Calendar No. 407

104TH CONGRESS

2D SESSION S. 1605

[Report No. 104–273]

A BILL

To amend the Energy Policy and Conservation Act

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

MAY 15, 1996

Reported with an amendment
II

Calendar No. 407

104TH CONGRESS

2D SESSION S. 1605

[Report No. 104–273]

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

MARCH 12, 1996

Mr. MURKOWSKI (by request) introduced the following bill; which was read

twice and referred to the Committee on Energy and Natural Resources

MAY 15, 1996

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 That this Act may be cited as the ‘‘Energy Policy and

4 Conservation Act Amendment Act’’.
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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 (1) 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 (2) by striking paragraphs (3) and (6).

8 SEC. 3. Title I of the Energy Policy and Conservation

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

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

11 (b) in section 105 (42 U.S.C. 6213)—

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

13 follows—

14 ‘‘(a) The Secretary of the Interior shall prohibit the

15 bidding for any right to develop crude oil, natural gas,

16 and natural gas liquids on any lands located on the Outer

17 Continental Shelf by any person if more than one major

18 oil company, more than one affiliate of a major oil com19 pany, or a major oil company and any affiliate of a major

20 oil company, has or have a significant ownership interest

21 in that person, when the Secretary determines prior to any

22 lease sale that this bidding would adversely affect competi23 tion or the receipt of fair market value’’; and

24 (2) by striking subsections (c) and (e);

25 (c) by striking section 106 (42 U.S.C. 6214);
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1 (d) in section 151 (42 U.S.C. 6231)—

2 (1) in subsection (a) by striking ‘‘limited’’

3 and ‘‘short-term’’; and

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

5 follows:

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

7 for the creation of a Strategic Petroleum Reserve for the

8 storage of up to 1 billion barrels of petroleum products

9 to reduce the impact of disruptions in supplies of petro10 leum products or to carry out obligations of the United

11 States under the international energy program.’’;

12 (e) in section 152 (42 U.S.C. 6232)—

13 (1) by striking paragraphs (1) and (7);

14 and

15 (2) in paragraph (11) by striking ‘‘, the

16 Early Storage Reserve, and the Regional Petro17 leum Reserve’’, and by adding a period after In18 dustrial Petroleum Reserve.

19 (f) by striking section 153 (42 U.S.C. 6233);

20 (g) in section 154 (42 U.S.C. 6234)—

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

22 follows:

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

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

25 created pursuant to this part.’’;
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1 (2) by amending subsection (b) to read as

2 follows:

3 ‘‘(b) The Secretary, acting through the Strategic Pe4 troleum Reserve Office and in accordance with this part,

5 shall exercise authority over the development, operation,

6 and maintenance of the Reserve’’; and

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

8 (e);

9 (h) by striking section 155 (42 U.S.C. 6235);

10 (i) in section 156(b) (42 U.S.C. 6236(b)), by

11 striking ‘‘To implement the Early Storage Reserve

12 Plan or the Strategic Petroleum Reserve Plan which

13 has taken effect pursuant to section 159(a), the’’

14 and inserting ‘‘The’’;

15 (j) by striking section 157 (42 U.S.C. 6237);

16 (k) by striking section 158 (42 U.S.C. 6238);

17 (l) by amending the heading for section 159 (42

18 U.S.C. 6239) to read: ‘‘Development, Operation, and

19 Maintenance of the Reserve’’;

20 (m) in section 159 (42 U.S.C. 6239)—

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

22 (d), and (e);

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

24 follows:
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1 ‘‘(f) In order to develop, operate, or maintain the

2 Strategic Petroleum Reserve, the Secretary may—

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

4 ‘‘(2) acquire by purchase, condemnation, or oth5 erwise, land or interests in land for the location of

6 storage and related facilities;

7 ‘‘(3) construct, purchase, lease, or otherwise ac8 quire storage and related facilities;

9 ‘‘(4) use, lease, maintain, sell, or otherwise dis10 pose of storage and related facilities acquired under

11 this part, under such terms and conditions as the

12 Secretary may deem necessary or appropriate;

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

14 160, by purchase, exchange, or otherwise, petroleum

15 products for storage in the Strategic Petroleum Re16 serve;

17 ‘‘(6) store petroleum products in storage facili18 ties owned and controlled by the United States or in

19 storage facilities owned by others if those facilities

20 are subject to audit by the United States;

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

22 operate, or maintain the Strategic Petroleum Re23 serve;

24 ‘‘(8) require an importer of petroleum products

25 or refiner to acquire and to store and maintain, in
6

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1 readily available inventories, petroleum products in

2 the Industrial Petroleum Reserve, under section 156;

3 ‘‘(9) require the storage of petroleum products

4 in the Industrial Petroleum Reserve, under section

5 156, on terms that the Secretary specifies, in stor6 age facilities owned and controlled by the United

7 States or in storage facilities other than those owned

8 by the United States if those facilities are subject to

9 audit by the United States;

