Opinion ID: 703151
Heading Depth: 3
Heading Rank: 2

Heading: The lighter resid

Text: 65 Petitioners also challenge FERC's decision to expand the resid cut to include petroleum with a boiling point between 1000 and 1050 degrees, and to value that portion of the resid cut at the price of low-sulfur No. 6 fuel oil. They claim that there is no evidence in the record that supports either of these decisions. 66 We believe there is sufficient evidence to support the Commission's decision to expand the range of the components of the petroleum streams that it categorizes as resid. In the rehearing proceedings, an Exxon consultant testified that the Commission's previous selection of 1050 degrees as the cut-off point for the resid cut was arbitrary and that 1000 degrees was more consistent with what West Coast refineries tend to characterize as residual fuel oil. Aff. of Joe F. Moore, reprinted in J.A. at 2162-63. In light of the fact that there is no published market price for resid and, consequently, no precise specifications for it, we find it was well within FERC's discretion to rely on this testimony to reach its decision to expand the resid cut. 67 Petitioners are correct, however, that there is no evidence in the record to justify the Commission's decision to value the lighter resid at the price of No. 6 fuel oil. FERC defends this decision on the ground that it has a lower viscosity than the 1050+ resid and thus is more valuable. This response is inconsistent with the Commission's position, discussed above, that the viscosity of resid has no bearing on its value because most resid is used as a feedstock. In addition, as is the problem with the Commission's valuation of the 1050+ resid and the light and heavy distillates, we know of no evidence in the record that suggests that the price of No. 6 fuel oil bears a close relationship to the value of North Slope petroleum with a boiling point between 1000 and 1050 degrees. As a result, we must remand the Commission's method of valuing the lighter resid as well.