June 5, 2003

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Supplemental Order

Name of Petitioner: Ameripol Synpol Corporation

Dates of Filing: May 29, 2003

Case Numbers: RC272-426

On May 14, 2003, the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) issued a Decision and Order that rescinded in part refunds granted to Ameripol Synpol Corporation (ASC) in the Subpart V crude oil refund proceeding. See Ameripol Synpol Corporation, Case No. RC272-00414 (May 14, 2003). We have subsequently discovered that the amount of the refund rescinded in the May 14 Decision was incorrect.

In two instances during the course of this proceeding, ASC reduced the volume of purchases for which it was claiming a refund. ASC’s original application claimed purchases of 111,737,150 gallons of extender oils and 3,214,447 gallons of asphalt. Application at 2. However, in subsequent documentation provided to our office, the applicant revised its claim to reflect purchases of 95,604,932 gallons of extender oils and 2,909,095 gallons of asphalt. See enclosures to Letter from Daniel S. Brown, Huber Lawrence & Abell, to Steven Goering, OHA (June 14, 2000). In addition, in an August 14, 2000 letter to our office, ASC stated that it was reducing “by 185,306,352 gallons” its claim for purchases of two specific C4 feedstock streams. Letter from Daniel S. Brown, Huber Lawrence & Abell, to Steven Goering, OHA (August 14, 2000) at 2-3.

However, the amount of the refund rescinded in our May 14 decision did not account for the 16,437,570 gallon reduction of ASC’s claimed purchases of extender oils and asphalt. Nor did it account for 91,095,386 gallons of the reduction of its claimed C4 feedstock purchases.(1) Thus, our

May 14 decision found that 195,246,240 gallons of purchases for which a refund was originally granted were ineligible for a refund, and accordingly rescinded $312,394 of the refund. In fact, the total of purchases ineligible for a refund is 302,779,196 gallons, resulting in a recision of $484,446 (302,779,196 gallons of ineligible purchases multiplied by the volumetric amount upon which the original refunds were based, $0.0016 per gallon).

In the normal regulatory course, this order would require a refund of the $484,446 differential described above. However, the effect of 11 U.S.C. § 362 precludes the agency from enforcing such an obligation,(2) while not mitigating the obligation itself.

It Is Therefore Ordered That:

(1) Pursuant to 11 U.S.C. § 362(b)(4), the Office of Hearings and Appeals hereby modifies the Decision and Order issued by the Department of Energy on May 14, 2003, Ameripol Synpol Corporation, Case No. RC272-00414, as set forth in Paragraph (2) below.

(2) The total amount of the refund rescinded in Ameripol Synpol Corporation, Case No. RC272- 00414, shall be $484,446.

(3) The determination made in this Decision and Order is based upon the presumed validity of the statements and documentary material submitted by the applicant. This determination may be revoked or modified at any time upon a finding that the basis underlying the refund application is incorrect.

(4) This is a final Order of the Department of Energy.

George B. Breznay

Director

Office of Hearings and Appeals

Date: June 5, 2003

(1) These discrepancies were noted in a letter submitted to our office by Philip P. Kalodner, attorney for a group of utilities and manufacturers. Letter from Philip P. Kalodner to Steven Goering, OHA (May 23, 2003). Mr. Kalodner also reiterated his concern that the right to a portion of the refund granted to ASC may properly belong to Texas U.S. Chemical Company (TUC). Mr. Kalodner is incorrect that ASC’s refund should be further reduced on this basis. First, we note that all of the feedstock purchases for which a refund has been granted to ASC were purchases by the Ameripol Division of the B.F. Goodrich Company (BFG) from Gulf Oil refineries. Ameripol Synpol Corporation, Case No. RC272-00414 (May 14, 2003) at 4-5 (describing contemporaneous documentation and affidavits regarding BFG’s purchases from Gulf Oil refineries). BFG’s feedstock purchases from Gulf were in no way related to any purchases made by TUC, as the two companies were unaffiliated during the refund period. The only purchases made by TUC for which a refund was granted to ASC are those of extender oils and asphalt, both of which were related to TUC’s polymers business. See enclosures to Letter from Daniel S. Brown, Huber Lawrence & Abell, to Steven Goering, OHA (June 14, 2000) (summarizing and documenting claimed purchases of extender oils and asphalt). In August 1980, TUC’s polymers business was transferred to Synpol, Inc., along with the right to a refund for any purchases made by that business. The sales agreement under which TUC sold its polymers business transferred from TUC to Synpol, Inc., “all other assets and business of [TUC] relating to the Polymers business and not reflected in any category identified on the Pro Forma Closing Balance Sheet, or every kind and description, wherever located, tangible or intangible, real or personal, absolute or contingent; . . .” Id. Although potential refunds are not explicitly mentioned by the agreement, its language clearly indicates the intent of the TUC to transfer to Synpol all assets related to its polymers business, including those such as refunds, that were unknown and unenumerated at the time of the sales. See Murphy Oil Corp./Severson Oil Co., 20 DOE ¶ 85,695 at 89,614 (right to refund transferred via agreement transferring “any and all other assets and properties, whether real, personal or mixed, and whether tangible or intangible”). The agreement in question also specified those assets to be retained by TUC, and those specified assets did not include the right to potential refunds arising from TUC’s polymers business. See Murphy Oil Corp./Maritrans Operating Partners, L.P., 22 DOE ¶ 85,187 at 88,507 (right to refund transferred where assets specified to be retained by seller did not include the right to potential refunds). Subsequent agreements transferred the right to a refund to Synpol’s owner, Uniroyal Tire Company, Inc., then to Uniroyal’s Ameripol Synpol Division, and finally to what became Ameripol Synpol Corporation. See enclosures to Letter from Daniel S. Brown, Huber Lawrence & Abell, to Steven Goering, OHA (April 13, 2000). Thus, ASC has submitted documentation demonstrating that it is a successor in interest to these companies and, under our precedents, would be the proper recipient of a refund based upon their eligible purchases.

(2) On December 16, 2002, Ameripol Synpol filed a petition for reorganization under chapter 11 of Title 11 of the United States Code (Bankruptcy Act) in the District of Delaware (Dkt. No. 02-13682 (KJC)). Any claim or obligation pursuant to this regulatory action is therefore subject to the requirements of 11 U.S.C. § 362, and should not be construed as an effort to enforce a money judgement.