIf national targets are established for energy sources under the discretionary\nauthority of \xc2\xa7 211(a), the President is required to make effective an emergency\nenergy conservation plan for uses by the federal government. 42 U .S.C .\n\xc2\xa7 8511(c).103\nF. Export Administration A ct of 1979\n\nUnder the Export Administration Act of 1979 (EAA), 50 U .S.C . app.\n\xc2\xa7\xc2\xa7 2401-2420 (1982), the President may impose controls on exports, including\npetroleum products and materials and technology necessary to produce pe\xc2\xad\ntroleum products, in order, inter alia, to further the foreign policy interests of the\nUnited States, to protect the economy from a drain of scarce resources, or to\nobtain leverage against countries that aid terrorists. Section 7(a), 50 U.S.C. app.\n\xc2\xa7 2406(a), authorizes the President to prohibit or curtail the export of any goods\nsubject to the jurisdiction of the United States or exported by any person subject\nto the jurisdiction of the United States, in order to carry out the policies of the\nAct. Those policies are broad enough to allow the President to restrict the export\nof petroleum products in response to a substantial shortage. In relevant part, the\nStatement of Policy contained in the Act provides:\n(2) It is the policy of the United States to use export controls\nonly after full consideration of the impact on the economy of the\nUnited States and only to the extent necessary\xe2\x80\x94\n(B) to restrict the export of goods and technology where\nnecessary to further significantly the foreign policy of the\nUnited States or to fulfill its declared international obliga\xc2\xad\ntions; and\n(C) to restrict the export of goods where necessary to\nprotect the domestic economy from the excessive drain of\n102 The Secretary of Energy must approve a state plan unless he finds\xe2\x80\x94\n(A) that, taken as a whole, the plan is not likely to achieve the emergency conservation target\nestablished for that State\nfor each energy source involved,\n(B) that, taken as a whole, the plan is likely to impose an unreasonably disproportionate share of\nthe burden o f restrictions o f energy use on any specific class o f industry, business, or commercial\nenterprise, or any individual segment thereof,\n(C) that the requirements of this subchapter regarding the plan have not been met, or\n(D) that a measure .\nis\xe2\x80\x94\n(i) inconsistent with any otherwise applicable Federal law (including any rule or regulation\nunder such law),\n(ii) an undue burden on interstate commerce, or\n(in) a tax, tariff, or user fee not authonzed by State law.\n42 (J S.C. \xc2\xa7 8512(c)(1).\n103 The Department of Energy has established procedures for the development, submission, and approval of state\nplans and the standby federal plan 10 C F R Pt 477\n\n683\n\n\x0cscarce materials and to reduce the serious inflationary impact\nof foreign demand.\n*\n\n*\n\n*\n\n*\n\n*\n\n(8) It is the policy of the United States to use export controls to\nencourage other countries to take immediate steps to prevent the\nuse of their territories or resources to aid, encourage, or give\nsanctuary to those persons involved in directing, supporting, or\nparticipating in acts of international terrorism. To achieve this\nobjective, the President shall make every reasonable effort to\nsecure the removal or reduction of such assistance to international\nterrorists through international cooperation and agreement before\nresorting to the imposition of export controls.\nId. \xc2\xa7 2402(2)(B) & (C), (8). The statute does not, however, contain any authority\n\nfor the President to impose allocation or price controls with respect to domes\xc2\xad\ntically produced or refined crude oil and petroleum.\nSection 7 of the EAA also places certain limitations on the export of domes\xc2\xad\ntically produced crude oil transported by pipeline over rights-of-way granted by\nthe Trans-Alaska Pipeline Authorization Act, 43 U.S.C. \xc2\xa7 1652, and on the\nexport of refined petroleum products. See 50 U.S.C. app. \xc2\xa7 2406(d), (e). In\naddition, petroleum products produced from the NPRs (see supra at n.33), oil\nand gas produced from the Outer Continental Shelf, and crude oil transported by\npipeline over rights-of-way granted under \xc2\xa7 28(u) of the Mineral Lands Leasing\nAct (MLLA), 30 U.S.C. \xc2\xa7 185(u), are made subject, by separate statutes, to the\nrequirements and provisions o f the EA A .104 Section 7(d)(3) of the EAA, 50\nU .S.C . app. \xc2\xa7 2406(d)(3), specifies that the export restrictions imposed by the\nAct or by other provisions of law do not apply to exports of oil pursuant to any\nbilateral international oil supply agreement entered into by the United States\nbefore June 25, 1979, or to any country pursuant to the lEP\xe2\x80\x99s oil sharing system.\nUnder \xc2\xa7 103(c) of the EPCA, 42 U.S.C. \xc2\xa7 6212(c), the Export Administration\nAct may be used to implement restrictions on the export of energy sources,\nmaterials or equipment imposed under that section. See discussion supra at 652.\nG. Other Statutory Authorities\n\n1. Fuel Switching Authorities\nIn the event of a petroleum emergency, the President may be able to use\nauthority under several statutes to require fuel switching in order to mitigate the\n104 Petroleum products from the NPRs, oil and gas from the Outer Continental Shelf (OCS), and crude oil\ntransported over MLLA nghts-of-way, are subject to all of the limitations and licensing requirements o f the EAA,\nexcept for products that are either exchanged in similar quantities for convenience or increased efficiency of\ntransportation with persons o r the government of an adjacent foreign state, or that are temporarily exported for\nconvenience or increased efficiency of transportation across parts of an adjacent foreign state. 10 U.S C. \xc2\xa7 7430(3);\n43 U .S .C \xc2\xa7 1354(a); 30 U .S C \xc2\xa7 185(u). T h e Outer Continental Shelf Lands Act also specifically provides that\nOCS oil or gas \xe2\x80\x9c exchanged o r exported pursuant to an existing international agreement\xe2\x80\x9d is exempt from the export\nrestrictions of the EAA 4 3 U .S .C .\xc2\xa7 1354(d). Before any cnide oil from the NPRs or any product refined therefrom\nor crude oil subject to MLLA restrictions may be exported, the President must find, in addition to the requirements\nimposed by the E A A , that such exports will not diminish the total quality o r quantity of petroleum available to the\nUnited States and that such exports are in the national interest and are in accord with the EAA 10 U.S C. \xc2\xa7 7430(e),\n30 U S C \xc2\xa7 185(u)\n\n684\n\n\x0ceffects of the shortage and reduce dislocations in energy supplies. Fuel switching\nencompasses two types of emergency authority: (1) authority to prohibit the\nburning of petroleum or other fuels; and (2) authority to assure access to supplies\nof alternate fuels by allocation or mandatory interconnections, and possibly to\naugment available supplies through increased production or curtailed exports.\nThe President is given the authority to prohibit the burning of particular fuels\nby power plants and major fuel-burning installations by two statutes. Section 607\nof the Public Utility Regulatory Policies Act of 1978 (PURPA), 15 U.S.C. \xc2\xa7 717z\n(1982), authorizes the President to prohibit the burning of natural gas by any\nelectric power plant or major fuel-burning installation. Exercise of this authority\ndepends on a finding by the President of the existence or imminence of a severe\nnatural gas emergency that will endanger the supply of natural gas for highpriority uses. Section 404(b) of the Powerplant and Industrial Fuel Use Act\n(FUA), 42 U.S.C. \xc2\xa7\xc2\xa7 8301-8484 (1982), empowers the President to prohibit the\nuse of petroleum or natural gas as a primary energy source by any electric power\nplant or major fuel-burning installation. Exercise of this authority requires a\nfinding of a severe energy supply interruption, as that term is defined in the EPCA\n(see supra at 6). See 42 U.S.C. \xc2\xa7 8374(b).\nIn addition to prohibiting the use of a particular fuel during an emergency, the\nPresident would have the authority under various statutes to assist the recipients\nof prohibition orders in obtaining alternate fuel supplies. During severe energy\nsupply interruptions as defined in the EPCA, the President could allocate and\nrequire the transportation of coal for the use of any electric power plant or major\nfuel-burning installation, pursuant to \xc2\xa7 404(a) of the FUA, 42 U.S.C. \xc2\xa7 8374(a).\nSection 202(c) of the Federal Power Act (FPA), 16U.S.C. \xc2\xa7\xc2\xa7 791a-828c (1982),\nwould allow the Department of Energy to order the temporary interconnection of\nfacilities, and such generation, delivery, interchange, transmission, or power\nwheeling of electric energy as in its judgment would best meet the emergency.\nSee 16 U.S.C. \xc2\xa7 824a(c). In addition, under \xc2\xa7 210 of the FPA, 16 U.S.C. \xc2\xa7 824i,\nthe Federal Energy Regulatory Commission (FERC) would have the authority to\norder the physical connection of a cogeneration facility, small power production\nfacility, or transmission facilities of any electric utility with the facilities of any\nother electric utility, federal power marketing agency, geothermal power pro\xc2\xad\nducer, qualifying small power producer, or cogenerator. Section 211 of the FPA,\n16 U.S.C. \xc2\xa7 824j, would authorize the FERC to order electric utilities to provide\nwheeling transmission services, including any necessary enlargement of trans\xc2\xad\nmission capacity, for any other electric utility, geothermal power producer, or\nfederal power marketing agency.\nCertain deliveries of natural gas could also be facilitated under the Natural Gas\nAct (NGA), 15 U.S.C. \xc2\xa7\xc2\xa7 717-717z (1982). Section 7 of the NGA, 15 U.S.C.\n\xc2\xa7 717f, authorizes the FERC to order a natural gas company to extend or establish\ntransportation facilities to sell natural gas to local distributors. Pursuant to \xc2\xa7 303\nof the Natural Gas Policy Act (NGPA), 15 U.S.C. \xc2\xa7 3363 (1982), the President\nmay allocate supplies of natural gas during an emergency as defined by \xc2\xa7 301 of\nthe NGPA in order to assist in meeting natural gas requirements for high-priority\nusers of natural gas; the definition of an emergency is the same as set forth under\n\n685\n\n\x0cthe PURPA, and excludes energy supply emergencies not involving a significant\nnatural gas shortage. See 15 U .S.C . \xc2\xa7\xc2\xa7 3361, 3363. Section 302 of the NGPA,\n15 U.S.C. \xc2\xa7 3362, provides that the President\xe2\x80\x99s authority to direct interstate\npipelines or local distribution companies served by interstate pipelines to con\xc2\xad\ntract for the purchase of emergency supplies of gas is limited to an emergency as\ndefined by \xc2\xa7 301. Thus, the President\xe2\x80\x99s authority under the NGPA to require\nallocation of natural gas supplies directly to affected users is limited to natural gas\nemergencies. In the event of a petroleum shortage, that authority therefore would\nprobably not be available, for example, to allocate supplies to users with a dual\nnatural gas and petroleum capability, unless there were also a significant natural\ngas shortage.105\nFinally, in addition to incremental production of crude oil or natural gas\npursuant to \xc2\xa7 106 of the EPCA, 42 U.S.C. \xc2\xa7 6214 (see supra at 653-54), or\nexport controls on supplies of energy imposed under \xc2\xa7 7 of the EAA, 50 U.S.C.