II

Calendar No. 287

106TH CONGRESS

1ST SESSION S. 1051

[Report No. 106–163]

To amend the Energy Policy and Conservation Act to manage the Strategic

Petroleum Reserve more effectively, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 13, 1999

Mr. MURKOWSKI (for himself and Mr. BINGAMAN) (by request) introduced the

following bill; which was read twice and referred to the Committee on Energy and Natural Resources

SEPTEMBER 27, 1999

Reported by Mr. MURKOWSKI, with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To amend the Energy Policy and Conservation Act to manage the Strategic Petroleum Reserve more effectively,

and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. That this Act may be cited as the ‘‘En4 ergy Policy and Conservation Act Amendments’’.
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1 SEC. 2. Section 2 of the Energy Policy and Conserva2 tion Act (42 U.S.C. 6201) is amended—

3 (a) in paragraph (1) by striking ‘‘standby’’ and

4 ‘‘, subject to congressional review, to impose ration5 ing, to reduce demand for energy through the imple6 mentation of energy conservation plans, and’’; and

7 (b) by striking paragraphs (3) and (6).

8 SEC. 3. Section 3 of the Energy Policy and Conserva9 tion Act (42 U.S.C. 6202) is amended in paragraph (8)

10 by inserting ‘‘or international’’ before ‘‘energy supply

11 shortage’’.

12 SEC. 4. Title I of the Energy Policy and Conservation

13 Act (42 U.S.C. 6211–6251) is amended—

14 (a) by striking section 102 (42 U.S.C. 6211)

15 and its heading;

16 (b) by striking section 104(b)(1);

17 (c) in section 105 (42 U.S.C. 6213)—

18 (1) by amending subsection (e) to read as

19 follows:

20 ‘‘(e) On or after December 31, 2000, the Secretary

21 shall establish a program for setting the terms of joint

22 bidding by any person for the right to explore for and de23 velop crude oil, natural gas, natural gas liquids, sulphur,

24 and other minerals located on Outer Continental Shelf

25 lands. The program shall consider the goals of ensuring
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1 a fair return, encouraging timely and efficient resource de2 velopment, and other goals as the Secretary deems appro3 priate. Conditions under which joint bidding will be per4 mitted or restricted will be established through regula5 tion.’’;

6 (2) by adding subsection (f) to read as fol7 lows:

8 ‘‘(f) Subsections (a) through (d) of this section shall

9 expire on the effective date of the program established by

10 the Secretary pursuant to subsection (e).’’.

11 (d) by striking section 106 (42 U.S.C. 6214)

12 and its heading;

13 (e) by amending section 151(b) (42 U.S.C.

14 6231) to read as follows:

15 ‘‘(b) It is the policy of the United States to provide

16 for the creation of a Strategic Petroleum Reserve for the

17 storage of up to 1 billion barrels of petroleum products

18 to reduce the impact of disruptions in supplies of petro19 leum products, to carry out obligations of the United

20 States under the international energy program, and for

21 other purposes as provided for in this Act.’’;

22 (f) in section 152 (42 U.S.C. 6232)—

23 (1) by striking paragraphs (1), (3) and

24 (7), and
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1 (2) in paragraph (11) by striking ‘‘; such

2 term includes the Industrial Petroleum Reserve,

3 the Early Storage Reserve, and the Regional

4 Petroleum Reserve’’.

5 (g) by striking section 153 (42 U.S.C. 6233)

6 and its heading;

7 (h) in section 154 (42 U.S.C. 6234)—

8 (1) by amending subsection (a) to read as

9 follows:

10 ‘‘(a) A Strategic Petroleum Reserve for the storage

11 of up to 1 billion barrels of petroleum products shall be

12 created pursuant to this part.’’;

13 (2) by amending subsection (b) to read as

14 follows:

15 ‘‘(b) The Secretary, in accordance with this part,

16 shall exercize authority over the development, operation,

17 and maintenance of the Reserve.’’; and

18 (3) by striking subsections (c), (d), and

19 (e);

20 (i) by striking section 155 (42 U.S.C. 6235)

21 and its heading;

22 (j) by striking section 156 (42 U.S.C. 6236)

23 and its heading;

