Opinion ID: 771199
Heading Depth: 2
Heading Rank: 3

Heading: The Scope of the Stripper Well Agreement

Text: 18 The Stripper Well Agreement was intended to settle the Stripper Well litigation and other proceedings involving Alleged Crude Oil Violations, and covers only funds that have been or will be collected as a result of the alleged violations in issue. (emphasis added). Therefore, whether the Stripper Well Agreement covers Citronelle funds depends upon the meaning and scope of the term Alleged Crude Oil Violations within the Stripper Well Agreement. We find the meaning of the term unambiguous because it was defined within the settlement agreement to mean other proceedings, both judicial and administrative, involving alleged violations of DOE's price and allocation controls applicable to crude oil . . . . Moreover, at the time the Stripper Well Agreement was entered into, the DOE's regulations defined violations as practices that circumvent or contravene or result in a circumvention or contravention of the requirements of any DOE regulation. See 10 C.F.R. § 205.202 (1996). Thus, for an alleged crude oil violation to exist, a person must have circumvented or contravened one of the DOE's price and allocation controls applicable to crude oil. 19 Clearly, the Citronelle exception was not a violation of any sort because it was a DOE-granted exception to the mandated price cap. While perhaps broad in scope regarding violations, the term Alleged Crude Oil Violations in the Stripper Well Agreement does not cover a situation such as Citronelle, involving the termination of an unused grant of exception relief. Nothing in the grant, use, or return of the Citronelle exception relief funds constitutes a violation of the DOE's price and allocation controls applicable to crude oil. 20 As Con Ed points out, the refiners specifically excluded the Citronelle funds from their Stripper Well Agreement waivers, tending to demonstrate at least the refiners' belief that the Stripper Well Agreement covered the Citronelle funds. However, we find that the refiners' exclusion was made with an overabundance of caution and, absent more compelling evidence, does not change the unambiguous meaning of the term Alleged Crude Oil Violations. 21 The Citronelle exception relief was not an Alleged Crude Oil Violation because the Citronelle funds were part of an authorized program that excepted Citronelle crude oil from the DOE price cap regulations for the purpose of financing tertiary oil exploration. When Citronelle abandoned tertiary exploration, the Government decided to refund the previously authorized escrow funds. No regulatory violation occurred. Thus, we hold that the Stripper Well Agreement did not encompass the Citronelle escrow. Consequently, this court considers the scope of the parties' waivers in the Stripper Well Agreement irrelevant to the distribution of Citronelle funds.