10 ‘‘(10) require the maintenance of the Industrial

11 Petroleum Reserve;

12 ‘‘(11) bring an action, when the Secretary con13 siders it necessary; in any court having jurisdiction

14 over the proceedings, to acquire by condemnation

15 any real or personal property, including facilities,

16 temporary use of facilities; or other interests in land,

17 together with any personal property located on or

18 used with the land; and

19 ‘‘(12) to the extent provided in an Appropria20 tions Act, and notwithstanding section 649(b) of the

21 Department of Energy Organization Act (42 U.S.C.

22 7259(b)),the Secretary is authorized to store in

23 underutilized facilities, by lease or otherwise, petro24 leum product owned by a foreign government or its

25 representative, petroleum product stored under this
7

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1 paragraph is not part of the Reserve, is not subject

2 to part C of this title, and notwithstanding any pro3 vision of this Act, may be exported from the United

4 States.’’;

5 (3) in subsection (g)—

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

7 inserting ‘‘development’’; and

8 (B) by striking ‘‘Plan’’;

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

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

11 follows:

12 ‘‘(j) When the Secretary determines that a

13 750,000,000 barrel inventory can reasonably be expected

14 to be reached in the Reserve within 5 years, a plan for

15 expansion will be submitted to the Congress.’’; and

16 (6) by amending subsection (l) to read as fol17 lows:

18 ‘‘(l) During any period in which drawdown and dis19 tribution are being implemented, the Secretary may issue

20 rules, regulations, or orders to implement the drawdown

21 and distribution of the Strategic Petroleum Reserve in ac22 cordance with section 553 of title 5, United States Code,

23 without regard to rulemaking requirements in section 523

24 of this Act, and section 501 of the Department of Energy

25 Organization Act (42 U.S.C. 7191);
8

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1 (n) in section 160 (42 U.S.C. 6240)—

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

3 the dash and inserting the following—

4 ‘‘(a) To the extent funds are available under section

5 167(b)(2) and (3) and for the purposes of implementing

6 the Strategic Petroleum Reserve, the Secretary may ac7 quire, place in storage, transport, or exchange’’;

8 (2) in subsection (b), by striking ‘‘includ9 ing the Early Storage Reserve and the Regional

10 Petroleum Reserve’’ and paragraph (2); and

11 (3) by striking subsections (c), (d), (e),

12 and (g);

13 (o) in section 161 (42 U.S.C. 6241)—

14 (1) by striking subsections (b) and (c);

15 (2) by amending subsection (d)(1) to read

16 as follows:

17 ‘‘(d)(1) No drawdown and distribution of the Strate18 gic Petroleum Reserve may be made unless the President

19 has found drawdown and distribution is required by a se20 vere energy supply interruption or by obligations of the

21 United States under the international energy program.’’;

22 (3) by amending subsection (e) to read as

23 follows:

24 ‘‘(e)(1) The Secretary shall sell any petroleum prod25 uct withdrawn from the Strategic Petroleum Reserve at
9

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1 public sale to the highest qualified bidder in the amounts,

2 for the period, and after a notice of sale the Secretary

3 considers proper, and without regard to Federal, State,

4 or local regulations controlling sales of petroleum prod5 ucts.

6 ‘‘(2) The Secretary may cancel in whole or in part

7 any offer to sell petroleum products as part of any

8 drawdown and distribution under this section.’’; and

9 (4) in subsection (g)—

10 (A) in paragraph (1), by striking

11 ‘‘Distribution Plan’’ and inserting ‘‘dis12 tribution procedures’’;

13 (B) by striking paragraphs (2) and

14 (6); and

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

16 ‘‘90’’ and inserting ‘‘95’’;

17 (p) by striking section 164 (42 U.S.C. 6244);

18 (q) by amending section 165 (42 U.S.C. 6245)

19 to read as follows—

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

21 President and the Congress on actions taken to implement

22 this part. This report shall include—

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

24 Reserve and the type and quantity of petroleum in

25 the Reserve;
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1 ‘‘(2) an estimate of the schedule and cost to

2 complete planned equipment upgrade or capital in3 vestment in the Reserve, including those carried out

4 as part of operational maintenance or extension of

5 life activities;

6 ‘‘(3) an identification of any life-limiting condi7 tions or operational problems at any Reserve facility,

8 and proposed remedial actions including an estimate

9 of the schedule and cost of implementing such reme10 dial actions;

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

12 distribution rates and capabilities, and an identifica13 tion of any operational or other limitations on such

14 rates and capabilities;

15 ‘‘(5) an identification of purchases of petroleum

16 made in the preceding year and planned in the fol17 lowing year, including quantity, price, and type of

18 petroleum;

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

20 operate, and maintain the Reserve;

21 ‘‘(7) a summary of the financial status and fi22 nancial transactions of the Strategic Petroleum Re23 serve and Strategic Petroleum Reserve Petroleum

24 Accounts for the year;
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1 ‘‘(8) a summary of expenses for the year, and