24 (k) by striking section 157 (42 U.S.C. 6237)

25 and its heading;
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1 (l) by striking section 158 (42 U.S.C. 6238)

2 and its heading;

3 (m) by amending the heading for section 159

4 (42 U.S.C. 6239) to read, ‘‘Development, Operation,

5 and Maintenance of the Reserve’’;

6 (n) in section 159 (42 U.S.C. 6239)—

7 (1) by striking subsections (a), (b), (c),

8 (d), and (e);

9 (2) by amending subsection (f) to read as

10 follows:

11 ‘‘(f) In order to develop, operate, or maintain the

12 Strategic Petroleum Reserve, the Secretary may—

13 ‘‘(1) issue rules, regulations, or orders;

14 ‘‘(2) acquire by purchase, condemnation, or oth15 erwise, land or interests in land for the location of

16 storage and related facilities;

17 ‘‘(3) construct, purchase, lease, or otherwise ac18 quire storage and related facilities;

19 ‘‘(4) use, lease, maintain, sell or otherwise dis20 pose of land or interests in land, or of storage and

21 related facilities acquired under this part, under

22 such terms and conditions as the Secretary considers

23 necessary or appropriate;

24 ‘‘(5) acquire, subject to the provisions of section

25 160, by purchase, exchange, or otherwise, petroleum
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1 products for storage in the Strategic Petroleum Re2 serve;

3 ‘‘(6) store petroleum products in storage facili4 ties owned and controlled by the United States or in

5 storage facilities owned by others if those facilities

6 are subject to audit by the United States;

7 ‘‘(7) execute any contracts necessary to develop,

8 operate, or maintain the Strategic Petroleum Re9 serve;

10 ‘‘(8) bring an action, when the Secretary con11 siders it necessary, in any court having jurisdiction

12 over the proceedings, to acquire by condemnation

13 any real or personal property, including facilities,

14 temporary use of facilities, or other interests in land,

15 together with any personal property located on or

16 used with the land.’’; and

17 (3) in subsection (g)—

18 (A) by striking ‘‘implementation’’ and

19 inserting ‘‘development’’; and

20 (B) by striking ‘‘Plan’’;

21 (4) by striking subsections (h) and (i);

22 (5) by amending subsection (j) to read as

23 follows:

24 ‘‘(j) If the Secretary determines expansion beyond

25 680,000,000 barrels of petroleum product inventory is ap-
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1 propriate, the Secretary shall submit a plan for expansion

2 to the Congress.’’; and

3 (6) by amending subsection (l) to read as

4 follows:

5 ‘‘(l) During a drawdown and sale of Strategic Petro6 leum Reserve petroleum products, the Secretary may issue

7 implementing rules, regulations, or orders in accordance

8 with section 553 of title 5, United States Code, without

9 regard to rulemaking requirements in section 523 of this

10 Act, and section 501 of the Department of Energy Organi11 zation Act (42 U.S.C. 7191).’’;

12 (o) in section 160 (42 U.S.C. 6240)—

13 (1) in subsection (a), by striking all before

14 the dash and inserting the following—

15 ‘‘(a) The Secretary may acquire, place in storage,

16 transport, or exchange’’;

17 (2) in subjection (a)(1) by striking all after

18 ‘‘Federal lands’’;

19 (3) in subsection (b), by striking ‘‘, includ20 ing the Early Storage Reserve and the Regional

21 Petroleum Reserve’’ and by striking paragraph

22 (2); and

23 (4) by striking subsections (c), (d), (e),

24 and (g);

25 (p) in section 161 (42 U.S.C. 6241)—
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1 (1) by striking ‘‘Distribution of the Re2 serve’’ in the title of this section and inserting

3 ‘‘Sale of Petroleum Products’’;

4 (2) in subsection (a), by striking ‘‘draw5 down and distribute’’ and inserting ‘‘draw down

6 and sell petroleum products in’’;

7 (3) by striking subsections (b), (c), and (f);

8 (4) by amending subsection (d)(1) to read

9 as follows:

10 ‘‘(d)(1) Drawdown and sale of petroleum products

11 from the Strategic Petroleum Reserve may not be made

12 unless the President has found drawdown and sale are re13 quired by a severe energy supply interruption or by obliga14 tions of the United States under the international energy

