II

104TH CONGRESS

1ST SESSION S. 186

To amend the Energy Policy and Conservation Act with respect to purchases

from the Strategic Petroleum Reserve by entities in the insular areas

of the United States, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JANUARY 10, 1995

Mr. AKAKA introduced the following bill; which was read twice and referred

to the Committee on Energy and Natural Resources

A BILL

To amend the Energy Policy and Conservation Act with

respect to purchases from the Strategic Petroleum Reserve by entities in the insular areas of the United

States, 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. SHORT TITLE.

4 This Act may be cited as the ‘‘Emergency Petroleum

5 Supply Act’’.
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1 SEC. 2. PURCHASES FROM THE STRATEGIC PETROLEUM

2 RESERVE BY ENTITIES IN THE INSULAR

3 AREAS OF THE UNITED STATES.

4 (a) GENERAL PROVISIONS.—Section 161 of the En5 ergy Policy and Conservation Act (42 U.S.C. 6241) is

6 amended by adding at the end the following new sub7 section:

8 ‘‘(j)(1) With respect to each offering of a quantity

9 of petroleum product during a drawdown of the Strategic

10 Petroleum Reserve:

11 ‘‘(A) the State of Hawaii, in addition to having

12 the opportunity to submit a competitive bid, may—

13 ‘‘(i) submit a binding offer, and shall on

14 submission of the offer, be entitled to purchase

15 a category of petroleum product specified in a

16 notice of sale at a price equal to the

17 volumetrically weighted average of the success18 ful bids made for the remaining quantity of pe19 troleum product within the category that is the

20 subject of the offering; and

21 ‘‘(ii) submit one or more alternative offers,

22 for other categories of petroleum product, that

23 will be binding in the event that no price com24 petitive contract is awarded for the category of

25 petroleum product on which a binding offer is

26 submitted under clause (i); and
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1 ‘‘(B) at the request of the Governor of the

2 State of Hawaii, petroleum product purchased by

3 the State of Hawaii at a competitive sale or through

4 a binding offer shall have first preference in schedul5 ing for lifting.

6 ‘‘(2)(A) In administering this subsection, and with re7 spect to each offering, the Secretary may impose the limi8 tation described in subparagraph (B) or (C) that results

9 in the purchase of the lesser quantity of petroleum

10 product.

11 ‘‘(B) The Secretary may limit the quantity of petro12 leum product that the State of Hawaii may purchase

13 through a binding offer at any one offering to one-twelfth

14 of the total quantity of imports of petroleum product

15 brought into the State during the previous year (or other

16 period determined by the Secretary to be representative).

17 ‘‘(C) The Secretary may limit the quantity that may

18 be purchased through binding offers at any one offering

19 to 3 percent of the offering.

20 ‘‘(3) Notwithstanding any limitation imposed under

21 paragraph (2), in administering this subsection, and with

22 respect to each offering, the Secretary shall, at the request

23 of the Governor of the State of Hawaii, or an eligible en24 tity certified under paragraph (6), adjust the quantity to

25 be sold to the State of Hawaii as follows:
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1 ‘‘(A) The Secretary shall adjust upward to the

2 next whole number increment of a full tanker load

3 if the quantity to be sold is—

4 ‘‘(i) less than one full tanker load; or

5 ‘‘(ii) greater than or equal to 50 percent of

6 a full tanker load more than a whole number

7 increment of a full tanker load.

8 ‘‘(B) The Secretary shall adjust downward to

9 the next whole number increment of a full tanker

10 load if the quantity to be sold is less than 50 percent

11 of a full tanker load more than a whole number in12 crement of a full tanker load.

13 ‘‘(4) The State of Hawaii may enter into an exchange

14 or a processing agreement that requires delivery to other

15 locations, so long as petroleum product of similar value

16 or quantity is delivered to the State of Hawaii.

17 ‘‘(5) Except as otherwise provided in this Act, the

18 Secretary may require the State of Hawaii to comply with

19 the standard sales provisions applicable to purchasers of

20 petroleum product at competitive sales.

21 ‘‘(6)(A) Notwithstanding the foregoing, and subject

22 to subparagraphs (B) and (C), if the Governor of the State

23 of Hawaii certifies to the Secretary that the State has en24 tered into an agreement with an eligible entity to effec25 tuate the purposes of this Act, such eligible entity may
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1 act on behalf of the State of Hawaii for purposes of this

2 subsection.

3 ‘‘(B) The Governor of the State of Hawaii shall not

4 certify more than one eligible entity under this paragraph

5 for each notice of sale.

6 ‘‘(C) If the Secretary has notified the Governor of

7 the State of Hawaii that a company has been barred from

8 bidding (either prior to, or at the time that a notice of

9 sale is issued), the Governor shall not certify such com10 pany under the paragraph.

11 ‘‘(7) As used in this subsection—

12 ‘‘(A) the term ‘binding offer’ means a bid sub13 mitted by the State of Hawaii for an assured award

14 of a specific quantity of petroleum product, with a

15 price to be calculated pursuant to this Act, that obli16 gates the offeror to take title to the petroleum prod17 uct without further negotiation or recourse to with18 draw the offer;

19 ‘‘(B) the term ‘category of petroleum product’

20 means a master line item within a notice of sale;

21 ‘‘(C) the term ‘eligible entity’ means an entity

22 that owns or controls a refinery that is located with23 in the State of Hawaii;

24 ‘‘(D) the term ‘full tanker load’ means a tanker

25 of approximately 700,000 barrels of capacity, or
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1 such lesser tanker capacity as may be designated by

2 the State of Hawaii;

3 ‘‘(E) the term ‘offering’’ means a solicitation

4 for bids for a quantity or quantities of petroleum

5 product from the Strategic Petroleum Reserve as

6 specified in the notice of sale; and

7 ‘‘(F) the term ‘notice of sale’ means the docu8 ment that announces—

9 ‘‘(i) the sale of Strategic Petroleum Re10 serve products;

11 ‘‘(ii) the quantity, characteristics, and loca12 tion of the petroleum product being sold;

13 ‘‘(iii) the delivery period for the sale; and

14 ‘‘(iv) the procedures for submitting of15 fers.’’.

16 (b) EFFECTIVE DATE.—The amendment made by

17 subsection (a) shall take effect on the date that is 180

18 days after the date of enactment of this Act or the date

19 that final regulations are promulgated pursuant to section

20 3, whichever is sooner.

21 SEC. 3. REGULATIONS.

22 (a) IN GENERAL.—The Secretary shall promulgate

23 such regulations as are necessary to carry out the amend24 ment made by section 2.
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1 (b) ADMINISTRATIVE PROCEDURE.—Regulations is2 sued to carry out this section, and the amendment made

3 by section 2, shall not be subject to—

4 (1) section 523 of the Energy Policy and Con5 servation Act (42 U.S.C. 6393); or

6 (2) section 501 of the Department of Energy

7 Organization Act (42 U.S.C. 7191).

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