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[House Report 113-341]
[From the U.S. Government Publishing Office]

113th Congress                                            Rept. 113-341
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

======================================================================

 
 TO AMEND THE ENERGY INDEPENDENCE AND SECURITY ACT OF 2007 TO IMPROVE 
    UNITED STATES-ISRAEL ENERGY COOPERATION, AND FOR OTHER PURPOSES

                                _______
                                

                February 5, 2014.--Ordered to be printed

                                _______
                                

  Mr. Upton, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3683]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 3683) to amend the Energy Independence and 
Security Act of 2007 to improve United States-Israel energy 
cooperation, and for other purposes, having considered the 
same, report favorably thereon without amendment and recommend 
that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     4
Committee Consideration..........................................     4
Committee Votes..................................................     4
Committee Oversight Findings.....................................     4
Statement of General Performance Goals and Objectives............     4
New Budget Authority, Entitlement Authority, and Tax Expenditures     4
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     4
Committee Cost Estimate..........................................     4
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     6
Duplication of Federal Programs..................................     6
Disclosure of Directed Rule Makings..............................     7
Advisory Committee Statement.....................................     7
Applicability to Legislative Branch..............................     7
Section-by-Section Analysis of the Legislation...................     7
Changes in Existing Law Made by the Bill, as Reported............     7

                          Purpose and Summary

    H.R. 3683, a bill to amend the Energy Independence and 
Security Act of 2007 to improve United States-Israel energy 
cooperation, and for other purposes, was introduced by 
Representatives Upton, Waxman, Terry, Gene Green, and Bilirakis 
on December 10, 2013. The bill amends the Energy Independence 
and Security Act of 2007 (EISA, Public Law 110-140, 41 U.S.C. 
17337) to strengthen the collaboration between the United 
States and Israel on energy development and to bolster the 
existing United States-Israel energy relationship by 
encouraging increased cooperation between the two countries. 
The bill encourages inter-governmental collaboration in energy 
technology innovation, technology transfer, and analysis of 
geopolitical implications of new natural resource development, 
while also encouraging private sector business development. The 
bill also facilitates continued engagement between the 
countries to share best practices in a number of areas, 
including: research, development, and deployment of renewable 
energy and energy efficiency, energy infrastructure 
cybersecurity; environmental management of deep water 
exploration; and coastal protection and restoration. The bill 
also expands an existing United States-Israel grant program to 
include projects focused on natural gas and water efficiency.

                  Background and Need for Legislation

U.S.-Israel energy relationship

    The United States and Israel have a long-standing 
relationship in joint energy research and development. The two 
countries entered into an Energy Research and Development 
Agreement in 1984 and into a subsequent Energy Cooperation 
Agreement in 1996. The later agreement established cooperation 
and exchange of scientific and technical information in a wide 
range of areas including renewable energy, fossil energy, and 
electric transmission. In addition, research cooperation 
entities exist covering a wide array of topics, notably through 
the United States-Israel Binational Science Foundation 
(BSF),\1\ the United States-Israel Binational Industrial 
Research and Development Foundation (BIRD),\2\ and United 
States-Israel Science and Technology Foundation (USISTF).\3\
---------------------------------------------------------------------------
    \1\Founded in 1972, BSF is directed by a ten-person board (five 
American, and five Israeli) and operates out of Israel. BSF promotes 
US-Israeli scientific relations by awarding about $15 million annually 
in grants for American-Israeli research projects.
    \2\Established in 1977, BIRD's purpose is to ``stimulate, promote 
and support industrial R&D of mutual benefit to the U.S. and Israel.'' 
Specifically, BIRD (1) matches services between American and Israeli 
private sector companies that seek to use industrial R&D to create an 
innovative product, and (2) provides funding for ``up to 50 percent of 
project development and product commercialization costs.''
    \3\USISTF is a Washington, DC-based non-profit founded by the 
Department of Commerce and the Israeli Ministry of Industry, Trade and 
Labor to strengthen the US-Israeli ``scientific and R&D relationship'' 
through business collaboration. USISTF is the ``funding and 
administrative arm'' of the US-Israel Science and Technology 
Commission, which was established in 1994 to promote ``scientific, 
technological, and economic cooperation'' between the US and Israel.
---------------------------------------------------------------------------