15 program.’’;

16 (5) by amending subsection (e) to read as

17 follows:

18 ‘‘(e)(1) The Secretary shall sell petroleum products

19 withdrawn from the Strategic Petroleum Reserve at public

20 sale to the highest qualified bidder in the amounts, for

21 the period, and after a notice of sale considered appro22 priate by the Secretary, and without regard to Federal,

23 State, or local regulations controlling sales of petroleum

24 products.
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1 ‘‘(2) The Secretary may cancel in whole or in part

2 any offer to sell petroleum products as part of any draw3 down and sale under this Section.’’; and

4 (6) in subsection (g)—

5 (A) by amending paragraph (1) to

6 read as follows:

7 ‘‘(g)(1) The Secretary shall conduct a continuing

8 evaluation of the drawdown and sales procedures. In the

9 conduct of an evaluation, the Secretary is authorized to

10 carry out a test drawdown and sale or exchange of petro11 leum products from the Reserve. Such a test drawdown

12 and sale or exchange may not exceed 5,000,000 barrels

13 of petroleum products.’’;

14 (B) by striking paragraphs (2) and

15 (6A), striking the subparagraph designator

16 ‘‘(B)’’ in paragraph (6), and by deleting

17 the last sentence of paragraph (6);

18 (C) in paragraph (4), by striking

19 ‘‘90’’ and inserting ‘‘95’’;

20 (D) in paragraph (5), by striking

21 ‘‘drawdown and distribution’’ and inserting

22 ‘‘test’’; and

23 (E) in paragraph (8), by striking

24 ‘‘drawdown and distribution’’ and inserting

25 ‘‘test’’;
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1 (7) in subsection (h)—

2 (A) in paragraph (1) by striking ‘‘dis3 tribute’’ and inserting ‘‘sell petroleum

4 products from’’;

5 (B) in paragraph (2) by striking ‘‘In

6 no case may the Reserve’’ and inserting

7 ‘‘Petroleum products from the Reserve

8 may not’’; and

9 (C) in paragraph (3) by striking ‘‘dis10 tribution’’ each time it appears and insert11 ing ‘‘sale’’;

12 (q) by striking section 164 (42 U.S.C. 6244)

13 and its heading;

14 (r) by amending section 165 (42 U.S.C. 6245)

15 and its heading to read as follows—

16 ‘‘ANNUAL REPORT

17 ‘‘SEC. 165. The Secretary shall report annually to the

18 President and the Congress on actions taken to implement

19 this part. This report shall include—

20 ‘‘(1) the status of the physical capacity of the

21 Reserve and the type and quantity of petroleum

22 products in the Reserve;

23 ‘‘(2) an estimate of the schedule and cost to

24 complete planned equipment upgrade or capital in25 vestment in the Reserve, including upgrades and in-
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1 vestments carried out as part of operational mainte2 nance or extension of life activities;

3 ‘‘(3) an identification of any life-limiting condi4 tions or operational problems at any Reserve facility,

5 and proposed remedial actions including an estimate

6 of the schedule and cost of implementing those re7 medial actions;

8 ‘‘(4) a description of current withdrawal and

9 distribution rates and capabilities, and an identifica10 tion of any operational or other limitations on those

11 rates and capabilities;

12 ‘‘(5) a listing of petroleum product acquisitions

13 made in the preceding year and planned in the fol14 lowing year, including quantity, price, and type of

15 petroleum;

16 ‘‘(6) a summary of the actions taken to develop,

17 operate, and maintain the Reserve;

18 ‘‘(7) a summary of the financial status and fi19 nancial transactions of the Strategic Petroleum Re20 serve and Strategic Petroleum Reserve Petroleum

21 Accounts for the year.

22 ‘‘(8) a summary of expenses for the year, and

23 the number of Federal and contractor employees;
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1 ‘‘(9) the status of contracts for development,

2 operation, maintenance, distribution, and other ac3 tivities related to the implementation of this part;

4 ‘‘(10) a summary of foreign oil storage agree5 ments and their implementation status;

6 ‘‘(11) any recommendations for supplemental

7 legislation or policy or operational changes the Sec8 retary considers necessary or appropriate to imple9 ment this part.’’;