\n\xc2\xa7 2 4 0 6 ,o r\xc2\xa7 103 of the EPCA, 42 U.S.C. \xc2\xa7 6212 (see supra at 683-84,652-53),\ndomestic energy supplies might also be increased by terminating any export\nauthorizations granted under \xc2\xa7 3 of the NGA, 15 U.S.C. \xc2\xa7 717b, or \xc2\xa7 202(e) of\nthe FPA, 16 U .S.C . \xc2\xa7 824a(e).\n2. Miscellaneous Statutes\nA number of other statutes provide the President with selective authority to\naffect the use or distribution of petroleum products or to take other measures to\nrespond to a petroleum emergency, authority that may be available to respond to a\npetroleum shortage if the specific triggering requirements of each statute are met.\nPursuant to \xc2\xa7 36 of the MLLA, 30 U.S.C. \xc2\xa7 192, the United States may demand\nthat any royalty accruing to it under an oil or gas lease be paid in oil or gas. The\nOuter Continental Shelf Lands Act, 43 U.S.C. \xc2\xa7\xc2\xa7 1331-1356 (1982), gives the\nUnited States the right of first refusal to purchase OCS oil at market prices during\n\xe2\x80\x9c time of war or when the President shall so prescribe.\xe2\x80\x9d 43 U .S.C . \xc2\xa7 1341(b).\nOther measures available to the President might include facilitating transporta\xc2\xad\ntion of petroleum products in times of emergency;106 modifying air pollution\ncontrol requirements in times of an emergency to allow efficient use of available\nenergy sources;107or providing technical assistance, funds and personnel to states\n105 The allocation authority in \xc2\xa7 101(a) o f the DPA, 50 U .S .C app \xc2\xa7 2071(a), could possibly be used in a\npetroleum emergency to allocate natural gas to defense agencies and contractors for defense needs However, that\nauthonty could not be used to allocate natural gas supplies in the civilian market, in the event of a petroleum\nemergency, unless natural gas were also in sh o rt supply and necessary for the needs of national defense, as required\nby \xc2\xa7 101(b), 50 U .S .C app. \xc2\xa7 2071(b) S e e su p ra at 665-66.\n106 Under the Interstate Commerce Act, a s am ended, 49 U S.C . \xc2\xa7\xc2\xa7 10101-11901 (1982), the Interstate Com\xc2\xad\nmerce C ommission could authorize the entry o f new motor earners or water carriers into temporary service if they\nwere needed to ensure movemenf of essential petroleum products, or could issue priority orders during an\nemergency situation for rail movement of commodities, including petroleum products. 49 U .S.C. \xc2\xa7\xc2\xa7 10928,\n11123. TheM agnuson Act, 5 0 U S.C \xc2\xa7\xc2\xa7 191-198 (1982), authorizes the Secretary of TVansportation to make rules\nand regulations governing the movement o f any vessel within the territorial waters of the United States if the\nPresident declares a national emergency to exist by reason of actual or threatened war, insurrection or invasion, or\ndisturbance or threatened disturbance in the international relations of the United States. 50 U.S C. \xc2\xa7 191.\n107 Section 110(0 of the Clean Air Act, 42 U S C . \xc2\xa7 7410(0, permits the temporary modification of a state\xe2\x80\x99s air\npollution control program upon a presidential finding of a severe national or regional energy emergency.\n\n686\n\n\x0cor to foreign countries in order to minimize the effects of a petroleum shortage.108\nII. Legal Bases for Specified Energy Preparedness Activities\nConsistent with \xc2\xa7 3 of the EEPA, this Part addresses how the statutory\nauthorities outlined in Part I support the enumerated energy emergency prepared\xc2\xad\nness activities of the United States. See supra n.2. Since no petroleum emergency\nis likely to be isolated in cause, effect, or remedy, any or all of the authorities\ndescribed above may, in the appropriate circumstances, provide some basis for\nthe President to respond in some fashion, directly or indirectly, to a particular\ncrisis. In most petroleum emergencies it is likely that several different statutory\nauthorities would be available to the President. The scope of this discussion is\ntherefore necessarily limited to identifying the primary statutory authorities that\nprovide a basis for the enumerated preparedness activities, failure to mention\nother less directly applicable authorities should not be interpreted to suggest that\nthe President could not use such authorities to respond to a particular state of\nfacts, if the requirements of those statutes were met.\nA. Authority to Implement the IEP\n\nThe IEP Agreement, adopted in response to the 1973-74 oil em bargo,\nprovides a cooperative system designed to reduce the vulnerability of Participat\xc2\xad\ning Countries to future supply disruptions and to dependence on imported oil.\nThe IEP was formally adopted by 16 countries in 1974.109 It was provisionally\nentered into as an executive agreement by the President. 27 U.S.T. 1685,\nT.I. A.S. No. 8278 (Nov. 18, 1974). The United States, on January 9, 1976, gave\nits notification that, having complied with constitutional procedures by obtaining\nthe necessary legislation, it consented to be bound by the Agreement.110\n1. Obligations Imposed by the IEP Agreement\nThe IEP Agreement imposes four principal substantive obligations on Par\xc2\xad\nticipating Countries as follows:\n108 Under the Disaster Relief Act of 1974, 42 U S.C. \xc2\xa7\xc2\xa7 5121-5202 (1982), upon finding that an emergency or\nmajor disaster exists, the Prestdent could direct any federal agency to utilize its available resources and personnel in\nsupport of state and local disaster assistance efforts 4 2 U .S .C . \xc2\xa7\xc2\xa7 5145,5146. The Foreign Assistance Act of 1961\nempowers the President lo allow federal agencies to furnish services and commodities on an advance-of-funds or\nreimbursement basis to friendly countries and international organizations, and to waive certain regulations\ngoverning the making, performance, amendment, or modification of contracts and the expenditure of funds by the\nfederal government, if he determines such action to be in furtherance of the purpose of the Act to \xe2\x80\x9c support" or\n"promote economic or political stability\xe2\x80\x9d through provision of foreign assistance. 22 U .S.C . \xc2\xa7\xc2\xa7 2346,2357, 2393.\n109 See D igest c f U S Practice in l n t \'l L a w 560 (1974). Those countries were Austria, Belgium, Canada,\nDenmark, Ireland, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, Turkey, the United\nKingdom, the United States, and West Germany Greece, Iceland, New Zealand, Norway, and Portugal have since\nconsented to be bound by the Agreement.\n110 S ee D igest c f U .S Practice in ln t\xe2\x80\x99l L a w 650 (1975). The enabling legislation was contained in Title II of the\nEPCA, 42 U S C. \xc2\xa7\xc2\xa7 6271-6275, enacted in 1975, Pub. L. No. 94-163, Title II, 89 Stat 871 (1975).\n\n687\n\n\x0ca. Emergency Reserves (Chapter I)\nEach Participating Country must maintain emergency reserves equal to 90\ndays of net oil imports. This commitment may be satisfied by existing oil stocks,\nincluding stocks in tankers and pipelines, fuel switching capacity, or standby oil\nproduction, to the extent decided by the Governing Board, based on certain\ndeterminations and studies required by the Annex to the IEP Agreement.\nb. Demand Restraint (Chapter II)\nEach Participating Country must develop or have ready a contingent program\nof demand restraint measures that will enable it to reduce oil consumption, in the\nevent of activation of the IEP\xe2\x80\x99s emergency system (see infra at 689).\nc. Oil Sharing (Chapter III)\nEach Participating Country is required to take necessary measures to carry out\nthe international allocation of oil among Participating Countries if required by\nactivation of the emergency system (see infra at 689). A complex formula\nprovides for calculation of \xe2\x80\x9c supply rights\xe2\x80\x9d and \xe2\x80\x9c allocation rights and obliga\xc2\xad\ntions\xe2\x80\x9d of Participating Countries. This calculation takes into account historic\nlevels of consumption and actual domestic production and net imports available\nduring an emergency, and assumes that each Participating Country will absorb\nsome of the shortfall through the use of demand restraint measures and emergen\xc2\xad\ncy reserves. See infra at ns. 112 & 113.\nd. Information Exchange (Chapter V)\nParticipating Countries are required to provide or make available to the IEA\ncertain information necessary for monitoring the international supply of pe\xc2\xad\ntroleum and ensuring the efficient operation of the emergency system. The\ninformation system established by the IEP Agreement consists of two sections:\n(1) a general section, requiring the communication of non-proprietary informa\xc2\xad\ntion on the international oil market and activities of oil companies; and (2) a\nspecial section requiring submission of proprietary information necessary to\nimplement emergency m easures."1 Each Participating Country is required to\ntake appropriate measures to ensure that oil companies operating within its\njurisdiction make such information available as is necessary to fulfill the informa\xc2\xad\ntion obligations of that member.\n1,1 A critical feature of the special information system is submission by oil companies of certain proprietary\ninformation in Questionnaire A and by m ember governments in Questionnaire B. If there is reason to believe that a\nsenous oil supply disruption may be developing that could reach the 7 percent trigger (see infra at 689), the\nSecretariat, following contact with the m em ber governments, may request submission of those questionnaires by\nparticipating oil companies and by member governments. Each member government makes its own decision as to\nw hether o r how to allow oil companies to respond. In the United States, this would be accomplished by issuance of\nan antitrust clearance by the Secretary of Energy, with the concurrence of the Attorney General, pursuant to the\nregulations and the Voluntary Agreement implementing \xc2\xa7 252\n\n688\n\n\x0c2. Activation of the IEP Emergency System\nThe core of the IEP is Chapter IV, which outlines the circumstances that trigger\nthe IEP emergency system. The emergency system may be triggered when one or\nmore Participating Countries sustains or is likely to sustain an oil supply shortfall\nof more than 7 percent, measured against final oil consumption during a specified\nbase period. The IEP provides for both a \xe2\x80\x9c selective\xe2\x80\x9d and a \xe2\x80\x9c general\xe2\x80\x9d trigger. A\nselective trigger may be declared if one or more Participating Countries suffers a\n7 percent or greater shortfall.112 In the event of a selective trigger, countries may\nmeet their allocation obligations by any measure of their choosing, including\ndemand restraint measures or the use of emergency reserves. A general trigger\nmay be declared only if the Participating Countries as a whole suffer at least a 7\npercent reduction in oil supplies. Declaration of a general trigger activates the\nsupply rights and allocation rights and obligations of Participating Countries as\ncalculated according to Chapter III, and does not allow the same flexibility to\nchoose emergency measures that is permitted under a selective trigger."3\nArticle 22 of Chapter IV of the IEP Agreement also provides that the Govern\xc2\xad\ning Board may decide, by unanimous vote, to \xe2\x80\x9c activate any appropriate emer\xc2\xad\ngency measure not provided for in this Agreement, if the situation so requires.