2 the number of Federal and contractor employees;

3 ‘‘(9) the status of contracts for development,

4 operation, maintenance, distribution, and other ac5 tivities related to the implementation of this part;

6 and

7 ‘‘(10) any recommendations for supplemental

8 legislation or policy or operational changes the Sec9 retary considers necessary and appropriate to imple10 ment this part.’’;

11 (r) in section 166 (42 U.S.C. 6246) by striking

12 all after ‘‘appropriated’’ and inserting ‘‘the funds

13 necessary to implement this part.’’;

14 (s) in section 167 (42 U.S.C. 6247) subsection

15 (b)—

16 (A) by inserting ‘‘for test sales of pe17 troleum products from the Reserve,’’ after

18 ‘‘Strategic Petroleum Reserve,’’, and by in19 serting ‘‘for’’ before ‘‘the drawdown’’;

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

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

22 ‘‘after fiscal year 1982’’;

23 (t) in section 171 (42 U.S.C. 6249) by amend24 ing subparagraph (b)(2)(B) to 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 product proposed to be stored, in

7 the Reserve, and an estimate of the proposed

8 benefits;’’;

9 (u) in section 172 (42 U.S.C. 6249a), by strik10 ing subsections (a) and (b);

11 (v) by striking section 173 (42 U.S.C. 6249b);

12 and

13 (w) in section 181 (42 U.S.C. 6251), by strik14 ing ‘‘June 30, 1996’’ each time it appears and in15 serting ‘‘September 30, 2001’’.

16 SEC. 4. Title II of the Energy Policy and Conserva17 tion Act (42 U.S.C. 6211–6251) is amended—

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

19 6264);

20 (b) by striking ‘‘section 252(l)(1)’’ in section

21 251(e)(1) (42 U.S.C. 6271(e)(1)) and inserting

22 ‘‘section 252(k)(1)’’;

23 (c) in section 252 (42 U.S.C. 6272)—

24 (1) in subsections (a)(1) and (b), by strik25 ing ‘‘allocation and information provisions of
13

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1 the international energy program’’ and insert2 ing ‘‘international emergency response provi3 sions’’;

4 (2) in subsection (d)(3), by striking

5 ‘‘known’’ and inserting after ‘‘circumstances’’

6 ‘‘known at the time of approval’’;

7 (3) in subsection (e)(2) by striking ‘‘shall’’

8 and inserting ‘‘may’’;

9 (4) in subsection (f)(2) by inserting ‘‘vol10 untary agreement or’’ after ‘‘approved’’;

11 (5) by amending subsection (h) to read as

12 follows:

13 ‘‘(h) Section 708 of the Defense Production Act of

14 1950 shall not apply to any agreement or action under15 taken for the purpose of developing or carrying out—

16 ‘‘(1) the international energy program, or

17 ‘‘(2) any allocation, price control, or similar

18 program with respect to petroleum products under

19 this Act.’’;

20 (6) in subsection (i) by inserting ‘‘annu21 ally, or’’ after ‘‘least’’ and by inserting ‘‘during

22 an international energy supply emergency’’

23 after ‘‘months’’;

24 (7) in subsection (k) by amending para25 graph (2) to read as follows:
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1 ‘‘(2) The term ‘international emergency re2 sponse provisions’ means—

3 ‘‘(A) the provisions of the international en4 ergy program which relate to international allo5 cation of petroleum products and to the infor6 mation system provided in the program; and

7 ‘‘(B) the emergency response measures

8 adopted by the Governing Board of the Inter9 national Energy Agency (including the July 11,

10 1984, decision by the Governing Board on

11 ‘Stocks and Supply Disruptions’) for—

12 ‘‘(i) the coordinated drawdown of

13 stocks of petroleum products held or con14 trolled by governments; and

15 ‘‘(ii) complementary actions taken by

16 governments during an existing or impend17 ing international oil supply disruption’’;

18 and

19 (8) by amending subsection (l) to read as

20 follows:

21 ‘‘(l) The antitrust defense under subsection (f) shall

22 not extend to the international allocation of petroleum

23 products unless allocation is required by chapters III and

24 IV of the international energy program during an inter25 national energy supply emergency.’’;
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1 (d) by adding at the end of section 256(h),

2 ‘‘There are authorized to be appropriated for fiscal

3 years 1996 through 2001, such sums as may be nec4 essary.’’;

5 (e) by striking Part C (42 U.S.C. 271 through

6 272); and

7 (f) in section 281 (42 U.S.C. 6285), by striking

8 ‘‘June 30, 1996’’ each time it appears and inserting

9 ‘‘September 30, 2001’’.

