Proclamation 3693—Modifying Proclamation 3279 Adjusting Imports of Petroleum and Petroleum Products

Whereas, pursuant to section 2 of the act of July 1, 1954, as amended (72 Stat. 678), and section 232 of the Trade Expansion Act of 1962 (Public Law 87-794), findings and determinations have been made that adjustments in the imports of crude oil, unfinished oils, and finished products were necessary so that such imports would not threaten to impair the national security, such adjustments have been made by Proclamation 3279 (24 F.R. 1781) and modified by Proclamation 3290 (24 F.R. 3527), Proclamation 3328 (24 F.R. 10133), Proclamation 3386 (25 F.R. 13945), Proclamation 3389 (26 F.R. 507, 811), Proclamation 3509 (27 F.R. 11985), Proclamation 3531 (28 F.R. 4077), and Proclamation 3541 (28 F.R. 5931); and

Whereas, I find and determine that, in order to prevent total imports from impairing accomplishment of the purposes of Proclamation 3279, as amended, it is necessary to impose restrictions on the movement of crude oil, unfinished oils, and finished products into foreign trade zones; and

Whereas, I find and determine that for reasons of equity and competitive capability, there should be authority to include petrochemical plants within the system of allocation of imports; and

Whereas, it appears that, as represented by the Government of the Commonwealth of Puerto Rico, the development of a petrochemical industry in Puerto Rico will provide a substantial and much needed increase in opportunities for employment of its citizens, I find and determine that provisions should be made permitting the development, without impairment of the objectives of Proclamation 3279, as amended, of such an industry in Puerto Rico:

Now, Therefore, I, Lyndon B. Johnson, President of the United States of America, acting under and by virtue of the authority vested in me by the Constitution and the statutes, including section 232 of the Trade Expansion Act of 1962, do hereby proclaim that:

I. Paragraph (a) of section 1 of Proclamation 3279, as amended, is amended to read as follows:

(a) In Districts I—IV, in District V, and in Puerto Rico, no crude oil, unfinished oils, or finished products may be entered for consumption or withdrawn from warehouse for consumption, and no foreign crude oil, unfinished oils, or finished products may be brought into a foreign trade zone in Districts I—IV or in District V for processing within the zone, except (1) by or for the account of a person to whom a license has been issued by the Secretary of the Interior pursuant to an allocation made to such person by the Secretary in accordance with regulations issued by the Secretary, and such entries, withdrawals, and shipments into foreign trade zones may be made only in accordance with the terms of such license, or (2) as authorized by the Secretary pursuant to paragraph (b) of this section, or (3) as to finished products, by or for the account of a department, establishment, or agency of the United States, which shall not be required to have such a license but which shall be subject to the provisions of paragraph (c) of this section, or (4) crude oil, unfinished oils, or finished products which are transported into the United States by pipeline, rail, or other means of overland transportation from the country where they were produced, which country, in the case of unfinished oils or finished products, is also the country of production of the crude oil from which they were processed or manufactured.

2. Subparagraph (1) of paragraph (a) and paragraph (c) of section 2 of Proclamation 3279, as amended, are severally amended to read as follows:

(a) (1) In Districts I—IV, for a particular allocation period the maximum level of imports, subject to allocation, of crude oil, unfinished oils, and finished products (other than residual fuel oil to be used as fuel) shall be an amount equal to the difference between (i) 12.2 percent of the quantity of crude oil and natural gas liquids which the Secretary estimates will be produced in these districts during the particular allocation period and (ii) the quantity of imports of crude oil, unfinished oils, and finished products excepted by clause (4) of paragraph (a) of section 1 which the Secretary estimates will be imported into these districts during that allocation period plus the quantity estimated by the Secretary by which shipments of unfinished oils and finished products (other than residual fuel oil to be used as fuel) from Puerto Rico to Districts I—IV during that allocation period will exceed the quantity so shipped during a comparable base period in the year 1965. As used in this subparagraph (1), the term "natural gas liquids" means natural gas products and other hydrocarbons such as isopentane, propane, and butane, or mixtures thereof, recovered from natural gas by means other than refining. Within such maximum level, imports of unfinished oils shall not exceed such per-centum of the permissible imports of crude oil and unfinished oils as the Secretary may determine and imports of finished products (other than residual fuel oil to be used as fuel) shall not exceed the level of imports of such products into these districts during the calendar year 1957.