\xe2\x80\x9d 114\n3. Statutory Authority to Implement the IEP Agreement\nTo the extent that statutory authority is required for or relevant to implementa\xc2\xad\ntion of the obligations of the United States under the IEP, that authority is\nprovided primarily by the EPCA and Title II of the EECA.115We address here the\nscope of that authority with respect to the various obligations created by the IEP\nAgreement.\n112 A selective tngger may be initiated by a request from an affected country or countries to the Secretanat of the\nIEA. If the Secretanat makes a positive finding that a 7 percent shortfall exists or is imminent, activation occurs and\nemergency measures are implemented within 15 days, unless within 6 days after the Secretanat\'s finding the\nGoverning Board, by a weighted majonty vote, decides not to activate the system or to require only partial\nactivation. If within 72 hours of the initial request the Secretariat does not make a positive finding, the country may\nrequest the Governing Board to consider the situation. The Governing Board must meet within 48 hours, and within\nan additional 48 hours must make its finding whether the requisite shortfall exists If it does so find, it must decide\nwhether to activate emergency measures If a selective trigger is declared, the country requesting that action must\nabsorb the first 7 percent o f the shortfall Once that country has absorbed that amount of the shortfall, it has an\nallocation nght equal to the amount o f the shortfall above 7 percent. The other Participating Countnes share the\nobligation to satisfy this allocation nght on the basis of their consumption dunng a specified base penod.\n113 The procedure for activation of the general trigger is the same as for a selective trigger. See su p ra n 112 In the\nevent of an overall 7 percent or greater shortfall, each ftirticipating Country has a supply right equal to its base period\nfinal consumption, after deducting required demand restraint and emergency reserve drawdown amounts. If a\ncountry\'s supply right exceeds the sum of its available domestic production and net imports during an emergency, it\nhas an allocation right that entitles it to additional net imports from the other Participating Countries equal to that\nexcess If a country\'s available domestic production and net imports dunng an emergency exceed its supply right, it\nhas an allocation obligation that requires it to supply other farticipating Countnes, directly or indirectly, with a\nquantity o f oil equal to that excess\n114 The scope of Article 22 is subject lo some debate See infra n 133.\n115 Other statutes may also provide authonty with respect to petroleum products and emergency preparedness\nactivities that could be used by the President in connection with IEP activities if the particular requirements of those\nstatutes are met. Those authorities are discussed below in connection with the authority for participation in\n\xe2\x80\x9c subcrisis\xe2\x80\x9d IEP activities. See infra at 692-97\n\n689\n\n\x0ca. Emergency Reserves\nUnder Chapter I of the IEP Agreement, a Participating Country\xe2\x80\x99s emergency\nreserve obligation may be met, inter alia, by private stocks of petroleum\nproducts. We have been informed by the Department of Energy that the level of\nprivate stocks maintained by U .S. companies has been and is expected to be\nsufficient to meet that obligation. We note that certain provisions of the EPCA\nand other statutes give the President discretionary authority that could be used to\nestablish or draw down petroleum product reserves; if the President were to\ndetermine that such actions would be appropriate under the IEP Agreement and\nmet the conditions otherwise specified in those statutes. For example, the\nPresident has discretionary authority to implement an IPR (see supra at 655), and\nto use reserves in the SPR in fulfillment of \xe2\x80\x9c obligations of the United States under\nthe international energy program\xe2\x80\x9d (see supra at 655-56). The IEP Agreement\nalso provides that a Participating Country\xe2\x80\x99s emergency reserve obligation may be\nmet by fuel switching authorities or standby oil production, to the extent decided\nby the Governing B oard.116 Other relevant statutory authorities may therefore\ninclude the fuel switching authority granted under various federal statutes,117 and\nthe authority under \xc2\xa7 106 of the EPCA, 42 U.S.C. \xc2\xa7 6214, and 10 U.S.C.\n\xc2\xa7 7422(b), to accelerate production of crude oil and natural gas on federal and\nstate lands or petroleum products from the N PR s."8\nWe wish to emphasize, however, that the President\xe2\x80\x99s authority under those\nstatutes is discretionary, and that any action taken would have to be in accordance\nwith the specific terms of those statutes.\' No statute requires the President to take\nparticular actions, or to use particular reserves, in order to implement the\nemergency reserve obligation of the United States under Chapter I of the IEP\nAgreement.\nb. Demand Restraint Measures\nStatutory authority for establishment of a contingent demand restraint program\nas required by Chapter II of the IEP Agreement is available under \xc2\xa7\xc2\xa7201 and 202\nof the EPCA, 42 U.S.C. \xc2\xa7\xc2\xa7 6261 & 6262, providing for establishment and\nimplementation of federal energy conservation contingency plans,119and Title II\nof the EECA, 42 U.S.C. \xc2\xa7\xc2\xa7 8501-8541 (1982), directing the development of\nstate energy conservation contingency plans.120These plans may be implemented\nupon a discretionary presidential finding that they are necessary \xe2\x80\x9c to fulfill\nobligations of the United States under the international energy program.\xe2\x80\x9d 121\nDemand restraint could also be accomplished or facilitated by restricting supplies\n116 We have been informed by the Department of Energy that the Governing Board has not yet taken action to\ndeterm ine the extent to which the emergency reserve commitment may be satisfied by oil stocks, fuel switching\ncapacity, and standby production\n1,7 S e e su p ra at 685-87\n118 S e e su p ra at 6 53-54 & n.33.\nS e e s u p ra at 656-57.\n120 S e e su p ra at 682-83.\n121 S e e su p ra at 682.\n\n690\n\n\x0cof petroleum products through the TEA,122 or by relying on market forces to\ndampen demand. In addition, the IEP Agreement allows a Participating Country\nto substitute reserves held in excess of its emergency reserve commitment for\ndemand restraint measures.\nc. Oil Sharing\nSection 252 of the EPCA, 42 U.S.C. \xc2\xa7 6272, allows domestic oil companies\nto participate in meeting the allocation obligations of the United States under the\nIEP by establishing a framework for cooperation and by providing an antitrust\ndefense for actions taken in accordance with those plans.123 If necessary, such\nvoluntary actions may be supplemented by mandatory regulation under \xc2\xa7 251,\nwhich provides the President with authority to take actions necessary to fulfill\nobligations of the United States under the allocation provisions of the IEP, as set\nforth in Chapters III and IV of the Agreement. As discussed above, the Presi\xc2\xad\ndent\xe2\x80\x99s authority under \xc2\xa7 251 encompasses the authority to require companies\nsubject to the jurisdiction of the United States to divert oil supplies to other\nParticipating Countries in satisfaction of the United States\xe2\x80\x99 allocation obligations,\nand to establish a domestic \xe2\x80\x9c fair sharing\xe2\x80\x9d program of allocation among oil\nsuppliers as necessary to ensure successful implementation of the IEP emergency\nsystem .124The authority provided in \xc2\xa7\xc2\xa7 251 and 252 with respect to fulfillment of\nallocation obligations of the United States is available only if the emergency\nsystem has been activated in accordance with the requirements of Chapter IV of\nthe Agreement.125\nd. Information Exchange\nSections 254 and 252 of the EPCA, 42 U.S.C. \xc2\xa7\xc2\xa7 6274 & 6272, establish\nprocedures by which the United States may meet its obligations to provide\ninformation to the IEA. Section 254 authorizes the Secretary of State to provide\nto the IEA information and data related to the energy industry that is required to\nbe submitted under the IEP.126 The provisions of \xc2\xa7 252 governing cooperation\namong and the antitrust defense for domestic oil companies (see supra at\n660-62), as implemented by the applicable regulations, Voluntary Agreement,\nand Plan of Action, govern the supplying by oil companies of information\nrequired under Chapter V of the IEP Agreement and the availability of the\nantitrust defense for such activities. As implemented, the antitrust defense\n122 As with the President\xe2\x80\x99s authonty with respect lo emergency reserves (see su p ra at 690), implementation of\nsuch plans is a discretionary decision.\n123 S ee supra at 660-62.\n124 S ee supra at 659-60.\n125 S ee infra at 693-94\n126 This information may include data supplied by oil companies to the Department of Energy for transmission to\nthe IEA, or data collected by the Department o f Energy pursuant to other statutory authonty, such as the Energy\nSupply and Environmental Coordination Acl, 15 U S.C \xc2\xa7 796, and the Federal Energy Administration A ct, 15\nU.S C. \xc2\xa7 772. Such information may be transmitted by the Department of Energy to the Department of State, for\ntransmission to the IEA upon certification by the Secretary of State that the information is required to be submitted\nunder the IEP S e e 42 U S C. \xc2\xa7 6274(a), (d).