Energy Independence and Security Act of 2007

    In December 2007, Congress passed the Energy Independence 
and Security Act of 2007 (EISA 2007). Section 917 of EISA 2007 
was included to further the energy cooperation of the two 
countries by establishing a U.S.-Israel energy cooperation 
partnership to support research, development, and deployment of 
energy efficiency and renewable energy measures. The provision 
included a grant program for joint ventures between United 
States and Israeli business and academic persons in the areas 
of research, development, demonstration, and commercialization 
of renewable energy and energy efficiency. Section 917 of EISA 
2007 has a statutory termination date that is 7 years after 
December 19, 2007, meaning the U.S.-Israel energy cooperation 
program will expire at the end of 2014 if it is not extended.

Fossil energy discoveries in Israel

    Since enactment of EISA 2007, significant new natural gas 
discoveries have been made in and around Israel. In 2009 and 
2010, substantial natural gas discoveries were made off the 
coast of Israel in the Tamar and Leviathan fields. The Tamar 
and Leviathan fields potentially have the capacity to support 
Israel's domestic gas consumption with reserves left for 
exports. The U.S. Geological Survey estimates that there are 
122 trillion cubic feet (TCF) of recoverable gas in the region, 
most of it in Israeli waters.\4\ In March 2012, another 
offshore discovery was made northwest of Tel Aviv, with an 
estimated 1.8 TCF of natural gas.\5\ In total, Israel's known 
offshore natural gas reserves are estimated around 30 trillion 
cubic feet. However, according to the U.S. International Trade 
Administration, ``because Israel does not yet have the physical 
infrastructure and technical workforce to support this fast 
growing industry, local companies are eager to team up with 
U.S. companies.''\6\
---------------------------------------------------------------------------
    \4\U.S. Geological Survey, ``Assessment of Undiscovered Oil and Gas 
Resources of the Levant Basin Province,'' available at http://
pubs.usgs.gov/fs/2010/3014/pdf/FS10-3014.pdf.
    \5\Globes Israel Business News, ``Oil and Gas Found at Gabriella, 
Yitzhak Licenses'' (Mar. 13, 2012), available at http://
www.globes.co.il/serveen/globes/docview.asp?did=1000732741.
    \6\U.S. International Trade Administration, ``Mission Statement Oil 
and Gas Trade Mission to Israel,'' available at http://export.gov/
trademissions/israel2012/eg_main_048039.asp#P11_3522.
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Need for legislation

    Recognizing that the United States and Israel are 
international partners, and that energy is essential to the 
economic and national security of both nations, continued 
cooperation on a broader range of energy-related issues is in 
the long term interests of both the United States and Israel. 
Indeed, the United States and Israel have cooperated in the 
past on energy projects benefiting both nations. Israeli 
scientists have undertaken research into alternative and 
renewable energy resources, and as described herein, 
significant new natural gas resources in and around Israel have 
been discovered.
    The U.S. government and U.S. businesses have significant 
expertise and experience in the responsible development of 
onshore and offshore gas resources, including the development 
and utilization of deep water gas technologies, hydraulic 
fracturing and horizontal drilling technologies. Thus, it 
benefits both countries to extend and expand the existing U.S.-
Israel energy partnership provided under Section 917 of EISA 
2007 to include natural gas technologies and environmental 
protection and restoration. H.R. 3683 provides the framework to 
ensure continued cooperation between the United States and 
Israel in these critical areas, as well as those areas 
originally contemplated under Section 917 of EISA 2007.

                                Hearings

    The Committee on Energy and Commerce has not held hearings 
on the legislation.

                        Committee Consideration

    On December 10 and 11, 2013, the Committee on Energy and 
Commerce met in open markup session and ordered H.R. 3683 
favorably reported to the House, without amendment, by a voice 
vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. 
There were no record votes taken in connection with ordering 
H.R. 3683 reported. A motion by Mr. Upton to order H.R. 3683 
reported to the House, without amendment, was agreed to by a 
voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee made findings that are 
reflected in this report.