10 SEC. 5. (a) Title III of the Energy Policy and Con11 servation Act (42 U.S.C. 6291–6327, 6361–6374d) is

12 amended—

13 (1) in section 365(f) (42 U.S.C. 6325(f)) by

14 amending paragraph (1) to read as follows:

15 ‘‘(1) Except as provided in paragraph (2), for

16 the purpose of carrying out this part, there are au17 thorized to be appropriated $24,650 million for fis18 cal year 1996 and for fiscal years 1997 through

19 2001, such sums as may be necessary.’’; and

20 (2) section 397 (42 U.S.C. 6371f) is amended

21 to read as follows: ‘‘For the purpose of carrying out

22 this part, there are authorized $26,849 million to be

23 appropriated for fiscal year 1996 and for fiscal years

24 1997 through 2001, such sums as may be nec25 essary.’’.
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1 (b) In section 400BB(b) (42 U.S.C. 6374a(b)) by

2 amending paragraph (1) to read as follows:

3 ‘‘(1) There are authorized to be appropriated to

4 the Secretary for carrying out this section such sums

5 as may be necessary for fiscal years 1996 through

6 2001, to remain available until expended.’’.

7 SEC. 6. Title V of the Energy Policy and Conserva8 tion Act (42 U.S.C. 6381–6422) is amended—

9 (1) by striking section 507 (42 U.S.C. 6385);

10 and

11 (2) by striking section 522 (42 U.S.C. 6392).

12 That this Act may be cited as the ‘‘Energy Policy and Con13 servation Act Amendment Act’’.

14 SEC. 2. Section 2 of the Energy Policy and Conserva15 tion Act (42 U.S.C. 6201) is amended—

16 (1) in paragraph (1) by striking ‘‘standby’’ and

17 ‘‘, subject to congressional review, to impose ration18 ing, to reduce demand for energy through the imple19 mentation of energy conservation plans, and’’; and

20 (2) by striking paragraph (3).

21 SEC. 3. Title I of the Energy Policy and Conservation

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

23 (a) in section 105 (42 U.S.C. 6213)—

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

25 follows—
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1 ‘‘(a) The Secretary of the Interior shall permit the bid2 ding for any right to develop crude oil, natural gas, and

3 natural gas liquids on any lands located on the Outer Con4 tinental Shelf by a person, when more than one major oil

5 company, more than one affiliate of a major oil company,

6 or a major oil company and any affiliate of a major oil

7 company, has or have a significant ownership interest in

8 that person, unless the Secretary determines prior to any

9 lease sale that this bidding would adversely affect competi10 tion or the receipt of fair market value.’’; and

11 (2) by striking subsections (c) and (e);

12 (b) by striking section 106 (42 U.S.C. 6214);

13 (c) in section 151 (42 U.S.C. 6231)—

14 (1) in subsection (a) by striking ‘‘limited’’

15 and ‘‘short-term’’; and

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

17 follows:

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

19 for the creation of a Strategic Petroleum Reserve for the

20 storage of up to 1 billion barrels of petroleum products to

21 reduce the impact of disruptions in supplies of petroleum

22 products or to carry out obligations of the United States

23 under the international energy program.’’;

24 (d) in section 152 (42 U.S.C. 6232)—

25 (1) by striking paragraphs (1) and (7), and
18

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1 (2) in paragraph (11) by striking ‘‘, the

2 Early Storage Reserve, and the Regional Petro3 leum Reserve’’;

4 (e) by striking section 153 (42 U.S.C. 6233);

5 (f) in section 154 (42 U.S.C. 6234)—

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

7 follows:

8 ‘‘(a) A Strategic Petroleum Reserve for the storage of

9 up to 1 billion barrels of petroleum products shall be created

10 pursuant to this part.’’;

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

12 follows:

13 ‘‘(b) The Secretary, acting through the Strategic Petro14 leum Reserve Office and in accordance with this part, shall

15 exercise authority over the development, operation, and

16 maintenance of the Reserve.’’;

17 (3) by amending (c) to read as follows:

18 ‘‘(c) The Secretary shall prepare a statement of policy

19 on Strategic Petroleum Reserve development, maintenance

20 and drawdown. The statement of policy shall evaluate the

21 effect of sales of petroleum from the Strategic Petroleum Re22 serve under authorities other than those provided by this

23 Act on the ability of the United States to fulfill its obliga24 tions under the international energy program. The state25 ment of policy shall evaluate the effectiveness of the Strate-
19

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1 gic Petroleum Reserve at reducing the impact of severe en2 ergy supply interruptions, in light of existing quantities of

3 petroleum in the Strategic Petroleum Reserve, and the like4 lihood of purchases of additional petroleum for storage. The

5 statement of policy shall set forth alternative strategies for

6 drawdown and the criteria to be employed at the time of

7 drawdown to select among such strategies. The statement

8 of policy shall be published in the Federal Register and be

9 subject to public comment, and may be prepared without

10 regard to the requirements of section 553 of title 5, United

11 States Code, section 501 of the Department of Energy Orga12 nization Act (42 U.S.C. 7191), and section 523 of this

13 Act.’’; and

14 (4) by striking subsections (d), and (e);

15 (g) by striking section 155 (42 U.S.C. 6235);