\n\n691\n\n\x0cgenerally covers participating U .S. company advice and consultations in IEA\nmeetings and system tests. If confidential, proprietary data is to be furnished or\nexchanged prior to activation of the IEP emergency system, \xc2\xa7 5(b)(2) of the\ncurrent Voluntary Agreement requires the prior approval of the Secretary of\nEnergy, after consultation with the Secretary of State, and the concurrence of the\nAttorney General, after consultation with the FTC.127 When the emergency\nsystem has been activated, \xc2\xa7 5(b)(3) of the Voluntary Agreement confers anti\xc2\xad\ntrust protection, without the need for further clearance, with respect to the\nprovision or exchange of \xe2\x80\x9csuch types of confidential or proprietary information\nas are reasonably required to implement\xe2\x80\x9d the Voluntary Agreement and ap\xc2\xad\nproved plans of action.128\n4. December 10, 1981, Decision of the Governing Board with Respect to\nSubcrisis Activities\nOn December 10, 1981, the Governing Board of the IEA adopted by unan\xc2\xad\nimous vote a \xe2\x80\x9c Decision on Preparation for Future Supply Disruptions\xe2\x80\x9d outlining\na basis for consultation among Participating Countries in the event of a so-called\n\xe2\x80\x9c subcrisis\xe2\x80\x9d situation\xe2\x80\x94 i.e., a disruption in oil supplies short of the 7 percent\ntrigger required to activate the emergency system. The preamble to the Decision\nreflects that it is based on the following considerations:\n\xe2\x80\x94 disruptions in oil supply which did not reach the 7 percent level\nrequired to trigger the emergency allocation system have re\xc2\xad\ncently caused and could again cause damage to Member coun\xc2\xad\ntry economies through sharp oil price increases;\n\xe2\x80\x94 IEA countries should be better prepared to contribute to pre\xc2\xad\nventing a disruption in oil supply from again resulting in\nsharply higher prices and severe economic damage;\n\xe2\x80\x94 allowing market forces to operate and strengthening them\nwhere possible will improve the balance between supply and\ndemand and the distribution of oil in short supply;\n\xe2\x80\x94 supplementary action by governments may be necessary in\nthose areas where market forces do not sufficiently counteract\nthe adverse impact o f supply disruptions;\n\xe2\x80\x94 when such action is determined to be necessary, it should be\nlight-handed and flexible in responding to the specific situation\n127 Section 5(b)(2) of the current Voluntary Agreement (see 41 Fed. Reg 14000(Apr 1,1976)) requires the prior\napproval o f the Secretary of Energy, with the concurrence of the Attorney General, for any transmittal or exchange of\nconfidential or proprietary information or data by oil companies to the IEA or to each other Company-specific ( i.e . .\ndisaggregated data) m ust be aggregated by the Department of Energy or the IEA prior to disclosure toothers, unless\nthe Secretary of Energy, after consultation with the Secretary of State and with the concurrence of the Attorney\nG eneral, \xe2\x80\x9c has determined that such exchange or disclosure is necessary to develop, prepare, or test emergency\nallocation m easures."\n128 The companies are required to notify the Department of Energy, the Attorney General, and the FTC of the\ntypes o f information and data provided The Secretary of Energy, after consultation with the Secretary o f State, the\nAttorney General, and the FTC, may prescribe terms and conditions for the continued exchange or provision of\ninformation or data in an emergency situation See 41 Fed Reg. 14000 (Apr. 1, 1976)\n\n692\n\n\x0cat hand and at the same tim e be taken prom ptly and\neffectively; . . . .\nThe December 10, 1981, Decision provides for monitoring by the IEA of oil\nmarkets in order to assess the nature and probable impact of future supply\ndisruptions;129 requires the Participating Countries to consult with each other and\nwith the Secretariat in the event of a \xe2\x80\x9c subcrisis\xe2\x80\x9d supply disruption in order to\nrefine the Secretariat\xe2\x80\x99s assessment of the supply, demand, and stock situation; and\nprovides that in the event of a \xe2\x80\x9c subcrisis\xe2\x80\x9d supply disruption the Governing Board\nwill meet to decide what action, if any, is necessary to meet the situation. The\nDecision lists several illustrative measures that could be considered by the Board\nin that event, such as discouragement of abnormal spot market purchases or other\nundesirable purchases, lowered consumption, short-term fuel switching, high\nlevels of indigenous production, changes in stocks and stock policies, and\ninformal efforts to minimize and contain the effects of supply imbalances. The\nDecision specifically recognizes that \xe2\x80\x9c detailed methods of implementation [of\nany such measures] will be decided by governments in accordance with national\nlaw and the IEP, and could vary from country to country while aimed at achieving\nthe overall result desired on an integrated basis.\xe2\x80\x9d It specifies further that con\xc2\xad\nsultation with oil companies concerning any measures that might later be agreed\nto would be undertaken by the governments having jurisdiction over those\ncompanies.\nThe United States voted in favor of the December 10, 1981, Decision and\nmade the following statement explaining its interpretation of the effect of the\nDecision:\nThe United States . . . welcomes this Decision. At the same time\nwe must state for the record our understanding of it. The United\nStates remains committed to reliance on free market forces as the\nmost effective response to supply disruptions. We are pleased to\nnote the inclusion of this thought in the preamble of the Decision\nas a guiding principle for IEA discussions of market disruptions.\nThe Decision establishes a basis for future IEA consultations in\nthe event of subtrigger supply disruptions. However, it does not\ncommit IEA countries in advance as to the specific actions which\nthey might take in such circumstances. Moreover, we note the fact\nthat any actions taken in response to future disruptions must be\nconsistent with national law and the Agreement on an Interna\xc2\xad\ntional Energy Program, and may vary from country to country.\nAs this statement recognizes, the December 10, 1981, Decision of the Govern\xc2\xad\ning Board does not impose any mandatory obligations on the United States or on\nany other Participating Country to take particular actions in a \xe2\x80\x9c subcrisis\xe2\x80\x9d\n129 Specifically, the Decision states that the Executive Director of the IEA may, after consultations with\nf^rticipating Countnes, activate submission of Questionnaires A and B \xe2\x80\x9c consistent with procedures established for\nthe emergency allocation system\xe2\x80\x9d in the event of a supply disruption.\n\n693\n\n\x0csituation. Rather, it provides only a requirement for future IEP consultations in\nthe event of a \xe2\x80\x9c subcrisis\xe2\x80\x9d supply disruption.130 The text of the Decision makes\nclear that it does not commit IEP countries in advance to particular actions they\nmight take in responding to such situations. Therefore, the Decision itself has no\nindependent legal significance, and presents no legal issue with respect to the\nPresident\xe2\x80\x99s authority to take steps to implement the Decision.\nThe December 10, 1981, Decision contemplates, however, that the Governing\nBoard may decide on specific actions in the future, in the event of a particular\n\xe2\x80\x9c subcrisis\xe2\x80\x9d supply disruption. It is difficult to speculate as to what authority the\nPresident (or participating oil companies) would have to implement any future\ndecision of the Governing Board in a \xe2\x80\x9c subcrisis\xe2\x80\x9d supply disruption, as that\nanalysis would necessarily depend on the details of the action taken by the\nGoverning Board. The December 10, 1981, Decision suggests that primary\nreliance would be placed on the operation of market forces to improve the supply/\ndemand imbalance and to equalize the distribution of oil in short supply, and on\ninformal, non-mandatory efforts by Participating Countries to strengthen those\nmarket forces. These efforts could include, for example, increased informal\nconsultation among Participating Countries and between Participating Countries\nand oil companies subject to their jurisdiction, and public appeals by member\ngovernments for voluntary measures such as demand restraint, use of alternate\nfuels, increased indigenous production, and use of private reserve stocks. Imple\xc2\xad\nmentation of informal measures such as these by the President would not require\nparticular emergency statutory authority.131\nQuestions about the scope of the President\xe2\x80\x99s statutory authority and the\nauthority of individuals and oil companies to cooperate voluntarily would arise if,\nin a \xe2\x80\x9c subcrisis\xe2\x80\x9d supply disruption, the Governing Board were to adopt mandato\xc2\xad\nry measures requiring specific types of \xe2\x80\x9c supplementary action\xe2\x80\x9d by Participating\nCountries. See Preamble to December 10, 1981, Decision.132 Presidential au\xc2\xad\nthority to implement a \xe2\x80\x9c subcrisis\xe2\x80\x9d decision of the Governing Board that imposes\nmandatory obligations may be available, depending on the circumstances, under\ncertain of the statutory authorities described in Part I above.\nHowever, a significant limitation on the President\xe2\x80\x99s authority to take action for\nthe purpose of implementing allocation of oil supplies required by a \xe2\x80\x9c subcrisis\xe2\x80\x9d\ndecision of the Governing Board, and on the ability of oil companies to cooperate\nvoluntarily in such allocation, is imposed by \xc2\xa7\xc2\xa7 251 and 252 of the EPCA, 42\n130 The Decision does contain provisions concerning the monitoring of oil markets by the Secretariat and\nactivation of the Questionnaire A and B systems These provisions, however, are specifically limited to the\nprocedures established by the IEP Agreement, and therefore do not expand the existing obligations of Participating\nC ountnes under that Agreement.\n131 As we discuss infra, however, no statutory antitrust defense would be available for private individuals and\ncompanies with respect to voluntary actions taken in response to such efforts.\n132 Any such actions, if they purport to impose new or additional obligations on fcrticipating Countries, would\nhave to be taken by unanimous vote of the Governing Board. S ee Art. 61.1(b) (decisions which impose new\nobligations on Participating Countries that are not already specified in the Agreement must be by unanimous vote).\n\n694\n\n\x0cU.S.C. \xc2\xa7\xc2\xa7 6271 & 6272.133 Under existing statutes, the President has no au\xc2\xad\nthority to direct allocation of petroleum products for the purpose of fulfilling\nallocation obligations imposed by the IEP, and oil companies have no antitrust\ndefense with respect to voluntary actions to meet those allocation obligations,\nexcept as provided in \xc2\xa7\xc2\xa7 251 and 252 of the EPCA. See 42 U .S .C .