II

104TH CONGRESS

2D SESSION S. 1605

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

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’’.

5 SEC. 2. Section 2 of the Energy Policy and Conserva6 tion Act (42 U.S.C. 6201) is amended—

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

8 ‘‘, subject to congressional review, to impose ration9 ing, to reduce demand for energy through the imple10 mentation of energy conservation plans, and’’; and
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1 (2) by striking paragraphs (3) and (6).

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

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

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

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

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

7 follows—

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

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

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

11 Continental Shelf by any person if more than one major

12 oil company, more than one affiliate of a major oil com13 pany, or a major oil company and any affiliate of a major

14 oil company, has or have a significant ownership interest

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

16 lease sale that this bidding would adversely affect competi17 tion or the receipt of fair market value’’; and

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

19 (c) by striking section 106 (42 U.S.C. 6214);

20 (d) in section 151 (42 U.S.C. 6231)—

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

22 and ‘‘short-term’’; and

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

24 follows:
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1 ‘‘(b) It is the policy of the United States to provide

2 for the creation of a Strategic Petroleum Reserve for the

3 storage of up to 1 billion barrels of petroleum products

4 to reduce the impact of disruptions in supplies of petro5 leum products or to carry out obligations of the United

6 States under the international energy program.’’;

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

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

9 and

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

11 Early Storage Reserve, and the Regional Petro12 leum Reserve’’, and by adding a period after In13 dustrial Petroleum Reserve.

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

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

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

17 follows:

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

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

20 created pursuant to this part.’’;

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

22 follows:

23 ‘‘(b) The Secretary, acting through the Strategic Pe24 troleum Reserve Office and in accordance with this part,
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1 shall exercise authority over the development, operation,

2 and maintenance of the Reserve’’; and

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

4 (e);

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

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

7 striking ‘‘To implement the Early Storage Reserve

8 Plan or the Strategic Petroleum Reserve Plan which

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

10 and inserting ‘‘The’’;

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

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

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

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

15 Maintenance of the Reserve’’;

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

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

18 (d), and (e);

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

20 follows:

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

22 Strategic Petroleum Reserve, the Secretary may—

23 ‘‘(1) issue rules, regulations, or orders;
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1 ‘‘(2) acquire by purchase, condemnation, or oth2 erwise, land or interests in land for the location of

3 storage and related facilities;

4 ‘‘(3) construct, purchase, lease, or otherwise ac5 quire storage and related facilities;

6 ‘‘(4) use, lease, maintain, sell, or otherwise dis7 pose of storage and related facilities acquired under

8 this part, under such terms and conditions as the

9 Secretary may deem necessary or appropriate;

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

11 160, by purchase, exchange, or otherwise, petroleum

12 products for storage in the Strategic Petroleum Re13 serve;

14 ‘‘(6) store petroleum products in storage facili15 ties owned and controlled by the United States or in

16 storage facilities owned by others if those facilities

17 are subject to audit by the United States;

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

19 operate, or maintain the Strategic Petroleum Re20 serve;

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

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

23 readily available inventories, petroleum products in

24 the Industrial Petroleum Reserve, under section 156;
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1 ‘‘(9) require the storage of petroleum products

2 in the Industrial Petroleum Reserve, under section

3 156, on terms that the Secretary specifies, in stor4 age facilities owned and controlled by the United

5 States or in storage facilities other than those owned

6 by the United States if those facilities are subject to

7 audit by the United States;

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

9 Petroleum Reserve;

10 ‘‘(11) 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 ‘‘(12) to the extent provided in an Appropria18 tions Act, and notwithstanding section 649(b) of the

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

20 7259(b)),the Secretary is authorized to store in

21 underutilized facilities, by lease or otherwise, petro22 leum product owned by a foreign government or its

23 representative, petroleum product stored under this

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

25 to part C of this title, and notwithstanding any pro-
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1 vision of this Act, may be exported from the United

2 States.’’;

3 (3) in subsection (g)—

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

5 inserting ‘‘development’’; and

6 (B) by striking ‘‘Plan’’;

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

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

9 follows:

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

11 750,000,000 barrel inventory can reasonably be expected

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

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

14 (6) by amending subsection (l) to read as fol15 lows:

16 ‘‘(l) During any period in which drawdown and dis17 tribution are being implemented, the Secretary may issue

18 rules, regulations, or orders to implement the drawdown

19 and distribution of the Strategic Petroleum Reserve in ac20 cordance with section 553 of title 5, United States Code,

21 without regard to rulemaking requirements in section 523

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

23 Organization Act (42 U.S.C. 7191);

24 (n) in section 160 (42 U.S.C. 6240)—
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1 (1) in subsection (a), by striking all before

2 the dash and inserting the following—

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

4 167(b)(2) and (3) and for the purposes of implementing

5 the Strategic Petroleum Reserve, the Secretary may ac6 quire, place in storage, transport, or exchange’’;

7 (2) in subsection (b), by striking ‘‘includ8 ing the Early Storage Reserve and the Regional

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

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

11 and (g);

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

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

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

15 as follows:

16 ‘‘(d)(1) No drawdown and distribution of the Strate17 gic Petroleum Reserve may be made unless the President

18 has found drawdown and distribution is required by a se19 vere energy supply interruption or by obligations of the

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

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

22 follows:

23 ‘‘(e)(1) The Secretary shall sell any petroleum prod24 uct withdrawn from the Strategic Petroleum Reserve at

25 public sale to the highest qualified bidder in the amounts,
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1 for the period, and after a notice of sale the Secretary

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

3 or local regulations controlling sales of petroleum prod4 ucts.

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

6 any offer to sell petroleum products as part of any

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

8 (4) in subsection (g)—

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

10 ‘‘Distribution Plan’’ and inserting ‘‘dis11 tribution procedures’’;

12 (B) by striking paragraphs (2) and

13 (6); and

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

15 ‘‘90’’ and inserting ‘‘95’’;

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

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

18 to read as follows—

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

20 President and the Congress on actions taken to implement

21 this part. This report shall include—

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

23 Reserve and the type and quantity of petroleum in

24 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
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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).

Æ