16 (h) in section 156(b) (42 U.S.C. 6236(b)), by

17 striking ‘‘To implement the Early Storage Reserve

18 Plan or the Strategic Petroleum Reserve Plan which

19 has taken effect pursuant to section 159(a), the’’ and

20 inserting ‘‘The’’;

21 (i) by striking section 157 (42 U.S.C. 6237);

22 (j) by striking section 158 (42 U.S.C. 6238);

23 (k) by amending the heading for section 159 (42

24 U.S.C. 6239) to read, ‘‘Development, Operation, and

25 Maintenance of the Reserve’’;
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1 (l) in section 159 (42 U.S.C. 6239)—

2 (1) by striking subsections (a), (b), (c), (d),

3 and (e);

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

5 follows:

6 ‘‘(f) In order to develop, operate, or maintain the Stra7 tegic Petroleum Reserve, the Secretary may:

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

9 ‘‘(2) acquire by purchase, condemnation, or oth10 erwise, land or interests in land for the location of

11 storage and related facilities;

12 ‘‘(3) construct, purchase, lease, or otherwise ac13 quire storage and related facilities;

14 ‘‘(4) use, lease, maintain, sell, or otherwise dis15 pose of storage and related facilities acquired under

16 this part, under such terms and conditions as the Sec17 retary may deem necessary or appropriate;

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

19 160, by purchase, exchange, or otherwise, petroleum

20 products for storage in the Strategic Petroleum Re21 serve;

22 ‘‘(6) store petroleum products in storage facilities

23 owned and controlled by the United States or in stor24 age facilities owned by others if those facilities are

25 subject to audit by the United States;
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1 ‘‘(7) execute any contracts necessary to develop,

2 operate, or maintain the Strategic Petroleum Reserve;

3 ‘‘(8) require an importer of petroleum products

4 or refiner to acquire and to store and maintain, in

5 readily available inventories, petroleum products in

6 the Industrial Petroleum Reserve, under section 156;

7 ‘‘(9) require the storage of petroleum products in

8 the Industrial Petroleum Reserve, under section 156,

9 on terms that the Secretary specifies, in storage facili10 ties owned and controlled by the United States or in

11 storage facilities other than those owned by the United

12 States is those facilities are subject to audit by the

13 United States;

14 ‘‘(10) require the maintenance of the Industrial

15 Petroleum Reserve;

16 ‘‘(11) bring an action, when the Secretary con17 siders it necessary, in any court having jurisdiction

18 over the proceedings, to acquire by condemnation any

19 real or personal property, including facilities, tem20 porary use of facilities, or other interests in land, to21 gether with any personal property located on or used

22 with the land; and

23 ‘‘(12) to the extent provided in an Appropria24 tions Act, and not withstanding section 649(b) of the

25 Department of Energy Organization Act (42 U.S.C.
22

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1 7259(b)), the Secretary is authorized to store in

2 underutilized SPR facilities, by lease or otherwise, pe3 troleum product owned by a foreign government or its

4 representative; petroleum product stored under this

5 paragraph is not part of the Reserve, is not subject

6 to part C of this title, and notwithstanding any pro7 vision of this Act, may be exported from the United

8 States.’’;

9 (3) in subsection (g)—

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

11 inserting ‘‘development’’; and

12 (B) by striking ‘‘Plan’’;

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

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

15 follows:

16 ‘‘(j) When the Secretary determines that a 680,000,000

17 barrel inventory can reasonably be expected to be reached

18 in the Reserve within 5 years, a plan for expansion will

19 be submitted to the Congress.’’; and

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

21 follows:

22 ‘‘(l) During any period in which drawdown and dis23 tribution are being implemented, the Secretary may issue

24 rules, regulations, or orders to implement the drawdown

25 and distribution of the Strategic Petroleum Reserve in ac-
23

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1 cordance with section 523 of this Act, without regard to

2 rulemaking requirements in section 553 of title 5, United

3 States Code, and section 501 of the Department of Energy

4 Organization Act (42 U.S.C. 7191),’’;

5 (m) in section 160 (42 U.S.C. 6240)—

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

7 the dash and inserting the following—

8 ‘‘(a) To the extent funds are available under section

9 167(b)(2) and (3) and for the purposes of implementing the

10 Strategic Petroleum Reserve, the Secretary may acquire,

11 place in storage, transport, or exchange’’;

12 (2) in subsection (b), by striking ‘‘including

13 the Early Storage Reserve and the Regional Pe14 troleum Reserve’’ and paragraph (2); and

15 (3) by striking subsections (c), (d), (e), and

16 (g);

17 (n) in section 161 (42 U.S.C. 6241)—

18 (1) by striking subsections (b) and (c);

19 (2) by amending subsection (d)(1) to read

20 as follows:

21 ‘‘(d)(1) No drawdown and distribution of the Strategic

22 Petroleum Reserve may be made unless the President has

23 found drawdown and distribution is required by a severe

24 energy supply interruption or by obligations of the United

25 States under the international energy program.’’;
24

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

2 follows:

3 ‘‘(e)(1) The Secretary shall sell any petroleum product

4 withdrawn from the Strategic Petroleum Reserve at public

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

6 period, and after a notice of sale the Secretary considers

7 proper, and without regard to Federal, State, or local regu8 lations controlling sales of petroleum products.