\n\xc2\xa7 6271(c)(2);\'34 id. \xc2\xa7 6272(a).135 As was made clear by the amendments to\n\xc2\xa7\xc2\xa7 251 and 252 added in 1982 by the EEPA,136 those sections do not apply to\n\xe2\x80\x9c subcrisis\xe2\x80\x9d activities, even if directed by the Governing Board pursuant to\nArticle 22.137 We believe Senator McClure\xe2\x80\x99s statements in debate on the amend\xc2\xad\natory provisions of the EEPA are dispositive on that point:\nThe argument has been made that article 22 confers authority on\nthe IEA Governing Board to trigger an allocation system during a\nsubcrisis situation, and that the section 252 antitrust defense\nwould then be applicable to U.S. oil company participation in the\nallocation program. This argument is incorrect, section 252\nwould not apply in that situation.\nBy amending sections 251 and 252 as I have proposed, we\nwould hopefully avoid misinterpretations of those provisions by\nfuture administrations here in the United States, by other IEA\ncountries, or by the IEA itself. We would thus insure that the\nauthority conferred by sections 251 and 252 will apply only to\ncrisis situations\xe2\x80\x94those involving at least a 7-percent shortfall\xe2\x80\x94\nin accordance with the intent of the Congress.\n128 Cong. Rec. S 6065 (daily ed. May 26, 1982) (remarks of Sen. McClure).\nThus, \xc2\xa7 251 would provide no authority for the President to direct any allocation\n133 This analysis assumes that ihe Governing Board could require some limited sharing of oil stocks or supplies in\na \xe2\x80\x9c subcrisis\xe2\x80\x9d situation We note, however, that a question exists whether the Governing Board could require any\nmandatory oil sharing in any supply disruption short of the 7 percent \xe2\x80\x9c tngger.\xe2\x80\x9d The emergency m easures provided\nfor in the IEP Agreement, including mandatory demand restraint measures under Chapter II and allocation of oil\nunder Chapter III, can be activated only \xe2\x80\x9c in accordance with [Chapter IV] \xe2\x80\x9d S ee Chap IV, Art 12 Article 22 of\nChapter IV prqvides that the Governing Board may unanimously, at any time, \xe2\x80\x9c activate any appropnate emergency\nmeasures not provided for in the Agreement, if the situation so requires.\xe2\x80\x9d It is debatable whether this general\nlanguage in Article 22 allows the Governing Board to circumvent the carefully circumscribed and negotiated\nprovisions of Chapters II, III, and IV, which link demand restraint obligations and allocation nghts and obligations\ndirectly to the existence of a 7 percent shortfall in oil supplies of one or more Participating Countries. It is arguable\nthat the reference in Article 22 to \xe2\x80\x9c appropriate emergency measures n ot provided f o r in the A g reem en t \xe2\x80\x9d (emphasis\nadded) means that Article 22 contemplates emergency measures o th er than mandatory demand restraint and\nallocation requirements, which are already provided for in the Agreement\n134 \xe2\x80\x9c No officer or agency o f the United States shall have any authority, other than authority under this section [i.e.,\n\xc2\xa7 251], to require that petroleum products be allocated to other countries for the purpose of implementation o f the\nobligations of the United States under the international energy program \xe2\x80\x9d\n135 \xe2\x80\x9c Effective 90 days after December 22, 1975, the requirements of this section [i.e., \xc2\xa7 252] shall be the sole\nprocedures applicable to\xe2\x80\x94\n(1) the development or carrying out of voluntary agreements and plans of action to implement the\nallocation and information provisions of the international energy program, and\n(2) the availability of immunity from the antitrust laws with respect to the development or carrying\nout of such voluntary agreements and plans of action.\xe2\x80\x9d\n136 See supra at 660\n137 The United States, as a member o f the Governing Board, would be able to veto any proposed decision that\nwould require such allocation.\n\n695\n\n\x0cof oil for the purpose of implementing a Governing Board decision in a \xe2\x80\x9c sub\xc2\xad\ncrisis,\xe2\x80\x9d 138 and \xc2\xa7 252 would provide no authority or antitrust defense for oil\ncompanies to participate in such an allocation.139\nTo the extent that any mandatory \xe2\x80\x9c subcrisis\xe2\x80\x9d measures adopted by the Govern\xc2\xad\ning Board would require the President to take particular implementing actions\nother than the allocation of oil, the President\xe2\x80\x99s authority would derive from\nexisting statutory authorities other than \xc2\xa7\xc2\xa7 251 and 252 of the EPCA. Such\nauthorities may include, for example, other provisions of the EPCA and Title II of\nthe EECA that may be used to fulfill the United States\xe2\x80\x99 \xe2\x80\x9cobligations under the\n[IE P]\xe2\x80\x9d \xe2\x80\x94 i.e. , \xc2\xa7\xc2\xa7 151-161, 2 0 1 -2 0 2 , and 254 of the EPCA, 42 U .S.C .\n\xc2\xa7\xc2\xa7 6 2 3 1 -6 2 4 1 , 6261-6262, 6274, and Title II of the EECA, 42 U .S.C .\n\xc2\xa7\xc2\xa7 8501-8541.140\nAdditional authority might be available under other statutory authorities de\xc2\xad\nscribed in Part I above, if domestic circumstances were to provide an adequate\nbasis for use of those authorities. For example, an international disruption in the\nsupply of petroleum products may result in an interruption in the supply of\nimported petroleum products in the United States of sufficient length and severity\nto trigger a \xe2\x80\x9c severe energy supply interruption.\xe2\x80\x9d This would make available to\nthe President, for example, the authority in \xc2\xa7 106 of the EPCA, 42 U.S.C.\n\xc2\xa7 6214, to require accelerated rates of production of crude oil on fields located on\ndesignated federal and state lands,141 and the authority in \xc2\xa7 404(b) of the FUA, 42\nU .S.C . \xc2\xa7 8374(b), to prohibit the use of natural gas or petroleum in power plants\nand other major fuel-burning installations.142\nLikewise, in the event of an international shortage in petroleum products that\ndid not reach the \xe2\x80\x9c trigger\xe2\x80\x9d level, the President could determine that the shortage\nwould affect the national defense preparedness of the United States and therefore\nuse the authorities in the DPA relating to priority performance of contracts,\nallocation of materials and facilities, and activation of the Executive Reserve, in\naccordance with the specific requirements of those provisions.143 In addition, a\npresidential declaration of an emergency under the IEEPA, if the circumstances\n138 Jn addition, the waiverprovisionw \xc2\xa7 7(d)(3) of the EAA, 5 0 U .S .C app \xc2\xa7 2406(d)(3), would not be available\nunless the IEP emergency system had been activated S ee su p ra at 683-84.\n139 Section 252 also limits the availability o f an antitrust defense with respect to the furnishing and exchange of\ninformation by oil companies pursuant to th e provisions of Chapters IV and V of the Agreement.\n140 Arguably, a unanimous decision by the Governing Board requinng specific actions by Participating Countries\nwould impose "obligations\xe2\x80\x9d on the United States \xe2\x80\x9c under the [IEP]\xe2\x80\x9d within the language of those provisions. Article\n66 of the IEP Agreement provides that the Participating Countnes \xe2\x80\x9c sh a ll take the necessary measures\nto\nimplement the A greement and decisions ta k e n by the G overning B o a rd \xe2\x80\x9d (emphasis added). In the absence of\npersuasive legislative history to the contrary o r specific limiting language, such as exists with respect to \xc2\xa7\xc2\xa7 251 and\n252, the authonty in \xc2\xa7\xc2\xa7 151-161, 201-202, an d 254 of the EPCA, and Title II of the EECA might be interpreted (o\nextend to all \xe2\x80\x9c obligations\xe2\x80\x9d o f the United States under the IEP, including mandatory measures required by a\nunanimous decision of the Governing Board. Whether decisions taken in this manner constitute IEP \xe2\x80\x9c obligations\xe2\x80\x9d\nwithin the meaning of those provisions, however, may be subject to some debate Because of the unanimity required\nby Article 61 1(b), no such \xe2\x80\x9c obligations\xe2\x80\x9d could be imposed on the United States without its consent Moreover, this\nconclusion could not apply to substantive amendments to the IEP Agreement after 1974, which are excluded from\nthe definition o f the IEP for purposes of the EPCA. See su p ra at n 28.\n141 S e e su p ra at 653\xe2\x80\x9454\n142 S e e su p ra at 685\n143 S e e su p ra at 662-680. The President could use the authority in \xc2\xa7 101(c) of the DPA, 50 U S C app. \xc2\xa7 2071(c),\nto allocate materials and supplies in order to maximize energy production, without making the finding of a national\ndefense nexus required by other sections o f the Act\n\n696\n\n\x0cof an international supply disruption met the threshold requirements established\nby that Act, would trigger presidential authority to control disposition of property\nin which a foreign country or national has an interest.144\nHowever, the President could not use statutory allocation authority, for exam\xc2\xad\nple, under the IEEPA, to require the international allocation of petroleum\nproducts among Participating Countries solely to implement a \xe2\x80\x9c subcrisis\xe2\x80\x9d deci\xc2\xad\nsion of the Governing Board that requires Participating Countries to participate in\nan oil sharing plan.145 In addition, no antitrust defense would be available under\n\xc2\xa7 708 of the DPA for any voluntary international allocation made by oil com \xc2\xad\npanies to support implementation of such a \xe2\x80\x9c subcrisis\xe2\x80\x9d decision. See 50 U .S.C.\napp. \xc2\xa7 2158(a)(o); 42 U.S.C. \xc2\xa7 6272(a), discussed supra at 70-72.\n5. National Emergency Sharing Organization\nThe term National Emergency Sharing Organization (NESO) refers to the\nagency or entity within each IEP Participating Country that is responsible for\ngeneral liaison with the IEA on matters of international oil allocation during an\nemergency and for national oil emergency matters. Authority for the President to\nestablish a NESO or to provide that the functions of a NESO be performed by an\nexisting agency or department within the government stems from 3 U.S.C. \xc2\xa7 301\nand congressional implementation of provisions of the IEP Agreement in the\nEPCA and the EECA. By executive order the President has designated the\nDepartment of Energy to function as the NESO for the United States. See Exec.\nOrder No. 11,912,3C.F.R. 114(1976), asam endedby Exec. Order No. 12,038,\n3 C.F.R. 136 (1978), and Exec. Order No. 12,148, 3 C.F.R. 427 (1979).\n6. Emergency Sharing System\nThe \xe2\x80\x9c emergency sharing system\xe2\x80\x9d is a term that has been used to refer to those\nobligations as set forth in the IEP Agreement that may be triggered in the event of\na 7 percent or greater shortfall in petroleum supplies of one or more Participating\nCountries. Authority for implementation by the United States of those obliga\xc2\xad\ntions is discussed supra at 690.\n144 See supra at 680-84.