         Statement of General Performance Goals and Objectives

    H.R. 3683 provides for greater cooperation between the 
United States and Israel on energy related activities.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
3683 would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

       Earmark, Limited Tax Benefits, and Limited Tariff Benefits

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI 
of the Rules of the House of Representatives, the Committee 
finds that H.R. 3683 contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, January 16, 2014.
Hon. Fred Upton, 
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3683, a bill to 
amend the Energy Independence and Security Act of 2007 to 
improve United States-Israel energy cooperation, and for other 
purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Megan 
Carroll.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 3683--A bill to amend the Energy Independence and Security Act of 
        2007 to improve United States-Israel energy cooperation, and 
        for other purposes

    Summary: H.R. 3683 would reauthorize a grant program, 
administered by the Department of Energy (DOE), which supports 
joint ventures between U.S. and Israeli entities aimed at 
promoting certain energy-related technologies. CBO estimates 
that implementing H.R. 3683 would cost $10 million over the 
2015-2019 period, assuming appropriation of the necessary 
amounts. Because enacting the legislation could affect net 
direct spending, pay-as-you-go procedures apply; however, CBO 
estimates that any such effects would be negligible. H.R. 3683 
would not affect revenues.
    H.R. 3683 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 3683 is shown in the following table. 
The costs of this legislation fall within budget function 270 
(energy).

----------------------------------------------------------------------------------------------------------------
                                                              By fiscal year, in millions of dollars--
                                                  --------------------------------------------------------------
                                                                                                          2014-
                                                     2014     2015     2016     2017     2018     2019     2019
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                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level....................        0        2        2        2        2        2       10
Estimated Outlays................................        0        2        2        2        2        2       10
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that H.R. 
3683 will be enacted in fiscal year 2014. CBO estimates that 
implementing H.R. 3683 would cost $10 million over the 2015-
2019 period. We also estimate that enacting the bill would 
increase both offsetting receipts and direct spending, but that 
any net changes in direct spending would be negligible.

Spending subject to appropriation

    H.R. 3683 would extend and modify a provision of the Energy 
Independence and Security Act of 2007 that authorizes DOE to 
make grants to support joint ventures between U.S. and Israeli 
government units, businesses, academic institutions, or 
nonprofit entities to promote certain energy-related 
technologies. Current law authorizes DOE to provide such 
grants, through 2014, for projects related to energy-efficient 
and renewable technologies. H.R. 3683 would extend DOE's 
authority to make such grants through 2024 and also expand the 
types of eligible projects to include those that utilize 
natural gas technologies and projects aimed at improving the 
energy efficiency of certain water treatment technologies. The 
bill also would authorize DOE to establish a joint United 
States-Israel Center to support additional energy-related 
collaboration between the two countries.
    According to DOE, appropriations for financial assistance 
to support energy-related collaboration between the U.S. and 
Israel have averaged about $1.5 million annually over the past 
five years. CBO estimates that, under H.R. 3683, DOE would 
spend slightly more--about $2 million annually--to continue 
assistance for projects using energy-efficient and renewable 
technologies, provide additional assistance for projects 
utilizing technologies that would become newly eligible for 
grants under the bill, and established the proposed center to 
support further collaboration between the United States and 
Israel.

Direct spending

    By extending DOE's authority to provide grants to support 
U.S.-Israeli energy collaboration, the legislation would also 
extend the agency's authority to accept donations and spend 
those amounts, without further appropriation, for activities 
authorized by the bill. Based on information from DOE, CBO 
estimates that any such donations would be well below $500,000 
in any year, and that any resulting net changes in direct 
spending would be negligible.
    Intergovernmental and private-sector impact: H.R. 3683 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Megan Carroll; Impact 
on state, local, and tribal governments: J'nell L. Blanco; 
Impact on the private sector: Amy Petz.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                    Duplication of Federal Programs

    No provision of H.R. 3683 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that enacting H.R. 3683 
specifically directs no rule makings within the meaning of 5 
U.S.C. 551 to be completed.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation

Section 1. United States-Israel energy cooperation

    Subsection (a) amends EISA to add findings regarding 
cooperation between the United States and Israel on energy 
related matters.
    Subsections (b), (c), and (d) amend the EISA section 917 
grant program to include natural gas and improvement of energy 
efficiency and the overall performance of water desalination, 
wastewater treatment and reclamation, and other water treatment 
technologies.
    Subsection (e) permits the Secretary to enter into energy 
related cooperative agreements supporting and enhancing 
dialogue and planning involving international partnerships 
between the Department and the Government of Israel and its 
ministries, offices, and institutions. The subsection also 
permits the Secretary to establish a joint United States-Israel 
Center to further dialog and collaboration to develop energy 
efficiency, existing energy development programs, and more 
robust academic cooperation in energy innovation technology and 
engineering, water science, technology transfer, and analysis 
of geopolitical implications of new natural resource 
development and associated areas.
    Subsection (f) provides that the EISA section 917 grant 
program shall terminate on September 30, 2024.

Section 2. United States-Israel Energy Cooperation Working Group

    Subsection (a) is a sense of Congress related to 
cooperation between the United States and Israel on energy 
security issues.
    Subsection (b) directs the Secretary of Energy and the 
Secretary of State to seek to establish an Energy Cooperation 
Working Group within the semi-annual United States-Israel 
Strategic Dialogue.
    Subsection (c) provides that the purpose of the Energy 
Cooperation Working Group is to strengthen dialogue between the 
United States and Israel on a range of energy issues.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

ENERGY INDEPENDENCE AND SECURITY ACT OF 2007

           *       *       *       *       *       *       *

TITLE IX--INTERNATIONAL ENERGY PROGRAMS

           *       *       *       *       *       *       *

     Subtitle A--Assistance to Promote Clean and Efficient Energy 
Technologies in Foreign Countries

           *       *       *       *       *       *       *

SEC. 917. UNITED STATES-ISRAEL ENERGY COOPERATION.

  (a) Findings.--Congress finds that--
          (1) it is in the highest national security interests 
        of the United States to develop [renewable] covered 
        energy sources;

           *       *       *       *       *       *       *

          (4) those programs have made [possible many] 
        possible--
                  (A) many scientific, technological, and 
                commercial breakthroughs in the fields of life 
                sciences, medicine, bioengineering, 
                agriculture, biotechnology, communications, and 
                others; and
                  (B) significant contributions to the 
                development of renewable energy and energy 
                efficiency through the established programs of 
                the United States-Israel Binational Industrial 
                Research and Development Foundation and the 
                United States-Israel Binational Science 
                Foundation;

           *       *       *       *       *       *       *

          (6) Israeli scientists and engineers are at the 
        forefront of research and development in the field of 
        [renewable] covered energy sources; [and]
          (7) enhanced cooperation between the United States 
        and Israel for the purpose of research and development 
        of [renewable] covered energy sources would be in the 
        national interests of both countries[.];
          (8) United States-Israel energy cooperation, and the 
        development of natural resources by Israel, are 
        strategic interests of the United States;
          (9) Israel is a strategic partner of the United 
        States in water technology;
          (10) the United States can play a role in assisting 
        Israel with regional safety and security issues;
          (11) the National Science Foundation of the United 
        States should collaborate with the Israel Science 
        Foundation;
          (12) the United States and Israel should strive to 
        develop more robust academic cooperation in energy 
        innovation technology and engineering, water science, 
        technology transfer, and analysis of geopolitical 
        implications of new natural resource development and 
        associated areas;
          (13) the United States supports the goals of the 
        Alternative Fuels Administration of Israel;
          (14) the United States strongly urges open dialogue 
        and continued mechanisms for regular engagement and 
        encourages further cooperation between applicable 
        departments, agencies, ministries, institutions of 
        higher education, and the private sectors of the United 
        States and Israel on energy security issues, 
        including--
                  (A) identifying policy priorities associated 
                with the development of natural resources of 
                Israel;
                  (B) discussing best practices to secure cyber 
                energy infrastructure;
                  (C) best practice sharing;
                  (D) leveraging natural gas to positively 
                impact regional stability;
                  (E) improving energy efficiency and the 
                overall performance of water desalination, 
                wastewater treatment and reclamation, and other 
                water treatment technologies;
                  (F) technical and environmental management of 
                deep-water exploration and production;
                  (G) coastal protection and restoration;
                  (H) academic outreach and engagement;
                  (I) private sector and business development 
                engagement;
                  (J) regulatory consultations;
                  (K) leveraging alternative transportation 
                fuels and technologies; and
                  (L) any other areas determined appropriate by 
                the United States and Israel;
          (15) the United States acknowledges the achievements 
        and importance of the United States-Israel Binational 
        Industrial Research and Development Foundation and the 
        United States-Israel Binational Science Foundation and 
        supports continued multiyear funding to ensure the 
        continuity of the programs of the Foundations; and
          (16) the United States and Israel have a shared 
        interest in addressing their immediate, near-term, and 
        long-term energy and environmental challenges.
  (b) Grant Program.--
          (1) Establishment.--In implementing the agreement 
        entitled the ``Agreement between the Department of 
        Energy of the United States of America and the Ministry 
        of Energy and Infrastructure of Israel Concerning 
        Energy Cooperation'', dated February 1, 1996, the 
        Secretary shall establish a grant program in accordance 
        with the requirements of sections 988 and 989 of the 
        Energy Policy Act of 2005 (42 U.S.C. 16352, 16353) [to 
        support research, development, and commercialization of 
        renewable energy or energy efficiency] to support 
        energy efficiency, established energy development 
        programs, and research, development, and 
        commercialization of covered energy.
          (2) [Types of] Covered energy.--In carrying out 
        paragraph (1), the Secretary may make grants to 
        promote--
                  (A) * * *