9 ‘‘(2) The Secretary may cancel in whole or in part

10 any offer to sell petroleum products as part of any

11 drawdown and distribution under this Section.’’; and

12 (4) in subsection (g)—

13 (A) in paragraph (l), by striking ‘‘Dis14 tribution Plan’’ and inserting ‘‘distribution

15 procedures’’;

16 (B) by striking paragraphs (2) and

17 (6); and

18 (C) in paragraph (4), by striking ‘‘90’’

19 in inserting ‘‘95’’;

20 (o) by striking section 164 (42 U.S.C. 6244);

21 (p) by amending section 165 (42 U.S.C. 6245) to

22 read as follows—

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

24 President and the Congress on actions taken to implement

25 this part. This report shall include—
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1 ‘‘(1) the status of the physical capacity of the Re2 serve and the type and quantity of petroleum in the

3 Reserve;

4 ‘‘(2) an estimate of the schedule and cost to com5 plete planned equipment upgrade or capital invest6 ment in the Reserve, including those carried out as

7 part of operational maintenance or extension of life

8 activities;

9 ‘‘(3) an identification of any life-limiting condi10 tions or operational problems at any Reserve facility,

11 and proposed remedial actions including an estimate

12 of the schedule and cost of implementing such reme13 dial actions;

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

15 distribution rates and capabilities, and an identifica16 tion of any operational or other limitations on such

17 rates and capabilities;

18 ‘‘(5) an identification of purchases of petroleum

19 made in the preceding year and planned in the fol20 lowing year, including quantity, price, and type of

21 petroleum;

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

23 operate, and maintain the Reserve;

24 ‘‘(7) a summary of the financial status and fi25 nancial transactions of the Strategic Petroleum Re-
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1 serve and Strategic Petroleum Reserve Petroleum Ac2 counts for the year;

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

4 number of Federal and contractor employees;

5 ‘‘(9) the status of contracts for development, op6 eration, maintenance, distribution, and other activi7 ties related to the implementation of this part; and

8 ‘‘(10) any recommendations for supplemental

9 legislation or policy or operational changes the Sec10 retary considers necessary and appropriate to imple11 ment this part.’’;

12 (q) in section 166 (42 U.S.C. 6246) by striking

13 all after ‘‘appropriated’’ and inserting ‘‘the funds

14 necessary to implement this part.’’;

15 (r) in section 167 (42 U.S.C. 6247)—

16 (1) in subsection (b)—

17 (A) by inserting ‘‘for test sales of petro18 leum products from the Reserve,’’ after

19 ‘‘Strategic Petroleum Reserve,’’, and by in20 serting ‘‘for’’ before ‘‘the drawdown’’;

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

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

23 ‘‘after fiscal year 1982’’;

24 (s) in section 171 (42 U.S.C. 6249)—
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1 (1) by amending subparagraph (b)(2)(B) to

2 read as follows:

3 ‘‘(B) the Secretary notifies each House of

4 the Congress of the determination and identifies

5 in the notification the location, type, and

6 owernship of storage and related facilities pro7 posed to be included, or the volume, type, and

8 ownership of petroleum product proposed to be

9 stored, in the Reserve, and an estimate of the

10 proposed benefits.’’;

11 (t) in section 172 (42 U.S.C. 6249a), by striking

12 subsections (a) and (b);

13 (u) by striking section 173 (42 U.S.C. 6249b);

14 and

15 (v) in section 181 (42 U.S.C. 6251), by striking

16 ‘‘June 30, 1996’’ each time it appears and inserting

17 ‘‘September 30, 2001’’.

18 SEC. 4. Title II of the Energy Policy and Conservation

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

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

21 6264);

22 (b) by striking ‘‘section 252(l)(1)’’ in section

23 251(e)(1) (42 U.S.C. 6271(e)(1)) and inserting ‘‘sec24 tion 252(k)(1)’’;

25 (c) in section 252 (42 U.S.C. 6272)—
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1 (1) in subsections (a)(1) and (b), by strik2 ing ‘‘allocation and information provisions of

3 the international energy program’’ and inserting

4 ‘‘international emergency response provisions’’;

5 (2) in subsection (d)(3), by striking

6 ‘‘known’’ and inserting after ‘‘circumstances’’

7 ‘‘known at the time of approval’’;

8 (3) in subsection (e)(2) by striking ‘‘shall’’

9 and inserting ‘‘may’’;

10 (4) in subsection (f)(2) by inserting ‘‘vol11 untary agreement or’’ after ‘‘approved’’;