10 (s) in section 166 (42 U.S.C. 6246) by striking

11 ‘‘for fiscal year 1997.’’;

12 (t) in section 167 (42 U.S.C. 6247)—

13 (1) in subsection (b)—

14 (A) by inserting ‘‘for test sales of pe15 troleum products from the Reserve,’’ after

16 ‘‘Strategic Petroleum Reserve,’’, and by in17 serting ‘‘for’’ before ‘‘the drawdown’’ and

18 inserting ‘‘, sale,’’ after ‘‘drawdown’’;

19 (B) by striking paragraph (1); and

20 (C) in paragraph (2), by striking

21 ‘‘after fiscal year 1982’’; and

22 (2) by striking subsection (e);

23 (u) in section 171 (42 U.S.C. 6249)—

24 (1) by amending subsection (b)(2)(B) to

25 read as follows:
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1 ‘‘(B) the Secretary notifies each House of

2 the Congress of the determination and identifies

3 in the notification the location, type, and owner4 ship of storage and related facilities proposed to

5 be included, or the volume, type, and ownership

6 of petroleum products proposed to be stored, in

7 the Reserve, and an estimate of the proposed

8 benefits.’’;

9 (2) in subsection (b)(3), by striking ‘‘dis10 tribution of’’ and inserting ‘‘sale of petroleum

11 products from’’;

12 (v) in section 172 (42 U.S.C. 6249a), by strik13 ing subsections (a) and (b);

14 (w) by striking section 173 (42 U.S.C. 6249b)

15 and its heading; and

16 (x) in section 181 (42 U.S.C. 6251), by striking

17 ‘‘September 30, 1999’’ each time it appears and in18 serting ‘‘September 30, 2003.’’.

19 SEC. 5. Title II of the Energy Policy and Conserva20 tion Act (42 U.S.C. 6211–6251) is amended—

21 (a) by striking Part A (42 U.S.C. 6261 through

22 6264) and its heading;

23 (b) by adding at the end of section 256(h),

24 ‘‘There are authorized to be appropriated for fiscal
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1 years 1999 through 2003, such sums as may be nec2 essary.’’

3 (c) by striking Part C (42 U.S.C. 6281 through

4 6282) and its heading; and

5 (d) in section 281 (42 U.S.C. 6285), by striking

6 ‘‘September 30, 1999’’ each time it appears and in7 serting ‘‘September 30, 2003’’.

8 SEC. 6. The Table of Contents for the Energy Policy

9 and Conservation Act is amended—

10 (a) by striking the items relating to sections

11 102, 106, 153, 155, 156, 157, 158, and 164;

12 (b) by amending the item relating to section

13 159 to read as follows:

‘‘Development, Operation, and Maintenance of the Reserve.’’;

14 (c) by amending the item relating to section

15 161 to read as follows:

‘‘Drawdown and Sale of Petroleum Products’’

16 (d) by amending the item relating to section

17 165 to read as follows:

‘‘Annual Report’’

18 SECTION 1. Title I of the Energy Policy and Conserva19 tion Act (42 U.S.C. 6211–6251) is amended—

20 (a) In section 166 (42 U.S.C. 6246), by inserting

21 ‘‘through 2003’’ after ‘‘1999’’.

22 (b) In section 181 (42 U.S.C. 6251), by striking

23 ‘‘1999’’ each place it appears and inserting ‘‘2003’’.
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1 SEC. 2. Title II of the Energy Policy and Conservation

2 Act (42 U.S.C. 6261–6285) is amended—

3 (a) In section 256(h) (42 U.S.C. 6276(h)), by in4 serting ‘‘through 2003’’ after ‘‘1997’’.

5 (b) In section 281 (42 U.S.C. 6285), by striking

6 ‘‘1999’’ each place it appears and inserting ‘‘2003’’.
Calendar No. 287

106TH CONGRESS

1ST SESSION S. 1051

[Report No. 106–163]

A BILL

To amend the Energy Policy and Conservation Act

to manage the Strategic Petroleum Reserve moreeffectively, and for other purposes.

SEPTEMBER 27, 1999

Reported with an amendment