           *       *       *       *       *       *       *

                  (F) wave and tidal energy; [and]
                  (G) advanced battery technology[.];
                  (H) natural gas energy, including 
                conventional and unconventional natural gas 
                technologies and natural gas projects conducted 
                by or in conjunction with the United States-
                Israel Binational Science Foundation, the 
                United States-Israel Binational Industrial 
                Research and Development Foundation, and the 
                United States-Israel Science and Technology 
                Foundation; and
                  (I) improvement of energy efficiency and the 
                overall performance of water desalination, 
                wastewater treatment and reclamation, and other 
                water treatment technologies.
          (3) Eligible applicants.--An applicant shall be 
        eligible to receive a grant under this subsection if 
        the project of the applicant--
                  (A) addresses a requirement in the area of 
                improved [energy efficiency or renewable] 
                covered energy sources, as determined by the 
                Secretary; and

           *       *       *       *       *       *       *

  (c) International Partnerships.--
          (1) In general.--The Secretary may, subject to the 
        availability of appropriations, enter into cooperative 
        agreements supporting and enhancing dialogue and 
        planning involving international partnerships between 
        the Department and the Government of Israel and its 
        ministries, offices, and institutions. The cooperative 
        agreements shall include energy activities in addition 
        to those involving research and development, and shall 
        ensure that the shared technologies and other benefits 
        of energy cooperation promote the domestic energy 
        production of both nations.
          (2) Federal share.--The Secretary may not pay more 
        than 50 percent of the costs described in paragraph 
        (1).
          (3) Annual reports.--The Secretary shall submit to 
        the Committee on Energy and Commerce of the House of 
        Representatives and the Committee on Energy and Natural 
        Resources of the Senate an annual report that 
        describes--
                  (A) actions taken to carry out this 
                subsection; and
                  (B) any projects under this subsection for 
                which the Secretary requests funding.
  (d) United States-Israel Center.--The Secretary may establish 
a joint United States-Israel Center based in an area of the 
United States with the experience, knowledge, and expertise in 
offshore energy development to further dialogue and 
collaboration to develop energy efficiency, existing energy 
development programs, and more robust academic cooperation in 
energy innovation technology and engineering, water science, 
technology transfer, and analysis of geopolitical implications 
of new natural resource development and associated areas.
  [(c)] (e) Termination.--The grant program and the advisory 
committee established under this section terminate on [the date 
that is 7 years after the date of enactment of this Act] 
September 30, 2024.
  [(d) Authorization of Appropriations.--The Secretary shall 
use amounts authorized to be appropriated under section 931 of 
the Energy Policy Act of 2005 (42 U.S.C. 16231) to carry out 
this section.]

           *       *       *       *       *       *       *

                                  
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