12 (5) by amending subsection (h) to read as

13 follows—

14 ‘‘(h) Section 708 of the Defense Production Act of 1950

15 shall not apply to any agreement or action undertaken for

16 the purpose of developing or carrying out—

17 ‘‘(1) the international energy program, or

18 ‘‘(2) any allocation, price control, or similar

19 program with respect to petroleum products under

20 this Act.’’;

21 (6) in subsection (i) by inserting ‘‘annually,

22 or’’ after ‘‘least’’ and by inserting ‘‘during an

23 international energy supply emergency’’ after

24 ‘‘months’’;
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1 (7) in subsection (k) by amending para2 graph (2) to read as follows—

3 ‘‘(2) The term ‘‘international emergency response

4 provisions’’ means—

5 ‘‘(A) the provisions of the international en6 ergy program which relate to international allo7 cation of petroleum products and to the informa8 tion system provided in the program, and

9 ‘‘(B) the emergency response measures

10 adopted by the Governing Board of the Inter11 national Energy Agency (including the July 11,

12 1984, decision by the Governing Board on

13 ‘‘Stocks and Supply Disruptions’’) for—

14 ‘‘(i) the coordinated drawdown of

15 stocks of petroleum products held or con16 trolled by governments; and

17 ‘‘(ii) complementary actions taken by

18 governments during an existing or impend19 ing international oil supply disruption’’;

20 and

21 (8) by amending subsection (l) to read as

22 follows—

23 ‘‘(l) The antitrust defense under subsection (f) shall not

24 extend to the international allocation of petroleum products

25 unless allocation is required by chapters III and IV of the
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1 international energy program during an international en2 ergy supply emergency.’’;

3 (d) by adding at the end of section 256(h),

4 ‘‘There are authorized to be appropriated $5,000,000

5 for each of the fiscal years 1996 through 1999.’’

6 (e) by striking Part C (42 U.S.C. 6281 through

7 6282); and

8 (f) in section 281 (42 U.S.C. 6285), be striking

9 ‘‘June 30, 1996’’ each time it appears and inserting

10 ‘‘September 30, 2001’’.

11 SEC. 5. (a) Title III of the Energy Policy and Con12 servation Act (42 U.S.C. 6291–6327, 6361–6374d) is

13 amended—

14 (1) in section 365(f) (42 U.S.C. 6325(f)) by

15 amending paragraph (1) to read as follows:

16 ‘‘(1) Except as provided in paragraph (2), for

17 the purpose of carrying out this part, there are au18 thorized to be appropriated $26,500,000 for fiscal

19 year 1996 and for fiscal years 1997 through 2001,

20 such sums as may be necessary.’’; and

21 (2) section 397 (42 U.S.C. 6371f) is amended to

22 read as follows: ‘‘For the purpose of carrying out this

23 part, there are authorized $29,000,000 to be appro24 priated for fiscal year 1996 and for fiscal years 1997

25 through 2001, such sums as may be necessary.’’.
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1 (b) in section 400BB(b) (42 U.S.C. 6374a(b)) by

2 amending paragraph (1) to read as follows:

3 ‘‘(1) There are authorized to be appropriated to

4 the Secretary for carrying out this section such sums

5 as may be necessary for fiscal years 1996 through

6 2001, to remain available until expended.’’

7 SEC. 6. Title V of the Energy Policy and Conservation

8 Act (42 U.S.C. 6381–6422) is amended—

9 (1) by striking section 507 (42 U.S.C. 6385),

10 and

11 (2) by striking section 522 (42 U.S.C. 6392).

12 SEC. 7. (a) Section 161 of the Energy Policy and Con13 servation Act (42 U.S.C. 6241) is amended by adding at

14 the end the following new subsection:

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

16 petroleum product during a drawdown of the Strategic Pe17 troleum Reserve:

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

19 having the opportunity to submit a competitive

20 bid, may—

21 ‘‘(i) submit a binding offer, and shall

22 on submission of the offer, be entitled to

23 purchase a category of petroleum product

24 specified in a notice of sale at a price equal

25 to the volumetrically weighted average of the
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1 successful bids made for the remaining

2 quantity of petroleum product within the

3 category that is the subject of the offering;

4 and

5 ‘‘(ii) submit one or more alternative of6 fers, for other categories of petroleum prod7 uct, that will be binding in the event that

8 no price competitive contract is awarded for

9 the category of petroleum product on which

10 a binding offer is submitted under clause

11 (i); and

12 ‘‘(B) at the request of the Governor of the

13 State of Hawaii, petroleum product purchased

14 by the State of Hawaii at a competitive sale or

15 through a binding offer shall have first pref16 erence in scheduling for lifting.

17 ‘‘(2)(A) In administering this subsection, and

18 with respect to each offering, the Secretary may im19 pose the limitation described in subparagraph (B) or

20 (C) that results in the purchase of the lesser quantity

21 of petroleum product.

