U.S. Oil Companies' Involvement in the International Energy Program

HRD-77-154: Published: Oct 21, 1977. Publicly Released: Oct 21, 1977.

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The Energy Policy and Conservation Act allows U.S. oil companies to participate in the International Energy Program (IEP) and provides for Government monitoring to prevent anticompetitive activities. An allocation systems test was conducted in Paris from October 4 to November 18, 1976, to assess the International Energy Agency's (IEA's) ability to respond to an emergency supply disruption. The test's two main purposes were to assess certain aspects of the data systems' procedures and rules relating to allocation and to evaluate the proposed emergency management organization with respect to the roles of the Industry Supply Advisory Group (ISAG), IEA Secretariat, and IEA Allocation Coordinator. During an emergency, the ISAG would coordinate, under the Secretariat's guidance, the allocation of oil among participating countries.

For the purposes of the allocation systems test, a mock ISAG was created and staffed with seven oil company participants who were all considered supply experts. Once the IEA Secretariat determined the allocation rights and and obligations of participating countries, the information was relayed through the mock ISAG to the reporting companies. These companies were then asked to reallocate their supplies, or more specifically, to balance the allocation rights and obligations. The IEA Secretariat, assisted by the mock ISAG, evaluated, accepted, or rejected these offers as necessary to balance the participating countries' allocation rights and obligations. Future problems may be posed by: the anticompetitive impact of confidential and proprietary data, the monitoring responsibility of the Federal Trade Commission (FTC) and Justice Department employees, and U.S. Government recordkeeping requirements. These areas affect the ability of FTC and Justice Department employees to monitor oil company participation in the IEP.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should consider the competitive sensitivity of questionnaire data and should clarify the roles of the four Federal agencies in monitoring the tests and other oil company activities in the IEP.

 

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