(c) The Secretary, having taken into account the standards prescribed for allocation of imports of crude oil and unfinished oils into Puerto Rico, any actions taken pursuant to section 4, and shipments from Puerto Rico into Districts I—IV, shall establish for each allocation period a maximum level of imports into Puerto Rico of crude oil and unfinished oils which, in his judgment, is consonant with the objectives of this proclamation. The maximum level of imports of finished products into Puerto Rico for a particular allocation period shall be approximately the level of such imports during all or part of the calendar year 1958 as determined by the Secretary to be consonant with the purposes of this proclamation or such higher level as the Secretary may determine is required to meet a demand in Puerto Rico for finished products that would not otherwise be met.

3. Subparagraphs 1, 2, and 3 of paragraph (b) of section 3 of Proclamation 3279, as amended, are severally amended to read as follows:

(b) (1) With respect to the allocation of imports of crude oil and unfinished oils into Districts I—IV and into District V, such regulations shall provide, to the extent possible, for a fair and equitable distribution among persons having refinery capacity in these districts in relation to refinery inputs (excluding inputs of crude oil or unfinished oils imported pursuant to clause (4) of paragraph (a) of Section 1). The Secretary may by regulation also provide for the making of such allocations to persons having petrochemical plants in these districts in relation to inputs to such plants (excluding inputs of crude oil or unfinished oils imported pursuant to clause (4) of paragraph (a) of section 1). Provision may be made in the regulations for the making of such allocations on the basis of graduated scales of inputs. Provision shall be made in the regulations for the gradual reduction of allocations made on the basis of the last allocations of imports of crude oil under the Voluntary Oil Import Program, except that provision shall be made for a more rapid reduction of those allocations based on allocations under the Voluntary Oil Import Program which reflected imports of crude oil in the category now covered by clause (4) of paragraph (a) of section 1.

(2) Such regulations shall provide for the allocation of imports of crude oil and unfinished oils into Puerto Rico among persons having refinery capacity in Puerto Rico in the calendar year 1964 on the basis of estimated requirements, acceptable to the Secretary, of each such person for crude oil and unfinished oils. The regulations shall provide also that if, during a period comprising the same number of months as an allocation period and ending three months before the beginning of the allocation period, any such person ships to Districts I—IV unfinished oils or finished products (other than residual fuel oil to be used as fuel) or sells unfinished oils or finished products (other than residual fuel oil to be used as fuel) which are shipped to Districts I—IV in excess of the volume of unfinished oils or finished products (other than residual fuel oil to be used as fuel) which he so shipped or which he sold and were so shipped during the corresponding base period in the years 1964 and 1965 or in the year 1965, as the case may be, the person's allocation for the next allocation period shall be reduced by the amount of the excess. In addition the Secretary may provide by regulation for the making, in instances in which the Secretary determines that such action would not impair the accomplishment of the objectives of this proclamation, of allocations of imports of crude oil and unfinished oils into Puerto Rico to persons as feedstocks for facilities which will be established or for the operation of facilities which are established and which in the judgment of the Secretary will promote substantial expansion of employment in Puerto Rico through industrial development, and such regulations shall provide for the imposition of such conditions and restrictions upon such allocations as the Secretary may deem necessary to assure that any imports so allocated are used for the purposes for which an allocation is made and that the holder of such an allocation fulfills commitments made in connection with the making of the allocation.

(3) Except for crude oil or unfinished oils imported pursuant to special relief granted pursuant to section 4, such regulations shall require that imported crude oil and unfinished oils be processed in the licensee's refinery or petrochemical plant, except that exchanges for domestic crude or unfinished oils may be made if otherwise lawful, if effected on a current basis and reported in advance to the Secretary, and if the domestic crude or unfinished oils are processed in the licensee's refinery or petrochemical plant.

4. Subparagraph (1) of paragraph (g) of section 9 of Proclamation 3279, as amended, is amended to read as follows:

(g) (1) Liquefied gases—hydrocarbon gases such as ethane, propane, propylene, butylene, and butanes (but not methane) which are recovered from natural gas or produced in the refining of petroleum and which, to be maintained in a liquid state at ambient temperatures, must be kept under greater than atmospheric pressures;

5. This amendatory proclamation shall become effective on January 1, 1966.

In Witness Whereof, I have hereunto set my hand and caused the Seal of the United States of America to be affixed.

DONE at the City of Washington this tenth day of December in the year of our Lord nineteen hundred and sixty-five, and of the Independence of the United States of America the one hundred and ninetieth.

LYNDON B. JOHNSON

By the President:

GEORGE W. BALL

Acting Secretary of State