\n145 This conclusion assumes that the sole purpose for the President\'s decision to order such allocation would be to\nimplement a \xe2\x80\x9c subcrisis\xe2\x80\x9d decision by the Governing Board imposing mandatory oil sharing requirements, and that\nthe allocation would therefore be "fo r the purpose of implementation of the obligations of the United States under\nthe [IEP]," within the meaning of \xc2\xa7 251(c)(2), 42 U .S C \xc2\xa7 6271(c)(2), quoted supra at n. 134. By the express terms\nof that section, the only statutory authonty available to the President in those circumstances would be \xc2\xa7 251, which,\nas noted above, provides no allocation authority in \xe2\x80\x9c subcrisis\xe2\x80\x9d situations. See supra at 694. However, factors taken\ninto consideration by the IEPGoveming Board in responding to a "subcnsis\xe2\x80\x9d situation may, of course, also be taken\ninto account by the President in his determination whether or how to exercise statutory authorities other than \xc2\xa7 2 5 1 ,\nsuch as the IEEPA, together with additional considerations, including the impact of the oil shortage on the security,\nforeign policy, and economy of the United States. See, e.g., 50 U S.C . \xc2\xa7 1701 We therefore do not suggest that, if\nthe Governing Board were to impose oil shanng obligations on Participating Countries in a \xe2\x80\x9c subcrisis\xe2\x80\x9d situation, the\nPresident could not, independent of that decision, exercise authonty under the IEEPA to require the allocation of\npetroleum products, consistent with the specific terms of the IEEPA.\n\n697\n\n\x0c7. Supply Rights Project\nThe supply rights project is a study being undertaken by the Department of\nEnergy to determine what options, such as import quotas or tariffs, may be\nimplemented to reduce or eliminate the likelihood that the United States will\nincur an allocation obligation if the emergency system is triggered. The project is\nbeing conducted pursuant to functions delegated to the Department of Energy\nunder the Department of Energy Organization Act, 42 U.S.C. \xc2\xa7\xc2\xa7 7101-7375,\nand 3 U.S.C. \xc2\xa7 301. See Exec. Order No. 11,912, supra.\nB. Authority to Fulfill NATO Obligations\n\nPursuant to its obligations under the North Atlantic Treaty, 63 Stat. 2241, the\nUnited States may in some circumstances be obligated to participate in distribu\xc2\xad\ntion of available oil supplies among members of the North Atlantic Treaty\nOrganization (NATO) to satisfy the defense needs of NATO during a petroleum\nshortage. Two organizations within NATO have responsibility with respect to\npetroleum emergencies: (1) the Petroleum Planning Committee, which has the\ntask of developing plans for the distribution of available oil supplies among\nNATO members if there are supply shortages during times of crisis or war; and\n(2) the NATO Wartime Oil Organization, which is NATO\xe2\x80\x99s emergency pe\xc2\xad\ntroleum organization.\nThe primary statutory authorities that would allow the President to fulfill\nresponsibilities to NATO countries include the D PA ,146 the IEEPA,147 the\nTW EA ,148 and the Foreign Assistance Act of 1961.149 Some limitation on the\nPresident\xe2\x80\x99s flexibility is imposed by export restrictions imposed by the EAA and\nother statutes, which limit the availability of waivers of restrictions on the export\nof crude oil pursuant to the North Atlantic Treaty.150 No statutory antitrust or\nbreach-of-contract defense is available for voluntary participation by U.S. oil\ncompanies in NATO oil planning or sharing activities.151\nC. Authority with Respect to Developm ent and Use o f the SPR\nThe legal authorities with respect to establishment, filling, and drawdown of\nthe SPR are discussed supra at 654\xe2\x80\x94656.\n146 See supra at 662-78.\n147 See supra at 680-84.\n148 See supra at n 95.\n149 See supra at n 108\n150 The EAA provides for waiver of export controls on crude oil required by the Act or by other acts only for\nexports \xe2\x80\x9c pursuant to a bilateral international oil supply agreement entered into by the United States with such nation\nbefore June 25, 1979, or to any country pursuant to the International Emergency Oil Sharing Plan of the\nInternational Energy A gency,\xe2\x80\x9d which would not include exports to fulfill NATO responsibilities 50 U .S.C . app.\n\xc2\xa7 2406(d)(3). See supra at 685.\n131 See supra at 66 0 -6 2 , 672. Protection generally would be available, however, for actions by oil companies\nrequired by government orders under those A cts. See, e g ., 50 U .S .C . app. \xc2\xa7 2157 (no person shall be held liable for\nan act \xe2\x80\x9c resulting directly or indirectly from com pliance\xe2\x80\x9d with orders issued pursuant to the DPA), 50 U .S.C .\n\xc2\xa7 1702(a)(3) ( \xe2\x80\x9c [n]o person shall be held liable in any court for or w ith respect to anything done or omitted in good\nfaith in connection with the administration of, o r pursuant to and in reliance on, [the IEEPA], or any regulation,\ninstruction, o r direction issued under [the IEEPA]\xe2\x80\x9d ), 50 U.S C. app. \xc2\xa7 5(b)(2) (TWEA)\n\n698\n\n\x0cD . Authority fo r Government Incentives to Encourage Private Petroleum\nProduct Stocks\n\nNo statutory authority currently exists that would authorize specific govern\xc2\xad\nment incentives, such as federal subsidies, loan guarantees, tax credits, or the\nestablishment of quasi-govemmental corporations to purchase and hold stocks,\nto encourage build-up in private petroleum product stocks. Incentives for the\nbuild-up of such stocks may, of course, be provided as a matter of policy within\nstatutory constraints, for example, by removing market disincentives for in\xc2\xad\ncreases in private stocks. Voluntary agreements under the DPA could possibly be\nused, consistent with the requirements of that Act, to facilitate the building of\nprivate stocks if necessary to promote the national defense or national defense\npreparedness. Participants would receive a limited antitrust defense for their\nparticipation. See supra at 670-72.\nE. Authority fo r Reactivation c f the Executive Reserve\n\nThe legal authorities with respect to establishment and activation of the\nExecutive Reserve are discussed supra at 672-78.\nF. Authority fo r Coordination with State and Local Governments\n\nIn response to initiatives at the federal, state, and local levels, most of the states\nhave taken action to facilitate planning for or responding to energy emergencies.\nCooperation between state and local governments and federal agencies in plan\xc2\xad\nning for energy emergencies is specifically authorized by \xc2\xa7\xc2\xa7 201 and 202 of the\nEPCA, 42 U.S.C. \xc2\xa7\xc2\xa7 6261 & 6262, and by Title II of the EECA, 42 U.S.C.\n\xc2\xa7\xc2\xa7 8501-8541.\nState energy emergency response statutes, regulations, and plans differ con\xc2\xad\nsiderably in their scope and applicability. Powers available under state emergen\xc2\xad\ncy statutes range from broad grants of authority to state governors under general\nstate disaster acts152 to specific provisions enumerating actions that may be taken\nin response to an energy emergency, such as establishment of allocation, ration\xc2\xad\ning, distribution, and conservation plans,153 and setting up of state agencies to\nimplement those option plans. State energy emergency contingency plans de\xc2\xad\nveloped by several states provide for a range of actions in the event of an energy\nemergency, including public information and education programs; incentives to\nincrease local production of energy; allocation, rationing, and distribution pro\xc2\xad\ngrams; transportation conservation measures; electricity restraints; and restric\xc2\xad\ntions on retail operations or gasoline purchases. The definition of an energy\n152 See. e g . Alaska Stat. \xc2\xa7\xc2\xa7 26.23 010-26 23.230(1981); III. Ann. Stat Ch 127 \xc2\xa7\xc2\xa7 1101-1127 (1981); Va.\nCode \xc2\xa7\xc2\xa7 44-146.13-44\xe2\x80\x94146 28 (1981).\n153 See. e.g .. Cal. Public Resources Code \xc2\xa7\xc2\xa7 25700-25705 (West 1977); Kan. Stat. Ann \xc2\xa7\xc2\xa7 74-6801-09\n(1980); Md. Natural Resources Code Ann. \xc2\xa7 11-102 (Supp. 1981); Tenn. Code Ann. \xc2\xa7\xc2\xa7 5 8 -2 -1 0 1 -5 8 -2 -1 3 2\n(1980).\n\n699\n\n\x0cemergency sufficient to trigger implementation of such authorities also differs\nfrom state to state.154\nThe major legal issue we address here with respect to the establishment or\nimplementation of state energy emergency responses is whether or under what\ncircumstances a state law, regulation, or plan may be subject to challenge on the\nground that it is preempted by federal law or is an undue burden on interstate\ncommerce. This issue is particularly difficult to analyze in the abstract. There are\nno mechanical tests to determine if particular state legislation or regulation is\nimpermissible. Resolution of that issue depends on a case-by-case comparison of\nthe applicable federal and state provisions and programs, and an analysis of the\neffect of the competing state and federal regulation in a specific fact situation.\nGiven the diversity of both federal and state authorities related to energy emer\xc2\xad\ngency preparedness, it is impossible here to do more than outline the general\nprinciples that should govern that analysis.\n1. Preemption of State Laws and Regulations\nPursuant to the Supremacy Clause of the Constitution (Art. VI, cl. 2),155 state\nlaws or regulations may be invalid if they operate in the same field or regulate the\nsame subjects as federal laws o r regulations. The determination whether par\xc2\xad\nticular state laws or actions taken pursuant to those laws are preempted depends\non the purpose and nature of federal regulation in that field and the interaction of\nstate regulation with federal regulation. The underlying task is to determine\nwhether Congress intended, in a particular instance, to preempt state regulation\nof the same subject matter. See M alone v. White M otor Corp., 435 U.S. 497, 504\n(1978); Retail Clerks v. Schermerhorn, 375 U.S. 96, 103 (1963).\nOccasionally, Congress explicitly defines the extent to which a particular\nstatute preempts state law. See generally Jones v. Rath Packing Co., 430 U.S.\n519, 530-31 (1977). Section 6(b) of the EPAA, for example, provided that a\nregulation or order issued under the Act \xe2\x80\x9c shall preempt any provision of any\nprogram for the allocation of crude oil, residual fuel oil, or any refined petroleum\nproduct established by any state or local government if such provision is in\nconflict with such regulation or any such order.\xe2\x80\x9d 15 U.S.C. \xc2\xa7 755(b) (1976)\n(expired Sept. 30, 1981). Another example may be found in \xc2\xa7 526 of the EPCA,\nwhich provides that:\nNo State law or State program in effect on [the date of enact\xc2\xad\nment of this A ct], or which may become effective thereafter, shall\nbe superseded by any provision of subchapter I or II of this chapter\nor any rule, regulation, or order thereunder, except insofar as such\nState law or State program is in conflict with such provision, rule,\nregulation, or order.