22 ‘‘(B) The Secretary may limit the quantity of

23 petroleum product that the State of Hawaii may pur24 chase through a binding offer at any one offering to

25 one-twelfth of the total quantity of imports of petro-
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1 leum product brought into the State during the pre2 vious year (or other period determined by the Sec3 retary to be representative).

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

5 may be purchased through binding offers at any one

6 offering to 3 percent of the offering.

7 ‘‘(3) Notwithstanding any limitation imposed

8 under paragraph (2), in administering this sub9 section, and with respect to each offering, the Sec10 retary shall, at the request of the Governor of the

11 State of Hawaii, or an eligible entity certified under

12 paragraph (6), adjust the quantity to be sold to the

13 State of Hawaii as follows:

14 ‘‘(A) The Secretary shall adjust upward to

15 the next whole number increment of a full tanker

16 load if the quantity to be sold is—

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

18 ‘‘(ii) greater than or equal to 50 per19 cent of a full tanker load more than a whole

20 number increment of a full tanker load.

21 ‘‘(B) The Secretary shall adjust downward

22 to the next whole number increment of a full

23 tanker load if the quantity to be sold is less than

24 50 percent of a full tanker load more than a

25 whole number increment of a full tanker load.
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1 ‘‘(4) The State of Hawaii may enter into an ex2 change or a processing agreement that requires deliv3 ery to other locations, so long as petroleum product

4 of similar value or quantity is delivered to the State

5 of Hawaii.

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

7 the Secretary may require the State of Hawaii to

8 comply with the standard sales provisions applicable

9 to purchasers of petroleum product at competitive

10 sales.

11 ‘‘(6)(A) Notwithstanding the foregoing, and sub12 ject to subparagraphs (B) and (C), if the Governor of

13 the State of Hawaii certifies to the Secretary that the

14 State has entered into an agreement with an eligible

15 entity to effectuate the purposes of this Act, such eligi16 ble entity may act on behalf of the State of Hawaii

17 for purposes of this subsection.

18 ‘‘(B) The Governor of the State of Hawaii shall

19 not certify more than one eligible entity under this

20 paragraph for each notice of sale.

21 ‘‘(C) If the Secretary has notified the Governor

22 of the State of Hawaii that a company has been

23 barred from bidding (either prior to, or at the time

24 that a notice of sale is issued), the Governor shall not

25 certify such company under the paragraph.
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1 ‘‘(7) At the request of the governor of an insular

2 area, the Secretary shall, for a period not to exceed

3 180 days following a drawdown of the Strategic Pe4 troleum Reserve, assist the insular area in its efforts

5 to maintain adequate supplies of petroleum products

6 from traditional and non-traditional suppliers.

7 ‘‘(8) As used in this subsection—

8 ‘‘(A) the term ‘binding offer’ means a bid

9 submitted by the State of Hawaii for an assured

10 award of a specific quantity of petroleum prod11 uct, with a price to be calculated pursuant to

12 this Act, that obligates the offeror to take title to

13 the petroleum product without further negotia14 tion or recourse to withdraw the offer;

15 ‘‘(B) the term ‘category of petroleum prod16 uct’ means a master line item within a notice of

17 sale;

18 ‘‘(C) the term ‘eligible entity’ means an en19 tity that owns or controls a refinery that is lo20 cated within the State of Hawaii;

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

22 tanker of approximately 700,000 barrels of ca23 pacity, or such lesser tanker capacity as may be

24 designated by the State of Hawaii;
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1 ‘‘(E) the term ‘insular area’ means Guam,

2 American Samoa, the commonwealth of the

3 Northern Mariana Islands, the Virgin Islands,

4 Puerto Rico, and the freely associated states of

5 the Republic of Palau, Federated States of Mi6 cronesia, and Republic of the Marshall Islands;

7 ‘‘(F) the term ‘offering’ means a solicitation

8 for bids for a quantity or quantities of petroleum

9 product from the Strategic Petroleum Reserve as

10 specified in the notice of sale; and

11 ‘‘(G) the term ‘notice of sale’ means the doc12 ument that announces—

13 ‘‘(i) the sale of Strategic Petroleum Re14 serve products;

15 ‘‘(ii) the quantity, characteristics, and

16 location of the petroleum product being sold;

17 ‘‘(iii) the delivery period for the sale;

18 and

19 ‘‘(iv) the procedures for submitting of20 fers.’’.

21 (b) The amendment made by subsection (a) shall take

22 effect on the date that is 180 days after the date of enact23 ment of this Act or the date that final regulations are pro24 mulgated pursuant to section 3, whichever is sooner.
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1 (c) The Secretary shall promulgate such regulations as

2 are necessary to carry out the amendment made by sub3 section (a).

4 (d) Regulations issued to carry out this section, and

5 the amendment made by subsection (a), shall not be subject

6 to—

7 (1) section 523 of the Energy Policy and Con8 servation Act (42 U.S.C. 6393); or

9 (2) section 501 of the Department of Energy Or10 ganization Act (42 U.S.C. 7191).