\n154 Compare Hawaii Rev. Stat Chap. 125C (1976) with Wash Rev. Code \xc2\xa7 43.21G (1972); Mont. Code Ann\n\xc2\xa7\xc2\xa7 9 0 -4 -3 0 1 -3 1 9 (1979), and Tenn. Code A nn. \xc2\xa7\xc2\xa7 5 8 -2 -1 0 1 -5 8 -2 -1 3 2 (1980).\n155 \xe2\x80\x9c The Constitution, and the laws of the U nited States . . .;andallTVeaties\nshall be the Supreme Law of the\nLand.\xe2\x80\x9d\n\n700\n\n\x0c42 U.S.C. \xc2\xa7 6396.156\nIn most cases, however, preemption must be inferred. The general rule is that\nstated in Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132 (1963):\nThe principle to be derived from our decisions is that federal\nregulation of a field of commerce should not be deemed pre\xc2\xad\nemptive of state regulatory power in the absence of persuasive\nreasons\xe2\x80\x94 either that the nature of the regulated subject matter\npermits no other conclusion, or that Congress has unmistakably\nso ordained.\n373 U.S. at 142 (citation omitted). This test was reaffirmed in two of the Court\xe2\x80\x99s\n1981 decisions. See Commonwealth Edison v. Montana, 453 U.S. 609, 634\n(1981); Chicago & North Western Transportation Co. v. Kalo Brick & Tile C o.,\n450 U.S. 311, 317 (1981). Preemption may be found if Congress has occupied an\nentire field of interstate commerce, leaving no room for state legislation;157 if the\nstate legislation \xe2\x80\x9c stands as an obstacle to the accomplishment and execution of\nthe full purposes and objectives of Congress;\xe2\x80\x9d 158 or if state legislation is incon\xc2\xad\nsistent with specific provisions of a federal statute or regulation*159\nThe clearest examples of state energy emergency laws or regulations that may\nbe subject to challenge under the preemption doctrine would be laws or regula\xc2\xad\ntions that actually conflict with federal statutes or directives. For example, a state\nallocation regulation that requires an oil supplier to take actions inconsistent with\neffective federal allocation regulations implemented under the EPCA or the DPA\nwould fall under the Supremacy Clause. A determination whether particular\nprovisions of state emergency energy laws, regulations, or plans conflict with\nfederal requirements can be made only by comparing these competing require\xc2\xad\nments. That comparison cannot be made in the abstract. The \xe2\x80\x9c relationship\nbetween state and federal laws\xe2\x80\x9d must be considered \xe2\x80\x9c as they are interpreted and\napplied, not merely as they are written.\xe2\x80\x9d Jones v. Rath Packing C o., supra, 430\nU.S. at 526 (citations omitted). Since the scope and effect of both federal and\nstate regulation in the event of an emergency will depend largely on the circum\xc2\xad\nstances of that emergency and the choices made by the appropriate state and\nfederal officials in response to that emergency, a determination whether par\xc2\xad\nticular state laws or regulations conflict with federal directives in all likelihood\ncannot be made unless and until an emergency exists and those authorities are\nexercised.\nThe basis for a preemption challenge to state laws or regulations would, be\nmore tenuous if the state enactment did not conflict directly with a particular\n156 Even under statutes such as the EPAA and the EPCA, in which Congress makes its intent express with respect\nto the scope of preemption, a further determination must be made on a case-by-case basis as to whether particular\nstate regulation is \xe2\x80\x9c in conflict w ith\xe2\x80\x9d federal provisions. See. e.g ., M obil Oil Corp v. Dubno, 492 F. Supp. 1004 (D\nConn. 1980), Atlantic Richfield Co. v. Tribbitt, 399 A .2d 535, 545\xe2\x80\x9446 (Del Ch 1977), New York State Office o f\nParks <4 Recreation v. Vantage Petroleum Corp., 431 N Y .S.2d779(N Y Sup. Ct. 1980), New England Petroleum\nCorp. v. County c f Suffolk, 383 N Y.S.2d 405 (N.Y. App Div. 1976).\n157 See, e.g., Campbell v. Hussey. 368 U.S 297 (1961)\n158 See Hines v. Davidowitz, 312 U S 52, 6 7-68 (1941)\n139See, e g . Jones v Rath Packing Co., 430 U.S. 519 (1977); Warren Trading Post Co, v Arizona Tax\nCommission, 380 U.S 685 (1965).\n\n701\n\n\x0cfederal directive, but rather conflicted only with a general federal policy. Re\xc2\xad\ncently, in Commonwealth Edison Co. v. Montana, supra, the Supreme Court\nconceded the power companies\xe2\x80\x99 point that the EPCA and the FUA were intended\nto encourage the use of coal. It nevertheless rejected their argument that this\npurpose preempted a severance tax imposed by Montana on coal mined on\nfederal land, saying:\n[w]e do not . . . accept appellants\xe2\x80\x99 implicit suggestion that these\ngeneral statements demonstrate a congressional intent to preempt\nall state legislation that may have an adverse impact on the use of\ncoal. . . . In cases such as this, it is necessary to look beyond\ngeneral expressions of \xe2\x80\x98national policy\xe2\x80\x99 to specific federal statutes\nwith which the state law is claimed to conflict.\n453 U.S. at 633-34 (citations om itted).160 Particularly if the state statute is \xe2\x80\x9c an\nexercise of \xe2\x80\x98historic police power of the States,\xe2\x80\x9d \xe2\x80\x99 which would include most state\nenergy emergency laws and regulations, the Supreme Court has refused to find\npreemption \xe2\x80\x9c unless that was the \xe2\x80\x98clear and manifest purpose of Congress.\xe2\x80\x99\xe2\x80\x9d\nFlorida Lime & Avocado Growers, Inc., supra, 373 U.S. at 146, quoting Rice v.\nSanta Fe Elevator Corp., 331 U .S. 218, 230 (1947). The congressional mandate\nmust be \xe2\x80\x9c unam biguous,\xe2\x80\x9d Florida Lime & Avocado Growers, supra, 373 U.S. at\n147, and \xe2\x80\x9c compelling.\xe2\x80\x9d New York Telephone C o. v. New York State Department\nc f Labor, 440 U.S. 519, 540 (1979).\nIn the absence of a relatively direct conflict between state and federal direc\xc2\xad\ntives, we believe the statutory authorities available to the President to deal with an\nenergy emergency probably would not be interpreted to contain an \xe2\x80\x9c unam\xc2\xad\nbiguous\xe2\x80\x9d and \xe2\x80\x9c compelling\xe2\x80\x9d mandate to preempt state energy emergency provi\xc2\xad\nsions. State laws or regulations are most likely to be vulnerable to a preemption\nchallenge under either the EPCA or the DPA.161 As noted above, the EPCA\nspecifically saves from preemption all state laws and regulations except those that\nare in conflict with federal directives. Although the DPA does not contain a\ncomparable savings provision, the breadth of the authorities available to the\nPresident under the DPA belies any argument that Congress intended to \xe2\x80\x9coccupy\nthe field.\xe2\x80\x9d The standby authorities provided in the DPA could be invoked in\npractically any area of the economy, and therefore it is highly unlikely that\nCongress intended that the states could not act at all in this broad area merely\nbecause the President was given broad but discretionary powers under the DPA.\nThat conclusion, however, will depend ultimately on the facts of a particular\nsituation.\n160 However, a particular statutory scheme and legislative history could demonstrate that Congress intended to\nestablish uniform national standards or regulations that would foreclose different or more stringent state require\xc2\xad\nments In that event, state regulation would fall, even if no direct conflict existed between state and federal\nrequirements See, e .g ., Ray v. Atlantic Richfield Co., 435 U .S. 151, 163-64 (1978)\n161 M ost of the other statutory authorities, as described in F^rt 1, deal with subjects that are generally outside the\nscope of a state\'s authority to regulate, such as exports and imports See, e g , \xc2\xa7 232 of the TEA, 19 U .S.C. \xc2\xa7 1862\n(supra at 678-80); \xc2\xa7 203 of the IEEPA, 50 U S.C . \xc2\xa7 1702 (supra at 680-82); \xc2\xa7 7(a) of the EAA, 50 U S C. app.\n\xc2\xa7 2406(a) (supra at 683-84). It is possible, o f course, that a particular situation may present a preemption question\nunder statutory authorities other than the EPCA or the DPA.\n\n702\n\n\x0c2. Burden on Interstate Commerce\nA separate question is whether or under what circumstances state laws,\nregulations, or plans may be subject to challenge under the \xe2\x80\x9c negative implica\xc2\xad\ntion\xe2\x80\x9d of the Commerce Clause of the Constitution (Art. I, \xc2\xa7 8, cl. 2).162 Even in\nthe absence of federal regulation, a state law or regulation may be unconstitu\xc2\xad\ntional because it creates an undue burden on interstate commerce. See, e.g .,\nHughes v. Oklahoma, 441 U.S. 322 (1979). However, not all state actions that\nregulate aspects of interstate commerce are unconstitutional. Determining the\nvalidity of particular state statutes or regulations that may affect interstate\ncommerce requires a careful inquiry:\nWhere the statute regulates evenhandedly to effectuate a legiti\xc2\xad\nmate local public interest, and its effects on interstate commerce\nare only incidental, it will be upheld unless the burden imposed\non such commerce is clearly excessive in relation to the putative\nlocal benefits. If a legitimate local purpose is found, then the\nquestion becomes one of degree. And the extent of the burden that\nwill be tolerated will of course depend on the nature of the local\ninterest involved, and on whether it could be promoted as well\nwith a lesser impact on interstate activities.\nPike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970) (citation omitted).\n\nAlthough this inquiry necessarily depends on the particular facts presented, as\na general matter state laws or regulations that would allow a state to enhance its\npetroleum supply to the detriment of other states, for example, by an allocation\nscheme or export restriction, would have to be carefully scrutinized. The Su\xc2\xad\npreme Court has repeatedly struck down, as violative of the Commerce Clause,\nstate statutes that \xe2\x80\x9c mandat[e] that its residents be given a preferred right of\naccess, over out-of-state consumers, to natural resources located within its\nborders or to the products derived therefrom.\xe2\x80\x9d New England Power Co. v. New\nHampshire, 455 U.S. 331 (1982), citing Hughes v. Oklahoma, supra, 441 U.S.\n322 (1979); Pennsylvania v. West Virginia, 262 U.S. 553 (1923); West v. Kansas\nNatural G as Co., 221 U.S. 229 (1911); Philadelphia v. New Jersey, 437 U.S.\n617, 627 (1978). Most recently, in Sporhase v. Nebraska, 458 U.S. 941 (1982),\nthe Court held unconstitutional a Nebraska statute conditioning export of ground\xc2\xad\nwater from the state on reciprocal treatment from the receiving state.\nIn Sporhase, however, the Court also suggested that not every restriction\nimposed by a state on the export of its natural resources is necessarily unconstitu\xc2\xad\ntional. The Court noted that:\n[A] State\xe2\x80\x99s power to regulate the use of water in times and places of\nshortage for the purpose of protecting the health of its citizens\xe2\x80\x94\nand not simply the health of its economy\xe2\x80\x94 is at the core of its\n162 \xe2\x80\x9c The Congress shall have the power\n\n[t]o regulate commerce . . . among the several states."\n\n703\n\n\x0cpolice power. For Commerce Clause purposes, we have long\nrecognized a difference between economic protectionism, on the\none hand, and health and safety regulation, on the other.\n458 U.S. at 956 (citation omitted). If the Nebraska statute in question had been\n\xe2\x80\x9c narrowly tailored to the conservation and preservation rationale,\xe2\x80\x9d the Court\nindicated it might not have found a constitutional objection. Id. at 958.163\nTherefore, it may be possible that a state could constitutionally impose some\nrestrictions on the export or allocation of petroleum products to protect the health\nof its citizens in times of an emergency energy shortage if the restrictions were\nnarrowly tailored to serve legitimate state preservation and conservation pur\xc2\xad\nposes. Any such statutes, however, would have to be subject to \xe2\x80\x9c the \xe2\x80\x98strictest\nscrutiny\xe2\x80\x99 reserved for facially discriminatory legislation.\xe2\x80\x9d Id., quoting Hughes v.\nOklahoma, supra, 441 U.S. at 337.\nState laws or regulations that do not discriminate in favor of the state\xe2\x80\x99s own\nproducers or consumers would not necessarily present the same facial constitu\xc2\xad\ntional objection, but may nonetheless be subject to challenge under the Com\xc2\xad\nmerce Clause. For example, if the regulation places unreasonable barriers to the\nflow of goods across state lines,164 imposes price controls or other regulation\ndirectly on interstate transactions,165 or poses a threat of multiple, inconsistent\nburdens because of similar, conflicting regulation by other states, it would be\nvulnerable to a constitutional challenge.166 State measures designed to deal with\nenergy emergencies that are strictly local in scope and effect and are clearly\nlinked to preservation of the health and safety of the citizens of the state, would\nprobably withstand constitutional scrutiny. A determination whether particular\nstate laws or regulations would be vulnerable to challenge on the ground that they\nunconstitutionally burden interstate commerce can be made, however, only on a\ncase-by-case basis.\nG. Authority fo r Public Information Activities\n\nA number of federal statutes charge the Department of Energy with specific\nresponsibility and authority to gather and publish information relevant to energy\nsupplies and energy emergency preparedness activities. See, e.g., 42 U.S.C.\n\xc2\xa7 6361 (b) (Secretary of Energy directed to develop a public education program to\nencourage energy conservation and efficiency); 15 U.S.C. \xc2\xa7\xc2\xa7 772, 796 (Secre\xc2\xad\n163 The scope o f this potential exception to the Court\xe2\x80\x99s otherwise consistent holdings that a state may not\nconstitutionally restrict its natural resources to its own citizens might conceivably be limited by the Court to\nrestrictions on the export o r use of water In \xe2\x80\x9c balancing\xe2\x80\x9d the state\xe2\x80\x99s interests that might justify otherwise\ndiscrim inatory legislation, the Court gave some weight lo historic claims of state \xe2\x80\x9c ownership\xe2\x80\x9d of water within its\nborders. The Court made clear that such claims are based on a \xe2\x80\x9c legal fiction,\xe2\x80\x9d but noted that they may be \xe2\x80\x9c more\nsubstantial than claims o f public ownership o f other natural resources.\xe2\x80\x9d 458 U S at 951, 956-57. It is unclear,\ntherefore, w hether the narrow exception recognized by the Court would be extended to restrictions on other types of\nnatural resources.\n164 See, e .g ., Hughes v Alexandria Scrap C o r p , 426 U S. 794, 803 (1976)\n165 See, e .g .. Public Utilities Comm\'n v Attleboro Steam & Electric C o., 273 U.S 83 (1927)\n166 See, e .g ., Southern Pacific Co v Arizona, 325 U .S. 761 (1945).\n\n704\n\n\x0ctary of Energy authorized to request, acquire and collect energy information);167\n42 U.S.C. \xc2\xa7 7135 (establishment of Energy Information Administration); 42\nU.S.C. \xc2\xa7 8511(e) (Secretary of Energy directed to publish levels of consumption\nfor targeted energy sources under the EECA). Other public information activities\nmay be undertaken, on a formal or informal basis, in order to carry out functions\ndelegated to the Department of Energy by statute or executive order. See, e .g ., 42\nU.S.C. \xc2\xa7 7101 et seq.; Exec. Order No. 12,038, 3 C.F.R. 136 (1978); Exec.\nOrder No. 11,912, supra.\n\nIII. TViggers for Exercise of Statutory Authorities\nSection 272(a)(3)(B) of the EPCA, as added by \xc2\xa7 3 of the EEPA, provides that\nthis Memorandum of Law should distinguish among three types of situations that\ncould trigger a presidential exercise of authority to deal with a severe petroleum\nshortage, viz:\n(i)\n\nsituations involving limited or general war, international\ntensions that threaten national security, and other Presiden\xc2\xad\ntially declared emergencies;\n(ii) events resulting in activation of the international energy\nprogram; and\n(iii) events or situations less severe than those described in\nclauses (i) and (ii).\n\nAs described in Part I with respect to each statutory authority, the circumstances\nthat provide a basis for exercise of a particular authority differ from statute to\nstatute, and in some cases, among provisions of the same statute. Many of those\ncircumstances overlap. In any particular emergency situation facts may justify\naction under a number of those statutes. Consequently, the President\xe2\x80\x99s authority\ncannot be subdivided neatly into the three categories listed, and an attempt to do\nso with any degree of certainty is inevitably somewhat misleading. Each statute\nmust be considered on its own terms and in light of its legislative history and the\nfacts of a given emergency. However, in order to comply fully with the intent of\n\xc2\xa7 272(a), a rough categorization of the statutory authorities discussed in Part I is\nprovided below. This categorization is not intended in any way to modify or add\nto the description of those authorities in Part I.\nA . Situations Involving War, International Tensions That Threaten National\nSecurity, and Other Presidentially Declared Emergencies\n\nWe have included, within the category of authorities that could be used in the\nenumerated factual situations, provisions that by their terms authorize the Presi\xc2\xad\n167 Functions originally delegated under those provisions to the Administrator of the FederaJ Energy Administra\xc2\xad\ntion have been transferred to the Secretary of Energy. See 42 U S C \xc2\xa7 7151(a).\n\n705\n\n\x0cdent to act in the interests of promoting the national defense and national security\nof the United States:168\nDefense Production Act, 50 U.S.C. app. \xc2\xa7\xc2\xa7 2071(a) & (b), 2158,\n2160\nTrade Expansion Act, 19 U.S.C. \xc2\xa7 1862\nInternational Emergency Economic Powers Act, 50 U .S.C .\n\xc2\xa7 1702\nTrading with the Enemy Act, 50 U.S.C. app. \xc2\xa7 5\nExport Administration Act of 1979, 50 U.S.C. app. \xc2\xa7 2406\nOuter Continental Shelf Lands Act, 43 U.S.C. \xc2\xa7 1341(b)\nMagnuson Act, 50 U.S.C. \xc2\xa7 191\nB. Events Resulting in Activation c f the International Energy Program\n\nWe construe the category described as \xe2\x80\x9c events resulting in activation of the\nInternational Energy Program\xe2\x80\x9d to encompass authorities that are expressly\ncontingent on activation of the IEP emergency system in the event of a 7 percent\noil shortage, in accordance with Chapter IV of the IEP Agreement. We do not\ninclude in this category other statutory authorities that may be relevant to\nparticipation by the United States in the IEP, but that do not necessarily depend on\nactivation of the IEP emergency system:\nEnergy Policy and Conservation Act, 42 U.S.C. \xc2\xa7\xc2\xa7 6271,6272169\nC. Less Severe Events o r Situations\nIncluded within this category are additional provisions that authorize presiden\xc2\xad\ntial or executive action in situations other than those necessarily involving the\nnational defense or security, or requiring activation of the IEP emergency system:\nEnergy Policy and Conservation A ct, 42 U .S.C . \xc2\xa7\xc2\xa7 6212, 6214,\n6231-6241, 6261-6262\nDefense Production Act, 50 U.S.C. app. \xc2\xa7 2071(c)\nEmergency Energy Conservation Act, 42 U.S.C. \xc2\xa7\xc2\xa7 8501-8541\nExport Administration Act, 50 U.S.C. app. \xc2\xa7 2406\nPowerplant and Industrial Fuel Use Act, 42 U.S.C. \xc2\xa7 8374(b)\nPublic Utility Regulatory Policies Act, 15 U.S.C. \xc2\xa7 717z\nFederal Power Act, 16 U .S.C . \xc2\xa7\xc2\xa7 824a(c), 824i, 824j\nNatural Gas Act, 15 U.S.C. \xc2\xa7\xc2\xa7 717b, 717f\nNatural Gas Policy Act, 15 U.S.C. \xc2\xa7\xc2\xa7 3361, 3363\n168 Inclusion in this category of particular statutory authorities that do not, by their terms, require a presidential\ndeclaration o f a national emergency, should not be construed to suggest that any such declaration would be a\nprerequisite for exercise of authority under that statute, or that exercise of that authority would be subject to the\nNEA. See supra at n.78.\n169 As described supra at 5 8 -5 9 , \xc2\xa7 252, 4 2 U .S.C . \xc2\xa7 6272, and the implementing regulations. Voluntary\nAgreement, and Plan o f Action permit limited information exchange by companies prior to activation of the IEP\nem ergency system.\n\n706\n\n\x0cMineral Lands Leasing Act, 30 U.S.C. \xc2\xa7 192\nOuter Continental Shelf Lands Act, 43 U.S.C. \xc2\xa7 1341(b)\nInterstate Commerce Act, 49 U.S.C. \xc2\xa7\xc2\xa7 10928, 11123\nClean Air Act, 42 U.S.C. \xc2\xa7 7410(0\nDisaster Relief Act, 42 U.S.C. \xc2\xa7\xc2\xa7 5145, 5146\nForeign Assistance Act of 1961, 22 U.S.C. \xc2\xa7\xc2\xa7 2346, 2357, 2393\n\nIV. Conclusion\nIn conclusion, it is important to emphasize again that the discussion in this\nMemorandum of the statutory authorities that may be available to the President in\nthe event of a petroleum emergency cannot possibly be exhaustive or entirely\nauthoritative, because the nature and extent of that authority will necessarily\ndiffer depending on the factual situation presented by an actual petroleum\nshortage. Many of the legal issues raised with respect to the President\xe2\x80\x99s authority\ntherefore cannot be fully resolved in the abstract. Within that significant con\xc2\xad\nstraint, we have attempted here to discuss as fully as possible each of the statutory\nauthorities that we believe may be relevant in a future petroleum emergency, and\nto address specific legal issues raised by Congress during its consideration of \xc2\xa7 3\nof the EEPA. Consistent with the terms of that section, we hereby submit this\nMemorandum of Law, for transmission by the President to Congress.\nT heodore\n\nB.\n\nO lson\n\nAssistant Attorney General\nOffice c f Legal Counsel\n\n707\n\n\x0c'